What should a company do?

A company should remember, whenever it thinks about outsourcing/subcontracting *anything*, regardless of whether it's manufacturing, IT, call centres, or even management [1], that outsourcing may relieve them of some of the unwanted burden but it doesn't relieve them of their legal or commercial responsibilities.There may well be consequences if they choose to ignore this, as Mattel have just found out. Others besides Mattel will hopefully be having interesting discussions about whether the saving in manufacturing costs (by going Chinese or whatever) is worth the long term risk to the business.

The "Made in China" label may start to be the modern equivalent of "Made in Hong Kong" from thirty years ago.

[1] Howcome you never hear of management being outsourced ? Outsourcing typical "management by spreadsheet" sounds like the ideal way of "LEAN"ifying a whole layer of non-productive high-cost company overhead.