There's no sign of an economic slowdown at Larry Mestyanek's toy factory in Compton.
Whirring machines cut letters from the alphabet out of red, blue and yellow slabs of wood, making long rows of the letter E. Across the room, men with air filter masks sand toddler's chairs that are lined up in rows as if expecting a convention of miniature leaders. The machines are so loud it's hard to hear the rows of tiny wooden music boxes playing a disjointed lullaby.
But the bustle of activity belies what Mestyanek says is a real concern for his company, TAG Toys. A new federal regulation that took effect this week requires him to have all his products tested for lead paint by an outside firm, and Mestyanek says that could wipe out his small profit, forcing him to raise prices.
"I like the idea of safety, but this is just overreacting," said Mestyanek, who employs 45 people. The tests for each of his 175 toys run about $2,000, he said. That's a $350,000 hit to his bottom line, or close to what he makes in annual profit.
The testing is required under the Consumer Product Safety Improvement Act, which was passed in response to last year's massive recalls of toys containing lead and other dangerous substances.
Manufacturers must now test for lead paint, and by Feb. 10 they must test for lead and certain chemicals anywhere in products made for children 12 and under.
Supporters, including Rep. Bobby L. Rush (D-Ill.), say the bill will help restore consumers' confidence in the toys they buy and prevent children from suffering lead poisoning. But many small domestic toy and clothing makers say the law could jeopardize their ability to stay in business.
A German company, Selecta, recently told retailers that it was pulling out of the U.S. market after evaluating the costs of complying with the law. Thousands of others are waiting, holding their breath and hoping for amendments, said Julia Chen, a spokeswoman for the Handmade Toy Alliance, a trade group seeking changes in the rules.
"If they don't change the law, we'd have to close our doors," said Nick Christensen, owner of Little Sapling Toys in Eureka, Calif. "We won't be able to afford the testing."
His wooden rattles and building blocks, which retail for $20 to $40, would cost at least $1,500 per model to test, he said. Because he makes 20 models, his testing bill would be at least $30,000.
