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SEN. BYRON DORGAN (D), NORTH DAKOTA: I think this is the downside of the global outsourcing of American jobs. You know, it did look like a free ride for American corporations, those that wanted to outsource jobs in search of cheap labor, in search of lower standards and organizations. Now what we see are the results of that.
PILGRIM: A so-called brand doesn't always mean U.S. quality anymore. U.S. companies can pay the price for substandard Chinese manufacturing. Mattel boasts its toy brand, but found its quality control compromised by Chinese factories.
And U.S. companies often can't control factory conditions in China. In many Chinese factories, workers can't report long hours or abuses.
CHARLES KERNAGHAN, NATIONAL LABOR COMMITTEE: All you have to do is go by the factory at 11:00 at night and see it's still operating. All you have to do is go by on a Sunday and see them working.
PILGRIM: Mattel openly publishes audits of its Chinese factories on its Web site done by an independent auditor, the International Center For Corporate Accountability.
DR. PRAKASH SETHI, THE INTERNATIONAL CENTER FOR CORPORATE ACCOUNTABILITY: Mattel is finding all these problems. There is no reason to believe that those problems don't exist for the toys and the electronics and all the other goods that are being made for other companies.
(END VIDEOTAPE)
PILGRIM: Now, it's clear that many U.S. companies have lost control of the supply chain by depending so heavily on these Chinese factories. But ultimately U.S. companies have a responsibility by law to U.S. consumers and these factories have to be monitored to stop the Chinese manufacturing from cutting corners and producing dangerous and defective products -- Lou.
DOBBS: Well, we're reaching really absurd levels in this country. We have to lease -- our military has to lease Russian supercargo aircraft to transport new heavily armored and efficiently protective vehicles to Iraq for our troops.
We have -- Mattel claims its the world's leading toy brand, but there's nothing behind brand. It's just -- you know, it is absurd that none of the federal agencies designed to help protect the American consumer has taken a single action against Mattel or a single action against those Chinese manufacturers.
PILGRIM: You're absolutely right. It's not regulated properly, nor is the U.S. corporations monitoring it properly. They hire a Chinese factory and then they subcontract out. They don't know who's making these things.
DOBBS: I believe that 2008 is going to be a very interesting, indeed, election, because I believe over the course of the next year, perhaps not in time for the primaries, but I believe over the course of the next year, the American people are awakening to what a sham is being perpetrated by corporate America, by this administration, and both political parties.
The hell with the American consumer. The hell with the American citizen. They are going to do as they would have their corporate masters bid them. And it's got to change. And it's got to change soon.
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