The New York Times took a look at some European toy makers who decided to let the Chinese Poison Train pass them by. Why didn’t they outsource their manufacturing to China?
“Looking back, it feels like it was right to make that decision,” said Andrea Schauer, managing director of Geobra Brandstätter, which makes Playmobil toys. “At the level of quality we need,” she said, “we didn’t have enough manpower to inspect factories in China.”
Ms. Schauer said Playmobil, a family-owned company in Zirndorf, Germany, faced intense pressure to move production to China. Most of the industry was moving there, she said, and German banks did not want to lend money to companies to build toy factories at home.
What the companies discovered, though, was while China’s unit labor costs were a fraction of those in the West — the equivalent of $1.50 an hour compared with $30 an hour in western Germany — the distance between China and the companies’ biggest markets eroded some of that cost advantage.
“You cannot blindly believe in German manufacturing. But when you are so close to the factory, you can jump in your car and be there in 20 minutes.”
“We looked at various options,” said Iqbal Padda, executive vice president in charge of the global supply chain at Lego, noting that at the start, it was widely accepted “that it has to be China.”
Ultimately, China was just too far away for Lego.
“Toys are not the fashion business, but they are like the fashion business,” Mr. Padda said. “The need to be able to react to what is going on in the market made us choose [Europe]”.
Will it matter to consumers? Maybe. Maybe not. Either way, Playmobil says they are too concerned with quality to ship production across the globe:
“Outstanding quality can only be reached when production is carried out under one’s own eyes, by people who have developed brand awareness over a long time, and learned to produce the highest quality,” said Playmobil’s founder, Horst Brandstätter.