The Fall Toy Preview, known informally as Toy Fair, is one of the $22.5 billion toy industry's biggest events. Most years, the buzz at the event is about the hottest new toys. But at the event in Dallas earlier this month, the conversation was as much about toy safety and recalls as it was about new products and sales.

To get an entrepreneur's perspective on the industry, we decided to check in with Dan Henderson, who runs Trussville, Ala.-based Summit Products, a $26.8 million educational toy manufacturer that ranked No. 1,258 on the 2007 Inc. 5,000 and manufactures all of its products in China.

Summit's bestselling product is the YOUniverse ATM, a functioning ATM machine, and its big hit at this year's Toy Fair was Toy Racer, a car fueled by water and compressed air. "You pump it up and once you release it, it shoots across the pavement," Henderson says. "Air and water come out of the back. It's really cool." Although Henderson's company has never had a recall, he is as concerned about the problems roiling his industry as any toy executive.

Why the jitters? In recent months, RC2 recalled Thomas The Tank Engine Toys because of lead paint. Mattel, too, recalled millions of toys decorated with lead paint, as well as millions of Polly Pockets and Batman action figures with tiny magnets in them (the magnets were easily dislodged and can cause serious intestinal problems, and even fatalities, if toddlers swallow them). Simplicity recalled 1 million cribs after faulty design caused the deaths of at least two babies. Eveready Battery recalled 78,000 flashlights that had high levels of lead in their paint.

The whole business is terrifying for parents, damaging to toy companies, and an image problem for Chinese manufacturers. Attempting to reassure an alarmed public, the Toy Industry Association has announced its support for proposed legislation requiring national mandatory safety testing of all toys sold in the United States. Predictably, the call for more regulation was received coolly by some in the industry, including Henderson.

What's your reaction to the Toy Industry Association's request to Congress to mandate safety testing of all toys sold in the United States?

I don't think the answer is the government. I think we need to handle it inside the industry. The industry is in the process right now of coming up with some very specific standards, our own very well-defined requirements to take care of the problem and present this to the customer as the answer. Ultimately, the recalls have got to stop in order for consumer confidence to come back.

What would you do to stop the recalls?

We have to stop the root of the problem. One, you take care of the raw materials on the front side, and you ensure you're only putting the good stuff in. Second, there's the issue of how you inspect. It needs to be true random testing.

Some random testing isn't "true"?

If you tell manufacturers, "Look, I want you to have something inspected," they can make sure that that particular piece doesn't have a problem. You hear stories…. With true random testing, the manufacturer doesn't have anything to do with selecting the sample. In our case, we do random testing of our shipments quarterly, using an independent lab. There's a person there who just wakes up one day and says, "OK, pick this [sample] to test."

What exactly does the Consumer Product Safety Commission require you to do now?

Frankly, you're required to test and make sure a product is OK when you design it, but you're only required to test once. Just because you pass the first time doesn't mean you're going to pass forever. It means your design is good, but as we all know, lead paint is a dynamic factor.

Would anything positive come of a federal mandate for safety testing?

The one thing that could probably come from that, I guess, is that the consumer would gain a level of confidence from the government being involved as a watchdog.

There's been a lot of blame for these problems placed on Chinese manufacturers. What's your assessment of the quality control of those overseas factories?

I've been dealing with China now for 13 years and it's gotten better. It's like buying a car in the States. You can buy a car from a dealer with integrity or from one without it. The same thing applies to factories in China. It's imperative that you deal with credible people. I personally know every one of the factory owners [who make Summit products]. I was in China three weeks ago. I went to eight or nine paint factories. They test all of the raw materials. I have pulled random cans out of thousands of cans tons of times and said, "Go pull me the independent lab tests." I have yet to see one test that is over 10 parts per million of lead. The requirement is not more than 600 parts per million. The problems occurring out there are not due to technical issues; it's somebody blatantly using lead paint when they're not supposed to. I'm usually in China once a year, but my office, we're there every two months. [Lately] we have been there every month.

On Sept. 21, Mattel's executive vice president of worldwide operations apologized to China's product safety chief for blaming China for all of its recalls. What did you think of Mattel's apology?

I admire [CEO Robert A.] Eckert's way of taking responsibility for the whole thing. He's done an excellent, excellent job. Mattel has the strongest quality assurance program in the industry -- so this could happen to anyone. What it boils down to is we are responsible.

Are your distributors asking for any additional reassurances of safety?

We could put big bold stickers on our products, but I just don't think it's the right thing to brag about not having lead paint in your products. The consumer should expect it.

How are consumers reacting to the "Made in China" label?

Frankly, people are going to become more company-specific, more brand-specific. They're going to avoid certain companies [because of the] recalls. I've told my people the most important thing we can do is make certain we never ever have a recall.