As most gun enthusiasts will tell you the AR-15 was designed by Eugene Stoner and then sold to Armalite. Armalite then sold the design to Colt which enhanced it with an auto safety seer and sold it to the Department of Defence as the M-16.
With that history there is one question that I have. I have heard countless times while serving in the Army that during the Vietnam War Mattel made the M-16. When I first joined the Army the service rifle was the M-16A1. Some of these rifles that I had seen were converted M-16s (3 prong flash hider and inscribed M-16). All said Colt Firearms none were inscribed with Mattel.
Doing some searches and research I have come up with this answer. Once the M-16 was issued it replaced the M-14 ( The last wooden battle rifle). A heavy duty rifle that could easily be used as a baseball bat if you ran out of ammo. After humping this thing through the jungles of Vietnam soldiers were given this rifle made of plastic that comparatively looked and felt like a toy.
Now the Mattel connection legitimately comes through here. The original M-16s that were issued actually did have Mattel markings.......on the hand guards! It seems to fill the original orders colt subcontracted the plastic parts (Handguards, buttstock, and pistol grip) with Mattel. With these initial parts Mattel took the liberty of having their logo put on the parts during the plastic forming process. In later castings the logo was removed.
So in closing as we know Colt made and always made the M-16. Mattel handled the plastic.