Legend has it that the hand guard of the first M16's was made by Mattel. Some Vietnam-era soldiers vehemently swear that their hand guard was stamped Mattel. Others swear equally vehemently that Mattel had no part in it. It's mostly the stuff of argument on the various gun forums. Snopes has a discussion about it, stating that the first versions of the handgrip were stamped Mattel, and the later versions, while still made by Mattel, were not stamped. I've never seen one stamped, but that doesn't mean it didn't happen . . .
I've never believed that Mattel ever actually mfg'd any M16 parts and most truly knowledgeable authorities hold that they didn't. I don't recall any mention of Mattel in the Ezell and Stevens work "The Black Rifle: M16 Retrospective," by CGP.
It's a cool story, but I believe it is just that, a story.