Etch A Sketch Ethics
Etch-A-Sketch Ethics
The Ohio Art Company is perhaps best known as the producer of one of the top-selling toys of all time, the venerable Etch-A-Sketch. More than 100 million of the familiar red rectangular drawing toys have been sold since 1960 when it was invented. The late 1990s, however, became a troubled time for the toy’s maker. Confronted with sluggish toy sales, the Ohio Art Company lost money for two years. In December 2000, it made the strategic decision to outsource production of the Etch A-Sketch toys to Kin Ki Industrial, a leading Chinese toymaker, laying off 100 U.S. workers in the process. The closure of the Etch-A-Sketch line was not unexpected among employees. The company had already moved the production of other toy lines to China, and most employees knew it was just a matter of time before Etch-A-Sketch went too. Still, the decision was a tough one for the company, which did most of its manufacturing in its home base, the small Ohio town of Bryan
(population 8,000). As William Killgallon, the CEO of the Ohio Art Company, noted, the employees who made the product “were like family. It was a necessary financial decision we saw coming for some time, and we did it gradually, product by product. But that doesn’t mean it’s emotionally easy.” In a small town such as Bryan, the cumulative effect of outsourcing to China has been significant. The tax base is eroding from a loss of manufacturing and a population decline. The local paper is full of notices of home foreclosures and auctions. According to former employees, the biggest hole in their lives after Etch-A-Sketch moved came from the death of a community. For many workers, the company was their family, and now that family was gone. The rational for the outsourcing was simple enough. Pressured to keep the cost of Etch-A-Sketch under $10 by big retailers such as Walmart and Toys “R” Us, the Ohio Art Company had to get its costs down or lose money. In this case, unionized workers making $1,500 a
The Ohio Art Company is perhaps best known as the producer of one of the top-selling toys of all time, the venerable Etch-A-Sketch. More than 100 million of the familiar red rectangular drawing toys have been sold since 1960 when it was invented. The late 1990s, however, became a troubled time for the toy’s maker. Confronted with sluggish toy sales, the Ohio Art Company lost money for two years. In December 2000, it made the strategic decision to outsource production of the Etch A-Sketch toys to Kin Ki Industrial, a leading Chinese toymaker, laying off 100 U.S. workers in the process. The closure of the Etch-A-Sketch line was not unexpected among employees. The company had already moved the production of other toy lines to China, and most employees knew it was just a matter of time before Etch-A-Sketch went too. Still, the decision was a tough one for the company, which did most of its manufacturing in its home base, the small Ohio town of Bryan
(population 8,000). As William Killgallon, the CEO of the Ohio Art Company, noted, the employees who made the product “were like family. It was a necessary financial decision we saw coming for some time, and we did it gradually, product by product. But that doesn’t mean it’s emotionally easy.” In a small town such as Bryan, the cumulative effect of outsourcing to China has been significant. The tax base is eroding from a loss of manufacturing and a population decline. The local paper is full of notices of home foreclosures and auctions. According to former employees, the biggest hole in their lives after Etch-A-Sketch moved came from the death of a community. For many workers, the company was their family, and now that family was gone. The rational for the outsourcing was simple enough. Pressured to keep the cost of Etch-A-Sketch under $10 by big retailers such as Walmart and Toys “R” Us, the Ohio Art Company had to get its costs down or lose money. In this case, unionized workers making $1,500 a