MIMCO MDC AUDIT REPORT

Sethi – Mattel Diecast China (MDC) - 1 MIMCO MATTEL INDEPENDENT MONITORING COUNCIL FOR GLOBAL MANUFACTURING PRINCIPLES AUDIT REPORT FOR MATTEL DIECAST CHINA Address: Yongan East Road Guanyao Nanhai Guangdong, China August 21, 2000 Copyright © 2000 by MIMCO MIMCO C/o Zicklin School of Business Baruch College - CUNY 17 Lexington Avenue New York, N.Y. 10010 E-mail: MIMCO@baruch.cuny.edu Revised: 3/21/01 Sethi – Mattel Diecast China (MDC) - 2 MATTEL DIECAST CHINA (MDC) Section 1- INTRODUCTION This report is based on the field inspection of the Mattel Diecast China (MDC) plant that was conducted by the MIMCO team on August 21, 2000. MDC is a manufacturing facility controlled and operated by Mattel. The plant is located at Yang Au Road East, Guan Yao, Nan Hai, Guangdong, China, which is 240 kilometers north of Hong Kong and 40 Kilometers from Guangzhou. The plant is currently owned by the China Joint Venture (CJV), which was incorporated in June 1998. Mattel supplies all the capital equipment, tooling, raw materials, components, technology, and technical and management support. The MDC plant produces die-cast toy cars of various sizes and types that are sold under the brand names of “Hot Wheels®” and “Matchbox Cars®”. MDC is quite different in its operation in that other Mattel plants in China are owned and managed by Mattel’s China partners where Mattel’s management and ...