HUDSON, OHIO — Tough times in the toy industry are rippling up to Erie, Pa., where Little Tikes Co. demanded that its injection molding suppliers pay Little Tikes a 5 percent price rollback, retroactive to Jan. 1.
Sources at three Erie-area custom injection molders that serve Little Tikes said the firm sprang the request in April. It was negotiated, but the sources said most companies have paid. They spoke on condition they remain anonymous.
Top Little Tikes executives confirmed the move, which was engineered by Mike Neff, vice president of operations for the toy maker.
``We, as part of our cost reduction efforts internally, set goals to drive our costs down in the neighborhood of 5 percent, and we engaged our suppliers to participate in that cost-reduction activity,'' Neff said in an Aug. 6 interview at Little Tikes' Hudson headquarters.
Sources at the Erie-area molders were understanding.
``We want to continue working for them,'' one said. ``We're very happy with them. We've been with them for a long time, and I just hope they get back on the right track.''
Another said the give-back was ``strictly on value added.'' He said Little Tikes remains a valued customer. ``They're just going through some tough times,'' he added.
In Erie, they want to know: Is Little Tikes committed to U.S. sourcing of injection molded parts for its U.S. toy factories? Neff stopped short of a guarantee.
``What we're looking for is really the overall best global sourcing value,'' he said. ``I think that there will always be an element of that that will be North American-based. There's some elements that are not competitive in North America. It's certainly part of the equation.''