"Thomas & Friends" Goes to China: Stumbles And Is Recalled

National Labor Committee 75 Varick Street, Suite 1500 New York, NY 10013 Tel: 212.242.3002 Fax: 212.242.3821 nlc@nlcnet.org www.nlcnet.org Research:

Charles Kernaghan, Jonathann Giammarco, Barbara Briggs, Alexandra Hallock

Design:

Tomas Donoso

Printing:

AFSCME DC 1707 - Labor Donated

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Thomas & Friends Goes to China Stumbles

Thomas & Friends Goes to China

Thomas & Friends Goes to China Stumbles SUMMARY

By Charles Kernaghan I. Hansheng Wood Products Factory - Sweatshop Maker of Thomas & Friends Wooden Toy Trains § Following the massive June recall of Thomas & Friends wooden toy trains due to dangerous levels of lead paint, 1,000 workers—three quarters of the entire workforce—were laid off as of September. On October 19, the factory is to be shut down. § Workers cheated right up to the very end, being paid far less than half of the severance pay legally due them. § It is unclear whether any of Hansheng’s workers who handled lead paint have been provided medical exams—as is required by law—to see if they are suffering any affects of lead poisoning. § While Thomas & Friends toys were being produced in the factory, the workers were routinely required to toil 14 ½ to 15, and sometimes 16-hour shifts, from 8:00 a.m. to 10:30 or 11:00 p.m. and even to midnight, six or seven days a week. During peak periods, workers would go for months without a single day off. § Workers routinely at the factory 87 to 102 hours a week, while working a minimum of 69 hours, to over 80 hours a week. Workers forced to toil 29 to 41 hours of overtime a week,

which exceeds China’s legal limit—of no more than 36 hours of overtime a month—by 250 to 389 percent! § A base wage of 53 cents an hour. Workers typically shortchanged of $38.35 in overtime pay legally due them each month—16 percent of what they are owed. This represents an enormous loss to the workers, as the weekly base wage is just $21.06. § Workers docked 2 ½ hours’ wages for speaking during working hours or for arriving even five minutes late. § In blatant violation of China’s laws, Hansheng workers were not inscribed in the mandatory national Social Security program, without which the workers are denied access to health care. § Workers are housed in primitive dorms, with 12 workers crowded into each room sleeping in double-level bunk beds. § Thomas & Friends/RC2 owes these workers their full severance pay along with compensation for having been cheated of their right to health care for a year or more. Workers are also owed back wages. § Workers have heard that the factory will relocate to the city of Shaoguan, where it will no doubt change its name to climb out from under the cloud of having made toxic toys.

II. Li Cheng Industrial Complex in Dongguan—houses RC2 Corporate Headquarters in China, along with three factories—Peng Hui, Yong Yi and Ri Sheng—which produce sweatshop toys for RC2 under licensing agreements with Thomas & Friends, Disney, Bob the Builder, Nintendo, Nascar and others.

There are 7,000 workers in total. § At the Yong Yi Toy factory, RC2 workers are forced to toil an all-night, 21-to-23-hour shift every Saturday, from 8:00 a.m. to 5:00 or 7:00 a.m. the following Sunday morning.

Working such an all-night shift is the only way workers are allowed Sunday “off.”

Workers can be at the factory 98 hours a week, toiling 46 hours of overtime, which exceeds China’s legal limit by 453 percent!

Workers are allowed less than five minutes to assemble each toy, for which they are paid just four cents. § At the Ri Sheng Toy factory, RC2 workers are routinely cheated of their overtime pay, receiving just 52 cents per hour, while by law all weekday overtime must be paid at 80 cents an hour and weekend overtime at $1.06 per hour. Workers are being cheated of $11.11 a week, or 42 percent, of the overtime wages legally due them.

§ The Peng Hui Plastics and Metal factory, which is the largest and busiest of the three factories producing RC2 sweatshop toys, hires all temps all the time. The mostly-youngwomen workers are allowed just three-month temporary contracts, which management, at its discretion, can renew every three months— but always as a “new” contract. Workers can be at the factory full time for a year or more, but always remain temporary workers with no legal rights. As temps, the workers are stripped of their legal right to health care, sick days, maternity leave, holidays, annual vacations, severance pay and so on. Such a scam has illegally reduced Thomas & Friends toy workers to a contingency workforce with no rights.

Workers can be fined for being “inattentive” at work. Anyone arriving 30 minutes late will be docked half a day’s wages as punishment.

Missing a day will result in the loss of two days’ wages. Workers can be fired for having a “bad attitude.”

In May 2007, the young women were forced to work seven days a week—without a single day off in the month—toiling 84 hours a week, including 44 hours of overtime, which exceeds China’s legal limit by 430 percent! Since the massive recall of Thomas & Friends toys, workers are no longer required to toil seven days a week.

The current typical shift is 14 to 15 hours a day, from 8:00 a.m. to 10:00 or 11:00 p.m., six days a week. This puts the workers at the factory 87 hours a week, while actually toiling 69 hours, or 11 ½ hours a day. This means the workers are routinely required to work 29 hours of overtime each week, and 126 overtime hours

Thomas & Friends Goes to China

each month, exceeding China’s legal limit of 36 overtime hours a month by 249 percent.

The workers are paid a base wage of 53 cents an hour and are routinely shortchanged of $14.67—or eight percent—of the overtime wages legally due them each week.

Everyone is drenched in their own sweat, as the factory is unbearably hot, made worse by the sheet metal roof which draws and holds the heat.

Illegally, Peng Hui’s workers are not inscribed in China’s mandatory national Social Security program, which strips them of their right to health insurance.

Eight workers are crowded into each dorm room, sleeping in double-level metal bunk beds which line the walls. Eleven to 14 workers must share a shower stall, cueing up each night to wait their turn to bathe.

§ Once Thomas The Tank Engine play tents made in China enter the United States, the retail price is marked up $24.08—234 percent—above the total cost of production of just $10.32. Thomas the Tank play tents made in China for PlayHuts Inc. of California entered the U.S. on October 8, 2006 through the Port of Los Angeles. Shipping documents show the 5,280 Thomas the Tank play tents entering the U.S. with a landed Customs value—total cost of production—of $54,486, or just $10.32 each. The suggested U.S. retail price of $34.50 represents mark-up of $24.08—243 percent—over the total cost of production.

Such enormous mark-ups by the toy companies demonstrate once again that unsafe toys made under abusive sweatshop conditions do not have to be the norm. It does not have to be this way.

The toy workers have no way to raise serious grievances, as there are no unions in any of the three plants in the RC2 Industrial Complex. If a worker wants to raise a complaint, they can only speak with the supervisor, if the supervisor will even stop to listen. Very little results from such appeals.

The RC2 Corporation hides its sweatshop production in China, refusing to disclose even the names and locations of their contractors’ plants.

Thomas & Friends Goes to China

After “Thomas & Friends” Massive Toy Recall Workers in China Suffer Even More Fifteen hundred workers laid off Cheated to the end: shortchanged of their severance pay.

Hansheng Wood Products Factory Wusha Village, Chang‘An Town Dongguan City, Guangdong Province China Production: Primarily wooden toys for export to the United States.

Following the recall, Hansheng workers continue to make small trains. The workers have no idea whether or not they are using the same lead paint as in the past. [Note: According to workers from the Yong Yi plant in the Li Cheng Hang Industrial Zone in Dongguan, where the RC2 company has its corporate headquarters in China, their plant routinely outsourced a great deal of work to the Hansheng Wood Products factory, often amounting to four full shipping containers a day. –The Li Cheng report follows this one on Hansheng.]

Number of Workers: Approximately 1,500 workers prior to this summer’s massive Thomas & Friends toy recall. Immediately following the recall and related international publicity, about half the workers were laid off, and the number continues to fall, with just 500 workers remaining as of September. On October 19, the factory will be shut down.

“Thomas & Friends” Sinks to the Level of Cheap Sweatshop Abuse It is sad to see just how far “Thomas & Friends” has fallen, from the inspiration of a Presbyterian Minister in England back in the 1940s, who set out to create stories to amuse his sick child which were at once interesting, sweet, creative and sheer fun. Today, the RC2 Corporation has turned the Thomas & Friends toy line into just another sweatshop commodity, based on the abuse and exploitation of poor workers in China. § Mass layoffs: To date, 1,000 workers, threequarters of the entire workforce have been laid off since the recall at the Hansheng Toy factory, the vast majority without receiving their full severance pay as mandated by law.

Harsh treatment and threats are being used by management to force the remaining workers to leave the factory without receiving their benefits. § Management has now announced that the factory will be shut down for good on October 19 and the remaining workers will be let go.

According to rumors reaching the workers, the Hansheng factory will relocate to the city of Shaoguan, where no doubt the factory will change its name to climb out from under the cloud of having produced toxic toys.

§ Workers are docked 1 ¼ to 2 ½ hours’ wages for speaking during working hours—or for failing to turn off their cell phones when they enter the factory. Workers arriving even five minutes late are also docked 2 ½ hours’ wages as punishment. § Forced and excessive overtime: Workers are at the factory anywhere from 87 to 102 hours a week, required to work a 14 ½ to 15-hour shift, from 8:00 a.m. to 10:30 or 11:00 p.m., and sometimes to midnight, six or seven days a week. Workers are forced to work anywhere from 29 to 41 hours of overtime a week, which exceeds China’s legal limit on allowable overtime by 250 to 389 percent! § Workers are cheated of $38.35 each month— 16 percent of the wages legally due them— which is an enormous amount of money for these poor workers, whose base wage is just $21.06 a week. Even with the massive amounts of mandatory overtime, the workers’ average take-home wage is just 58 cents an hour. § The factory does not provide the mandatory Social Security health, work injury and pension insurance to its workers—another gross violation of China’s labor laws. § Workers do not even have a legal employment contract as demanded by law. § Twelve workers crowd into each small dorm room, sleeping on double-level metal bunk beds that line the walls. § Management is apparently spreading rumors that the factory will soon close and relocate, hoping to frighten even more workers into quitting without their benefits.

§ Many workers were frightened to speak about factory conditions, since following the recall the factory has been in a sort of lock-down to prevent “outsiders” from asking questions.

Thomas & Friends Goes to China

Hours: Forced and Excessive Overtime The routine shift at the Hansheng Toy factory is 14 ½ to 15 hours a day, six and seven days a week, from 8:00 a.m. to 11:00 p.m., and sometimes to midnight. Whether or not the workers must toil on Sunday is determined strictly by production needs. If the factory is busy, they work. Though there are no separate peak and slow seasons at Hansheng, workers report that the factory is typically very busy for up to three-quarters of the year. During these busy periods, it is common for the workers to toil seven days a week, going for months at a time without a day off. There are three, slightly staggered shifts at the factory—to avoid massive cues as the workers punch their timecards—but they mirror the same hours and breaks as described below.

The workers are at the factory 14 ½ to 15, and sometimes 16, hours a day, while actually toiling 11 ½ to 12 hours and on occasions 13 hours.

At a minimum, the workers report being at the factory six days and 87 hours a week, while actually working 69 hours.

The workers report working 300 to 320 hours a month, at the low end, and in excess of 350 hours a month during busy periods. This means that at the low end, the workers are toiling 69 hours a week, while 74 hours is more common, though 81-hourplus workweeks are required during the long peak season. In other words, the workers are regularly forced to toil an enormous amount of overtime each week, from 29 to 34, up to more than 41 hours of overtime each week, which exceeds China’s legal limit on allowable overtime by 250 to 389 percent! When the workers were forced to put in a 74-hour week, they would be at the factory 15 ½ hours a day, from 8:00 a.m. to 11:30 p.m., six days a week. For the 81-hour-plus workweeks, the toy workers would be at the factory 102 hours, from 8:00 a.m. to 10:30 p.m., seven days a week. So it is clear that there are very serious mandatory overtime violations at the Hansheng Toy factory.

Routine Daily Shift (14 ½ to 15 hours a day, or more) 8:00 a.m. – 12:00 p.m.

(Work, 4 hours)

12:00 p.m. – 2:00 p.m.

(Lunch, 2 hours)

2:00 p.m. – 6:00 p.m.

(Work, 4 hours)

6:00 p.m. – 7:00 p.m.

(Supper, 1 hour)

7:00 p.m. – 10:30 p.m., 11:00 p.m. or 12:00 a.m.

(Overtime, 3 ½ to 5 hours)

Wages: Workers shortchanged of 16 percent of the wages legally due them The minimum wage in Dongguan is 690 RMB ($91.51) per month, or just 53 cents an hour.

Legal Minimum Wage in Dongguan, China 53 cents an hour $4.21 a day (8 hours) $21.06 a week (40 hours) $91.51 a month $1,098.14 a year All weekday overtime must be paid at a 50 percent premium, or 80 cents an hour, while overtime on the weekend must be compensated as double time, or $1.06 per hour.

The Hansheng factory pays a little above the minimum wages, as workers report earning 4.5 to 5 RMB (60 to 66 cents) per hour, for an average wage of 63 cents. For the regular 40-hour workweek, the workers earn $25.20. However, there is something seriously wrong with the way Hansheng management calculated overtime pay, which leads to the workers being cheated of some 16 percent of the wages due them each day.

For example, one young man worked 320 hours in a single month—74 hours a week, including 34 hours of mandatory overtime. He should have earned $55.37 a week and $239.94 a month, but instead he was paid just $201.59 for the month, $46.52 for the week. This means he was being shortchanged of $38.35 in wages legally due him each month, or 16 percent of what he was owed.

While this might not seem like a huge amount of money to us, to these poor workers, it equals the loss of nearly two weeks’ base wages, which, as discussed above, come to about $21.06 a week.

The workers should have earned $25.20 for the regular 40-hour workweek, $17.14 for the 21.43 hours of weekday overtime to be paid at a premium of 80 cents an hour, and $13.03 for the 12.3 hours of weekend overtime, which must be paid at a 100 percent premium, or $1.06 an hour.

The workers are housed in an over-crowded company dorm, with 12 workers squeezed into each room sleeping on double-level bunk beds. For dorm fees, the company deducts 25 RMB ($3.32) a month from the workers’ wages. The factory canteen provides the workers with two meals a day—lunch and dinner—which the workers say is mediocre at best. Three types of entrees are simply dumped on the workers’ trays along with a bowl of soup. For this, the factory deducts 95 RMB ($12.60) a month from the workers’ wages. This lowers the workers’ take-home wage to $42.85 for a grueling 74-hour workweek (including 34 hours of forced overtime), which averages out to just 58 cents an hour.

The factory, also illegally, charges the workers 50 RMB ($6.63) when they enter the factory to pay for their work uniforms. Though the 50 RMB is supposed to be returned when the workers leave the factory, it is illegal under China’s labor laws to take deposits from workers.

Thomas & Friends Goes to China

All the workers say that conditions in the Hansheng factory are now even harsher than they were in the past, as management increases the threats and arbitrary fines, hoping the workers will quit and leave the factory without demanding their legal severance pay and dismissal compensation.

Workers have also heard through the media that many of the toys they worked on at Hansheng were “poisonous,” which has further frightened the workers into quitting.

It is unclear if Hansheng management provided any medical examinations to its former or current workers—which is required by law—to see if any of them were suffering from lead poisoning.

What Thomas & Friends and RC2 Owe These Workers 1.) Everyone must be paid their full severance according to Chinese law, which is very clear on how severance must be calculated. Every worker employed at the Hansheng factory for one year or less is due one month’s wages as their severance, based on the average wage—including all overtime, bonuses or other stipends—over the last 12 months. In violation of the law, management is cheating its workers right up to the end, by paying a severance of just 690 RMB ($91.51), which is the base minimum wage. Given the routine and excessive mandatory overtime at Hansheng, the workers are owed at least 1,809 RMB ($239.94) as severance and not the 690 RMB ($91.51) management is paying. The workers are being cheated of at least $148.41 in severance pay legally due them, money which should be returned to the workers immediately.

2.) For at least the last year, management has also cheated the workers of their legal right to health insurance by illegally failing to inscribe its workers in the mandatory national Social Security program, which also covers work injuries, unemployment insurance and a small pension.

To compensate for being cheated of their health insurance, each workers should receive at least a second month of severance pay. This is the least the U.S. companies should do.

3.) Any workers suffering from work injuries must also be provided their full medical compensation, including a living stipend during the period of their recovery.

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Hansheng workers have suffered enough and need to be made whole again.

Thomas & Friends Goes to China

Thomas & Friends Goes to China Stumbles Li Cheng Industrial Complex Chuan Di Village, Jie Kou Regulatory District Chang ‘An Township, Dongguan City Guangdong Province, China Phone: 86-(0)-769-3456145 In 1989, the RC2 Corporation—the maker of Thomas & Friends toys—set up its China headquarters, displaying its corporate logo on its office building in the Li Cheng Industrial Complex, which also houses three toy factories—Peng Hui, Yong Yi and Ri Sheng. All three factories produce plastic and metal toys, apparently with RC2 accounting for the vast majority, if not all the production. There are approximately 7,000 workers in total in the industrial complex.

Even the New York Times, which visited the complex in June 2007, found it confusing as to who owns and controls what, as the three factories appear to have different owners from China and Hong Kong. It is unclear who operates and oversees the factories—the RC2 Corporation or the different owners. (New York Times, June 19, 2007)

In June 2007, 1.5 million Thomas & Friends trains and rail components—22 models in all, including “James Engine” and the “Fire Brigade Truck”— were recalled due to dangerous levels of lead paint on the toys. The massive recall amounted to approximately four percent of all the Thomas & Friends toys sold over the last two years by the RC2 Corporation.

For RC2, the less the American people know about their operations in China, the more convenient it is for the company, which accounts for all the secrecy. The RC2 Corporation will not even release the names and addresses of its suppliers’ plants in China, perhaps for fear that independent human rights organizations or the media might pay a visit to these plants.

In addition to Thomas & Friends, RC2 has licensing agreements with Disney, Bob the Builder, Nintendo and Nascar among others.

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Peng Hui Plastics and Metal Factory: The Peng Hui factory receives the largest number of orders and frequently passes work on to the other two factories in the zone. According to the workers, during the busy season, the Peng Hui factory also subcontracts work to outside plants, some of which pay below the legal minimum wage.

One such plant the workers knew about was paying just 2.8 RMB (37 cents) an hour, which is below the legal minimum wage of 53 cents an hour— which itself is already well below subsistence levels.

One would imagine that the RC2 Corporation would have to be aware of these subcontracts.

Like the other toy factories in RC2’s industrial complex, Peng Hui hires mostly young women, 18 to 35 years of age. Male workers are only hired if they have the requisite skills and can prove they worked in similar positions in the past.

All Temps All the Time: Thomas & Friends toy workers illegally reduced to a contingency workforce with zero rights At the Peng Hui plant, the norm is to offer prospective employees just a three-month temporary contract which management, at its discretion, can then renew every three months— but always as a “new” contract. Workers can be at the factory full time for a year or more, but always remain temporary workers with no legal rights. With temps it is not only much easier to fire workers at will, without their severance, for being “inattentive” at work, but in addition the factory does not have to provide legal benefits to their temps that full time employees enjoy. It is a conscious scam to cheat the workers that is going on in broad daylight, and one that the RC2 Corporation must be aware of, and condone.

As temps, the workers are stripped of their right

RC2 and Big Brother are Watching Excerpts from Peng Hui Factory’s Temporary Contract “Rest days are arranged by the factory. Failure to show up at work without permission will be considered absence from work. Missing one day of work will result in the loss of two days’ wages. Missing work three times a month, or for three consecutive days, will be considered voluntary quitting.”

“Workers shall obey the management’s arrangement/rules upon entering the factory. Otherwise, it will be considered an absence from work.”

“Workers’ injuries will be dealt with depending on the circumstances. The factory has no responsibility for non-work injuries and non-work-related accidents.”

“In the following cases, the factory is entitled the right to dismiss the worker: the worker commits a serious violation of factory rules, affects production and work orders, the worker violates operations procedures..., the worker carries a bad attitude and harms the factory’s interest, ...serious disturbance of social order and other serious mistakes.”

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Thomas & Friends Goes to China

to be inscribed in the mandatory national Social Security system, which covers work injuries, health care, unemployment compensation and a small pension. Nor does management have to pay sick days, maternity leave, holidays or annual vacations, unless they choose to be magnanimous and do so even though their “temps” do not technically have the right to benefits. A temp system like this leaves the workers extremely vulnerable, with no voice and no rights. Trapped in this position, toy workers are turned into a cheap and expendable commodity to be exploited at will.

The temporary employment contract the workers sign is mostly about the penalties a worker will suffer for inattention at work or violation of factory rules. For example, if a worker arrives 30 minutes late, she will be docked half a day’s wages as punishment. Anyone missing a day will be docked two days’ wages. A worker who misses three days in a month will be considered to have “voluntarily” quit. Workers violating factory rules can also be fired.

The peak season at the Peng Hui plant lasts at least six months, from May through October.

Hours: Forced Overtime, Workers Routinely at the Factory 87 Hours a Week During the long peak season, the routine daily shift is from 8:00 a.m. to 10:00 or 11:00 p.m., 14 to 15 hours a day, six and sometimes seven days a week.

If production deadlines demand it, the workers are forced to work on Sunday. All overtime is strictly mandatory. If for whatever reason a woman cannot stay for an overtime shift, she will be marked absent for the entire day and apparently docked the full day’s wages.

Daily Shift (14 to 15 hours a day) 8:00 a.m – 12:00 p.m. (Work, 4 hours) 12:00 p.m. – 2:00 p.m. (Lunch, 2 hours) 2:00 p.m. – 6:00 p.m. (Work, 4 hours) 6:00 p.m. – 7:00 p.m. (Dinner, 1 hour) 7:00 p.m. – 10:00 or 11:00 p.m.

(Overtime, 3 to 4 hours) The norm is to work three or four hours of overtime each day during the peak season. On average then, the mostly-young women workers are at the factory 14 ½ hours a day, from 8:00 a.m. to 10:30 p.m., six days a week, while actually toiling 69 hours—11 ½ hours a day. This means the workers are routinely required to work 29 hours of overtime each week, and 126 overtime hours each month, exceeding China’s legal limit of 36 overtime hours a month by 249 percent!

In the recent past, it was even worse. At the start of the busy season in May 2007, the workers were required to work seven days a week without a single Sunday off, working 12 hours a day—four hours of overtime on top of the regular eight-hour shift.

In this case, the workers were toiling 84 hours a week, including 44 hours of mandatory overtime, which exceeds China’s legal limit by 430 percent!

Perhaps because of all the attention focused on these factories following the massive Thomas & Friends toy recalls—workers now report they are no longer required to work seven days a week.

Even if workers had a choice whether or not to work overtime—which is supposedly the law—they could not really exercise that right, since they are completely dependent upon overtime to survive.

The base wage of just 53 cents an hour and $21.04 a week is not enough to live on.

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Unbearable Heat: What makes the long hours even worse is the unbearable heat on the shop floor. Many of the workshops are built with sheet metal roofs which absorb and hold the heat. There is no air conditioning on the shop floor, and the large fans just circulate hot air. Everyone is soaked in their own sweat.

No one to complain to: Of course, there are no unions in any of the three plants in the RC2 Industrial Complex. If the workers want to raise a complaint, they can only speak with a supervisor, if the supervisor will even stop to listen. Not much comes out of such appeals.

Wages: Base Wage of just 53 Cents an hour; Workers shortchanged of 8 percent of their wages The base wage in the factory is 690 RMB ($91.51) a month, which amounts to 53 cents an hour and $21.04 a week.

Minimum Wage in Dongguan (690 RMB per Month) 53 cents an hour $4.20 a day (8 hours) $21.04 a week (40 hours) $91.51 a month $1,098.14 a year Weekday overtime must be paid at a 50 percent premium,or 80 cents an hour, while weekend overtime must be compensated as double time, or $1.06 an hour.

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Pay at the Peng Hui factory is calculated using a combination of the hourly and piece rate wages.

In the assembly department, workers report taking home approximately 1,200 RMB ($159.15) a month, for working a 66-hour week. In this case, the workers were at the factory 14 hours a day, from 8:00 a.m. to 10:00 p.m., while working 11 hours, six days a week. This includes 26 hours of overtime each week and 112.6 hours of overtime each month, which exceeds the legal limit by 213 percent. These assembly line workers should have earned at least $44.70 a week and $193.70 a month instead of the $179.05 a month they were paid, before the factory deducted 150 RMB ($19.89) for the workers’ dorm and meal fees. For the 40-hour regular week, the workers must be paid at least $21.04. The fifteen hours of weekday overtime paid at a premium of 80 cents an hour would add another $12.00, while eleven hours of overtime on Saturday at $1.06 an hour adds another $11.66 for the $44.70 total per week and $193.70 a month. The workers are being shortchanged of $14.67 in wages due them each month, or about eight percent of what they are legally owed.

While this might not seem like much, it amounts to the loss of 3 ½ days’ wages each month, the equivalent of 28 hours that the workers are forced to work for free.

In the spray paint department, where apparently lead paint had been used on some toys—the workers are paid mostly by a piece rate and earn a little bit more. But to do so, the workers have to move as fast as they can to complete their production goal. Workers can earn $55.09 a week and $238.73 a month, before the $19.89 deduction for food and dorm fees. Currently workers in the spray paint department are working through half their meal breaks in order to reach their mandatory

Thomas & Friends Goes to China

goals. Those workers handling oil paint do receive a change of face masks every day.

It is the same furious pace on the assembly line, where each worker must complete 2,000 pieces a day during the 11-hour shift, which is 182 pieces an hour and one every 20 seconds.

But the above may be the very highest wages, which not all spray paint workers receive. In June 2007, a New York Times reporter interviewed two workers at random from the RC2 Industrial Complex, who said they worked in the spray paint department and earned about $150 a month, which is about $34.64 a week. Working six days a week, this would be a daily wage of just $5.77, including 3 ½ hours of overtime. These workers were being shortchanged of $1.23 a day, or 18 percent of the wages legally due them. They should have earned $7.00 and not $5.77 for the 11 ½ hour shift.

The workers are paid on the 20th of the following month, so the factory is, in effect, withholding almost one month’s wages from each worker. The workers’ salaries are posted each day in the factory and again in full at the end of the month.

On the wage front, this is the best-case scenario, as Peng Hui pays the highest wages in the RC2 Industrial Complex, more than at Yong Yi or Ri Sheng.

The vast majority of workers have neither work injury nor health insurance, which is another direct violation of China’s laws Under China’s labor laws, an employer must inscribe their workers in the mandatory national Social Security program which covers work-

related injuries, health insurance, unemployment compensation and a small pension. In broad daylight, the Peng Hui factory completely disregards this, and only a handful of workers operating the most dangerous heavy machinery are provided work injury insurance. If injured on the job, most workers believe management will compensate them according to the law, but this is completely at the discretion of management, and it still leaves the workers without health insurance, unemployment insurance or their legal pension, as small as that may be.

Primitive Living Conditions Eight workers are crowded into each dorm room, sleeping in double-level metal bunk beds which line the walls. There are 16 such rooms on each floor, with the capacity to house 128 workers, though in the slow season there are generally 100 workers per floor. There is no air conditioning, and while there are two fans in each room, they provide little relief.

On each floor, the workers share a toilet room and a shower room which has just nine shower stalls, one for every 11 to 14 workers. Especially during the long, hot summer months, when workers are dripping in sweat at the end of the day, the shower room is particularly crowded as workers cue up to wait their turn to bathe.

The factory cafeteria provides food which the workers describe as mediocre at best. The workers get three entrees and a soup for each meal.

For dorm and food, the factory deducts 150 RMB ($19.89) per month from the workers wages.

Recently management wanted to raise the fees to 200 RMB ($26.53)—a 33 percent increase—but the workers strenuously opposed this, so at least for the time being, the increase is on hold.

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All the workers complained about the growing inflation rate in China, which is eating away at the real purchasing power of their wages. For example, in the last months, the price of pork has almost doubled, reaching $1.33 a pound. A bag of instant noodles is up seven cents, while even the cheapest fast food available at a primitive roadside stand is up over 13 cents. Even with excessive overtime, workers earning 1,400 RMB ($185.68) a month, say they are falling behind. Renting the smallest and cheapest one-room apartment now costs 200 to 250 RMB ($26.53 to $33.16) a month, which the workers simply cannot afford, which keeps them trapped in the crowded dorms.

For entertainment on Sunday, some of the younger, single workers will play pool in a nearby hall, which costs 40 cents an hour.

Yong Yi Toy Factory RC2 Industrial Complex, Dongguan At the Yong Yi factory, conditions are even worse than at Peng Hui. Yong Yi makes mostly metal toys. § Workers are forced to work an all-night, 21-to-23-hour shift every Saturday, from 8:00 a.m. to 5:00 or 7:00 a.m. the following Sunday morning. § Workers can be at the factory 98 hours a week, while toiling 86 hours, including 46 hours of overtime, which exceeds China’s legal limit by 453 percent! § Workers are permitted just two to 4.7 minutes to complete each toy.

At Yong Yi the daily shift is at least 15 hours, from 8:00 a.m. to 11:00 p.m., Monday through Friday, with an hour off for both lunch and supper.

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The workers toil 13 hours a day. However, on Saturday—in order to receive Sunday off—it is common for the workers to be kept well past midnight, often forced to put in 21 or even 23hour shifts, from 8:00 a.m. straight through to 5:00 or 7:00 a.m. the following Sunday morning.

The assembly department in particular works a 21 or 23-hour shift every week.

Routine Weekday Shift (15 hours a day) 8:00 a.m. – 12:00 p.m.

12:00 p.m. – 1:00 p.m.

1:00 p.m. – 6:00 p.m.

6:00 p.m. – 7:00 p.m.

7:00 p.m. – 11:00 p.m.

(Work, 4 hours) (Lunch, 1 hour) (Work, 5 hours) (Supper, 1 hour) (Overtime, 4 hours)

Monday through Friday, the workers are routinely at the factory 15 hours a day, while actually toiling 13 hours, including five hours of mandatory overtime each day. Then on Saturday, everyone routinely works past midnight, with many departments, such as assembly, kept for grueling 21-to-23-hour all-night shifts, from 8:00 a.m. to 5:00 or 7:00 a.m. the following morning. Working the all-night shift is the only way the workers will get Sunday off.

Even if they work just to midnight on Saturday, the workers are at the factory 91 hours a week while toiling 79 hours, including 39 hours of overtime, which exceeds China’s legal limit on allowable hours by 369 percent. More common would be to put in a 21 or 23-hour shift on Saturday, putting the workers at the factory 96 to 98 hours a week while working 84 to 86 hours. This includes 44 to 46 hours of overtime each week, which exceeds China’s legal limit by 429 to 453 percent!

Thomas & Friends Goes to China

Production goals are also high. Depending upon the toy’s complexity, thirty workers on a production line must complete 5,000 to 12,000 toys a day in the 13-hour shift. This means the workers are allowed just two to a little over 4 ½ minutes to assemble each toy, and are paid, at most, four cents for each toy they assemble.

Before the Thomas & Friends recall, the Yong Yi factory subcontracted a great deal of work to another nearby sweatshop called Hansheng.

Ri Sheng Toy Factory, RC2 Industrial Complex Ri Sheng primarily makes plastic toys. Here, the employees work a standard 14-hour daily shift, from 8:00 a.m. to 10:00 p.m., Monday through Saturday, toiling up to 72 hours a week. The workers report being routinely and seriously cheated of their proper overtime pay. Workers say they are paid just 3.95 RMB (52 cents) per hour for both weekday and weekend overtime, which by law must be paid at 80 cents and $1.06 per hour, respectively.

Moreover, there is some production support staff in the factory, mainly cleaners, who are being paid below the legal minimum wage.

17

Thomas & Friends Goes to China

Parents May Want to Know Retail price of Thomas & Friends Toys made in China is marked up 171 to 234 percent once they enter the U.S. The suggested retail price for Thomas the Tank Engine, a play tent, is $34.50, but at Toys ‘R’ Us and Target it is currently on sale for just $24.99, which sounds like a pretty good deal.

However, shipping records based on U.S. Customs documents show Thomas the Tank Engine play tents made in China entering the U.S. with a landed Customs value of just $10.32. This landed Customs value represents the entire cost of production—all materials, accessories, direct and indirect labor, profit to the factory in China, and even shipping costs. This means the mark-up on regularly priced Thomas the Tank toy, retailing for $34.50, is an astounding $24.08, or 234 percent above the $10.32 cost of production. And even with the steep discounts at Toys ‘R’ Us and Target, where the Thomas the Tank play tent is on sale for $24.99, the mark-up is still a hefty 142 percent, or $14.67 above the $10.32 cost of production.

Given the significant mark-up of $14.62 to $24.08 on each Thomas & Friends toys, one would imagine that there is enough money here to guarantee that these toys are both safe and made under humane conditions, and not under the abusive sweatshop conditions characteristic of Thomas & Friends production in China, where workers are stripped of their rights and forced to work grueling hours for illegally low wages.

The Thomas the Tank toys were made in China for PlayHut Inc. of California and entered the U.S. on October 8, 2006 through the Port of Los Angeles.

The 5,280 Thomas the Tank Engine play tents entered the U.S. with a total landed Customs value (cost of production) of $54,486, or just $10.32 each.

19

Toys "R" Us - Thomas The Tank Playtent

10/21/2007 06:30 PM

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Home > Outdoor Play > Play Tents & Tunnels > Thomas The Tank Playtent

Thomas The Tank Playtent List Price: $29.99 Our Price: $24.99

by: Playhut

Climb aboard Thomas the Tank Playtent for hours of makebelieve fun. This two-cube structure snaps into place in seconds. Enter through the side entrance or tunnel door; there's mesh ventilation in the roof and two mesh front windows....(read more)

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Manufacturer's Age: 3 years and up Our Recommended Age: 3 - 6 years (details) For a limited time get Free Standard Ground Shipping when you purchase this item! (details) Availability: In stock, usually leaves warehouse in 2 - 3 full bus. days. - (details)

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Thomas the Tank Vehicle Play Tent with Annie and Clarabel Cabooses Our Price: $39.99

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Product Description Climb aboard Thomas the Tank Playtent for hours of make-believe fun. This two-cube structure snaps into place in seconds. Enter through the side entrance or tunnel door; there's mesh ventilation in the roof and two mesh front windows. Tunnel ports allow for expandable play. Includes a convenient carry case. Made of durable nonwoven nylon and mesh. Measures 52"L x 26"W x 38"H. Manufacturer's Age: 3 years and up Our Recommended Age: 3 - 6 years (details)

Go Diego Go! Hideaway Play Tent Our Price: $19.99

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Item #: 553924 SKU: FDFB4E3F UPC/EAN/ISBN: 053762706970 Manufacturer #: 70697

PRODUCT REVIEWS SUMMARY

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(based on 4 ratings)

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Thomas & Friends Goes to China Playhut Thomas the Tank Play Vehicle : Target

10/21/2007 06:34 PM

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All Vehicles + Radio Control Outdoor Games + Activities Thomas The Tank Outdoor Toys Playhouses

• Sets up instantly so kids can climb aboard and be part of the fun with Thomas • EZ Twist system means you simply unfold it and it pops up • Includes sunroof, swing-open door, bold Thomas the Tank graphics and a handy carrying bag • 38Hx26Wx52L" • For ages 3 yrs. and up

Playhouses Bestsellers All Gifts For Girls 4-5 Years All Gifts For Boys 4-5

Better Together

Years All Gifts For Girls 2-3 Years All Gifts For Boys 2-3 Years All Girls + Boys Gifts

Buy this Playhut Thomas the Tank Play Vehicle with Playhut Beauty Boutique today!

Total List Price: $49.98 Buy Together Today: $49.98

http://www.target.com/Playhut-Thomas-Tank-Play-Vehicle/dp/B000065C…_2/601-9223773-2324154?ie=UTF8&index=target&rh=k%3Aplayhut&page=1

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21

Thomas & Friends Goes to China

More Thomas the Tank Retail Mark-ups of $17.99 to $27.00 on Each Toy It is the same story with similar Thomas the Tank Engine play tents, but this time with two cabooses.

The suggested retail price is $42.75, however at Wal-Mart—which is in the midst of a price war to counter slumping sales—the Thomas the Tank toy can be purchased on sale at just $33.74, which is a $9.01 discount.

Wal-Mart could afford to do this, as the Thomas the Tank toy, with two cabooses were also made in China for PlayHut, with shipping documents showing 2,028 Thomas the Tank Toys entering the U.S. on November 5, 2006, with a landed Customs value (the total cost of production) of $31,931, or $15.75 per toy. This means that the mark-up on the regularly priced $42.75 Thomas the Tank is a shocking $27.00, or 171 percent above the $15.75 cost of production. Even with Wal-Mart slashing the price of the toy to $33.74 in order to undercut other retailers, Wal-Mart’s mark-up is still $17.99, or a hefty 114 percent above the total production cost.

These documents, which the companies try to hide from the American people, show once again that unsafe toys made under abusive sweatshop conditions do not have to be the norm. It does not have to be this way.

23

Playhut Thomas the Tank Play Structure - Wal-Mart

10/21/2007 06:36 PM

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For the Home You are here: Home Page > For the Home > Furniture > Kids' Furniture > Play Tents & Slumber Bags

PLAYHUT THOMAS THE TANK PLAY STRUCTURE

$33.74

Availability: • Online - IN STOCK Delivery Options: •

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Free shipping to your store.

Arrives in 7 to 10 business days.

• Ship to home Usually takes 24 to 48 hours to process.

See estimated arrival date.

Information below: • Features & Specifications • May We Also Suggest

May We Also Suggest Thomas & Friends Table and Chair Set with Storage

• Warranty Information

Enlarge image Age Range: 3 Years and up

• Gifting Options

$39.96

• 0% Interest Offer / Payment Options

Thomas the Tank Engine 9 Bin Toy Organizer

• Shipping & Delivery $37.87 See more below

Features & Specifications All Aboard! Partnered with this pop-up Thomas vehicle, your child's imagination will speed him away to the exciting island of Sodor, home of Thomas and Friends. Including Annie and Claribel Caboose, this entire play structure stretches over five feet long. Your child will enjoy the extra play room or can invite some of his pals along for the ride.

Features Thomas and Friends characters Patented EZ Twist technology allows the structure to fold down to less than a quarter of its size and provides for instant setup Thomas the Tank connects with Annie and Claribel Caboose for versatile play A tunnel port provides crawl-through fun and expandable Lightweight, portable design goes anywhere Measures over 5' long Character:

Thomas and Friends

Shipping Weight (in pounds):

4.8

Product in Inches (L x W x H):

26.0 x 78.0 x 38.0

http://www.walmart.com/catalog/product.do?product_id=4921732

24

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Thomas & Friends Goes to China

Thomas the Tank Shipping Record October 2006

Shipper PLAYHUT INC.(CHINA OFFICE.XIAMEN) 4 FLOOR 501,XINGLONG ROAD,HULIDISTRIC XIAMEN CHINA TEL:0592-5702552

Notify Party PLAYHUT INC. 368 S.CHERYL LANE CITY OF INDUSTRY, CA 91789 U.S.A. TEL:9098698083 FAX:909-8697371

Consignee PLAYHUT INC. 368 S.CHERYL LANE CITY OF INDUSTRY.CA 91789 U.S.A. TEL:9098698083 FAX:909-8697371

Packaging Information Weight: 8580 KG Measurements: 108 CM Quantity: 1320 CTNS

Shipment Detail

Carrier: APLU - AMERICAN PRESIDENT LINES Vessel: MOL ENTERPRISE US Port: 2704 LOS ANGELES For Port: 57035 SHANGHAI Pre Carrier: SHANGHAI, PC

Country of Origin: Coastal Region:

PEOPLES REP OF CHINA WEST

Arrival Date: 10/08/2006

Estimated Value: $54,486.00 Container

Quantity

Description

NOSU4455545

TRLU4286060

Container

660

THOMAS THE TANK EB006/0309

660

THOMAS THE TANK EB006/0309

NOSU4455545

TRLU4286060

ITEM NO.: 70697-A04

Marks & Numbers

THOMAS THE TANK QUANTITY.: 4 PIECES MEASUREMENTS.:19X16.

5X16 INCHES MARKS AND NUMBERS WITH CONTAINER NOSU4455 54

25

Thomas the Tank Shipping Record November 2006 Shipper Consignee PLAYHUT INC.(CHINA OFFICE.XIAMEN) 4 PLAYHUT INC. 368 S.CHERYL LANE FLOOR 501,XINGLONG ROAD,HULI DISTRI CITY OF INDUSTRY.CA 91789.U.S.A. XIAMEN CHINA TEL:0592-5702552 TEL:9098698083 FAX:909-8697371

Notify Party PLAYHUT INC. 368 S.CHERYL LANE CITY OF INDUSTRY, CA 91789 U.S.A. TEL:9098698083 FAX:909-8697371

Country of Origin: PEOPLES REP OF CHINA Vessel: MOL ENDURANCE US Port:2704 LOS ANGELES Pre Carrier: SHANGHAI, PC

Shipment Detail

Container

Coastal Region: WEST For Port: 57035 SHANGHAI

$31,931.00

Estimated Value: Quantity

GLDU0905469 675

Arrival Date: 11/05/2006

Description THOMAS THE TANK AMS PP EB006/0309 FREIGHT COLLECT

Container GLDU0905469

Marks & Numbers (FRONT AND REAR MARKS)

ITEM NO.:79823

THOMAS THE TANK WITH 2 CABOOSES

MEASUREMENTS:18.5X16.

5X17

26

Packaging Information Weight: 5028 KG Measurements: 57CM Quantity: 675 CTNS

QUANTITY.: 3PCS

INCHES C/T NO.:OF 675 CTNS

Thomas & Friends Goes to China Thomas the Tank Engine with Cabooses by Playhut

10/21/2007 06:41 PM

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Safe, no small pieces, toys for your child!

This item is in stock! We will ship by the next business day!

Click here for the UPS Delivery Time Map to make your shipping method selection!

All Aboard! This pop-up Thomas playset will let your child's imagination chug away to the exciting island of Sodor, home to Thomas and Friends. This pop-up playset includes: Thomas the Tank Engine, Annie and Claribel Caboose each of the three sections velcro together for great crawling in and out of fun.

Fully set up, this entire play structure stretches over five feet long.

Kids will enjoy the extra play room to invite friends along for the ride.

Easy to clean breathable mesh panels on the top and sides and a sturdy wire frame make for hours of imaginary playtime. Grownups will love that it snaps down with a quick flip of the wrist for easy storage in a closet or under a bed! A tunnel port provides crawlthrough fun and expandable Lightweight, portable design goes anywhere Measures over 5' long Product Dimensions L: 104" x W: 26" x H: 38"

Availability: Usually ships the next business day.

79823 Reg price: $42.75 Sale: $35.50

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Shipping charges may be viewed by clicking on "Order", "Check Out", and then complete the delivery address and click on "Continue". We link to UPS or Fedex shipping tables for actual cost calculation. The order is not completed until you "Submit" the order form.

http://tinkertots.stores.yahoo.net/thtaenwicaby.html

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27

Thomas the Tank Engine by Playhut

10/21/2007 06:38 PM

Go

Safe, no small pieces, toys for your child!

This item is in stock! We will ship by the next business day!

Click here for the UPS Delivery Time Map to make your shipping method selection!

Choo! Choo! Thomas the Tank Engine Vehicle.

Peep, Peep! Here comes Thomas the Tank!

This versatile 2-cube role-play structure features a flap door for crawl through fun and tunnel ports for expandable play. EZ Twist technology allows for instant set-up and quick fold-down for convenient storage.

Features : Instant set-up with patented EZ Twist Technology.

Two cube versatile play structure.

Sunroof provides pop-up fun.

Tunnel port for crawl-through fun.

Swinging side door for easy accessibility and improved role-play.

Bright, bold graphics for greater fun.

Lightweight & portable - "Take it anywhere you go!"

Allows children to "flex" their imagination.

Dimension : Approx. 52" x 26" x 38"H (all vehicles vary in size) There is no floor in this structure.

Materials : Non-woven, mesh, nylon binding Ages 3 and up.

L52" x W26" x H36.

Availability: Usually ships the next business day.

70697 Reg price: $34.50 Sale: $29.95 http://tinkertots.stores.yahoo.net/thomtanenbyp.html

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