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Mattel Will Shut Last U.S. Manufacturing Site

Toys: Operations from plant in Kentucky will move to Mexico as the company reduces costs to increase profit.


Mattel Inc., maker of quintessentially American toys such as Barbie, said Tuesday that it will close its last U.S manufacturing facility and shift those operations to Mexico as part of continuing cost-cutting efforts.

Mattel's Murray, Ky., plant, which employs 980 manufacturing and distribution workers, will shut down in phases, starting in June and ending in late 2002, the company said. Mattel operates seven other distribution centers in the United States.

The closure comes as Mattel Chief Executive Robert Eckert works to increase Mattel's profitability by streamlining operations and cutting costs.

Eckert, who joined the company in May after the resignation of former leader Jill Barad, announced in September that he was reducing the company's cash dividend and cutting about 350 jobs at the company's various U.S. division headquarters.

Those moves were aimed at resuscitating the El Segundo-based toy maker, which lost as much as $7 billion in stock market value after Barad's acquisition of the poorly performing software maker Learning Co. The stock has rallied since setting a 52-week low of $9.75 a share Sept. 1, closing Tuesday at $17.65, off 25 cents on the New York Stock Exchange.

Mattel, similar to many other large toy manufacturers, has increasingly shifted toy fabrication over the years to locations in other countries. The company has been making toys in Mexico for more than 25 years and in Asia for more than 30 years, said Mattel spokeswoman Lisa Marie Bongiovanni. Mattel makes products in about 15 factories, with locations also in Indonesia, China, Malaysia and Thailand.

"It's a very difficult time for employees and a very difficult time for everyone at Mattel," Bongiovanni said. "This was not a decision we wanted to make."

Mattel inherited the Kentucky plant near Nashville in 1993 as part of its acquisition of Fisher-Price infant and preschool toys. The plant, which makes less than 10% of the company's preschool items, opened in 1973.

Employees of the plant were given the news at a facility-wide meeting Tuesday, a company spokeswoman said from Murray.

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