Personnel Profile: Carter Keithley

Carter Keithley is president of the toy industry association headquartered in New York City. He was in town recently for a conference and talked to us about the importance of the toy industry in the Golden State.

Tell me about the toy industry.
Originally, it was a European-based industry in Germany. With World War I, the center of gravity of the industry moved to New York City. We had two big buildings there that were nothing but toy showrooms. The Toy Fair would last for three weeks. There’s quite a bit of it in Hong Kong now, quite a bit of it back in Germany. The Toy Fair in New York is still the biggest and most important Toy Fair in the Western Hemisphere. But increasingly, also, there’s been a migration of the toy industry out to California, to the extent that now California has more toy industry members than any other state. We have 20 percent of our membership here.

The toys are actually made here?
Not many of them. They’re designed here. The conceptualization, the specification, the testing, the whole developmental process occurs here. It’s typically sourced in China, or Thailand. I’m a big believer in the free market system. Our industry has become very good at finding low cost ways of doing things. To the extent a toy can be the result of a plastic molding process or something like that, that can be brought back here to the United States because that’s so automated. A lot of toys look simple, but there’s a lot of handwork. A Barbie doll for example, has an extraordinary number of colors and highly skilled kinds of facial panting and hair setting and costuming – all very detailed. We need a low-cost labor situation. I’m proud to say that our industry, about six years ago, started a very well-developed process to assure that workers in China are treated fairly. It’s an imperfect system right now, but we are well ahead of, I think, every other industry in terms of assuring that there’s not too many working hours, that overtime is paid for, that there are definitely no underage workers and that conditions are good. We have two companies participating right now that do produce their toys in California.

Is there a Silicon Valley of toy design in California?
Not really. We have a northern contingency and a southern contingency. About a dozen years ago there was formed something called the Toy Association of Southern California. We’re in the process of forming a new Toy Association of Northern California. Spider-Man, Transformers, those movie properties and TV properties – they all originate here in California. California is the center of gravity for the entertainment industry.

One of the things that is increasingly driving toy sales in the United States, is the entertainment property-related toys. Toy sales have historically been driven by creativity and innovation for decades. Five or six years ago, the toy industry went through a period of crisis, a crisis of self-confidence, anxiety about the Kids Getting Older Younger Phenomenon – KGOY. The industry found kids migrating away from the use of traditional toys to using their older siblings’ electronic games.

Then the industry figured out ways to employ new technology in traditional toys, in ways that made those toys more interactive. Sales are back. The toy industry has long been known as a technology-trailing industry. The average price point of our toys is eight dollars. When you’re a young parent you don’t have a lot of money – so toys have to be affordable. To keep them affordable, we can’t afford to create new technology to employ in toys. So what we have to do is wait for new technology to become ubiquitous and inexpensive and then we re-purpose that in creative new ways.

What does the industry want in Sacramento?
A primary concern right now is the green chemistry initiatives, which we are concerned could come out in a way that would impose unwarranted new restrictions in the use of materials in toys. BPA is under examination. We don’t use a lot of BPA in toys, but BPA is used to make clear, plastic material, hard enough to withstand breakage potential. If BPA can no longer be used, either that stuff would become breakable and represent a genuine hazard to children or we won’t have any clear plastic being used in toys at all. Look at things like the push-lawn mower with the pop-up balls on top. That had a clear plastic top to it. You don’t have to worry about kids eating that or licking it. Even if they did lick it, I don’t think there’s any chance that BPA could be leeched out of it. We have extremely stringent toy safety standards. There’s a blanket prohibition on using any toxic chemicals in toys. It used to be a voluntary standard, the ASTMF963 Toy Safety Standard. It’s now a matter of federal law. We think adopting a separate set of chemical regulations that would be imposed on toys unnecessarily is a matter of grave concern.

There’s another one and that’s the producer responsibility approach, the toy ‘take-back’ potential law. It’s one thing to be concerned about a flat screen television or computer that contains significant portions of toxic materials and heavy metals and that sort of thing. I’m relatively conscientious about sending that old computer back to be recycled. There are hundreds of millions of computers and cell phones that get thrown away every day that have a lot of this stuff in them.

If toys have computer chips in them, then they have toxic materials. Why should toys be excluded?
We don’t think they necessarily should be excluded from it, but we think that the law should be structured in such a way that if you’re a toy manufacturer, there’s not a penalty imposed on you if a certain percentage of your toy doesn’t come back to be recycled. Those toys can go into the toy box and stay in there for years. There’s no way for us to get it back.