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Disney case highlights China supply chain pitfalls

Author: John Ruwitch, Reuters, Published on: 12 February 2008

Huang Renzhong...explained how creating Disney figurines during 15-hour work days in a grim factory led to a $90,000 lawsuit...Workers were threatened with the sack if they paused, even to help someone who'd fainted, Huang said. They...slept 12 to a dorm room, and were charged for room and board...Cases like Haowei -- and recent product safety scandals and toy recalls -- underscore challenges multinationals face as they struggle to control their supply chains in a country where law enforcement is spotty...A robust underground cottage industry, replete with consultancies and cheat-sheets, has emerged in China to help factories pass audits even if they don't comply...Add a layer of licensees between the brand and the manufacturers, like Disney and others, including Time Warner's Warner Bros and Viacom's Nickelodeon, and simply tracking who is making products in your name can be challenging.

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Related companies: Nickelodeon (part of Viacom) Time Warner Viacom Walt Disney Warner Bros. (part of Time Warner)