Hasbro boss says manufacturers can learn more

Hasbro CEO Al Verrecchia says Chinese manufacturers need to develop closer relationships with suppliers.
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He says developing relationships with suppliers in China and taking the time to teach them how to meet stringent manufacturing and safety standards are among the keys for US companies operating there following a string of recalls.

"We've worked very, very hard over the years to teach the manufacturers how to make safe quality toys," he said during a panel discussion at the University of Rhode Island about doing business in China.

"For us the approach has been, you're not abiding by the code, this is what you have to improve, we're going to show you how to improve that," he said.

Verrecchia said after the talk that it was critical for American companies to work closely with their vendors in China.

"They have to learn things. They have to learn how to test product and why they have to meet certain safety standards. You have to build that into the culture," he added. "Once you do that and set up the inspection and safety procedures, you can control the environment."

Verrecchia said he anticipates that Hasbro's presence in Chinese markets will continue to grow, especially as more Western retailers, such as Wal-Mart Stores, Tesco and the French retail chain Carrefour open stores there.

"As they begin to expand in China, so too will we expand in China," he said.

He also said Hasbro faces some challenges in China, including the rising value of the Chinese yuan, the rise in labor and energy costs, and the challenge to secure reliable energy.

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