Made in America label stages comeback at U.S. stores

May 3, 2013 by Leave a comment

NEW YORK: When Roger Simmermaker went shopping for clothes at a Florida mall in the mid-1990s, he wanted to buy American, but to his frustration, he couldn’t find anything made in the USA.

The experience motivated Simmermaker, an electronics technician by trade, to write “How Americans Can Buy American” – a guide to finding products manufactured in the United States, which were a scarce commodity at the time.

Nearly 20 years after writing the book, he has seen a big change, with the pendulum in full swing back toward a wider choice of American-made products. They are often available without the expected higher price tag.

“It’s definitely easier,” says Simmermaker, 47, who lives in Orlando and works for a defense contractor. “Especially in the last year or so, things have really changed.”

Those who believe in buying American-made goods from US-owned companies say it creates jobs and boosts the economy through reinvested profits and taxes.

Profit-driven US companies have their own reasons for locating factories, but manufacturers of goods ranging from refrigerators and dishwashers to laptops and tablets are starting to bring some of their production home, affording more opportunities for consumers with the patriotic conviction that Americans ought to buy American.

Better still, that “Made in the USA” label may no longer carry such a premium price tag. That’s because production and shipping costs in China and other foreign manufacturing centers are rising. Shifting some manufacturing back to the United States doesn’t necessarily mean manufacturers have to raise prices to compensate for higher labor costs.

To be sure, many industries are still dominated by imports – toys and textiles, for example. Still, Simmermaker and others who believe in buying American are seeing a broad shift.

“Reshoring” advocates were thrilled earlier this year when Wal-Mart Stores Inc., the world’s largest retailer, announced it was throwing its weight behind the movement. In January, the chain – known for its extensive selection of imported goods – said it would spend an additional $50 billion over the next 10 years on American-made products, “helping to onshore US production in high-potential areas like textiles, furniture and higher-end appliances.”

Likewise, Apple Inc. said it planned to build some of its iMac line in the United States instead of China. Ford Motor Co., Coleman Co. (part of Jarden Corp. ) and Master Lock Co. (part of Fortune Brands Home & Security Co.) all have said they’re returning some manufacturing to the United States. The list goes on.

WHAT IT MEANS FOR CONSUMERS 

While few companies will move production for patriotic reasons alone, the public relations boost that goes with a decision to bring jobs back to the United States is gravy.

“They run the numbers and say ‘We can deliver just as cheaply from a US operation as we can from, say, China.’ It has some nice extra benefits,” says Dan Seiver, chief economist for Reilly Financial Advisors, a wealth management firm in San Diego, California. “Whatever credit goes with it is fine”

With little pricing difference, the impact on US consumers might not be that obvious. But Simmermaker and other advocates also contend that products made in the United States are often higher-quality and safer than those made elsewhere.

There is a decided upside for the companies, too. Making products closer to their end-market allows them to be more nimble in terms of customizing and delivering products.

That was the case with Spreadshirt, a Germany-based custom shirt maker that recently opened a plant in Nevada to supplement the output of its existing facility in Pennsylvania.

In 2011, the company was running its Pennsylvania plant around the clock. To keep up with holiday demand, it was forced to send some work to a plant in Poland, said Mark Venezia, vice president of global sales and marketing for North America.

But the company quickly realized that the distance hurt overall costs and speed – to the tune of about $2 more per unit. “We didn’t lose money, but, obviously, it hurt our bottom line,” Venezia said.

Hunting for a new location led Spreadshirt to Henderson, Nevada, where facilities that met specifications were available at favorable terms, along with a pool of prospective workers.

“We just got this incredible deal that provided us so many benefits,” Venezia said.

 

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How ‘Made in the USA’ is Making a Comeback

April 11, 2013 by Leave a comment

Rana Foroohar Curious Capitalist

By 

The U.S. economy continues to struggle, and the weak March jobs report — just 88,000 positions were added — briefly spooked the market. But step back and you’ll see a bright spot, perhaps the best economic news the U.S. has witnessed since the rise of Silicon Valley: Made in the USA is making a comeback. Climbing out of the recession, the U.S. has seen its manufacturing growth outpace that of other advanced nations, with some 500,000 jobs created in the past three years. It marks the first time in more than a decade that the number of factory jobs has gone up instead of down. From ExOne’s 3-D manufacturing plant near Pittsburgh to Dow Chemical’s expanding ethylene and propylene production in Louisiana and Texas, which could create 35,000 jobs, American workers are busy making things that customers around the world want to buy — and defying the narrative of the nation’s supposedly inevitable manufacturing decline.Time Magazine Made in the USA

The past several months alone have seen some surprising reversals. Apple, famous for the city-size factories in China that produce its gadgets, decided to assemble one of its Mac computer lines in the U.S. Walmart, which pioneered global sourcing to find the lowest-priced goods for customers, said it would pump up spending with American suppliers by $50 billion over the next decade — and save money by doing so (for TIME’s new cover story, written by myself and Bill Saporito, and available to subscribers, click here). And Airbus will build JetBlue’s new jets in Alabama.

Some economists argue that the gains are a natural part of the business cycle, rather than a sustainable recovery in the sector. But I would argue that the improvements of the last three years aren’t a blip. They are the sum of a powerful equation refiguring the global economy. U.S. factories increasingly have access to cheap energy thanks to oil and gas from the shale boom. For companies outside the U.S., it’s the opposite: high global oil prices translate into costlier fuel for ships and planes — which means some labor savings from low-cost plants in China evaporate when the goods are shipped thousands of miles. And about those low-cost plants: workers from China to India are demanding and getting bigger paychecks, while U.S. companies have won massive concessions from unions over the past decade. Suddenly the math on outsourcing doesn’t look quite as attractive. Paul Ashworth, the North America economist for research firm Capital Economics, is willing to go a step further. “The offshoring boom,” Ashworth wrote in a recent report, “does appear to have largely run its course.”

Today’s U.S. factories aren’t the noisy places where your grandfather knocked in four bolts a minute for eight hours a day. Dungarees and lunch pails are out; computer skills and specialized training are in, since the new made-in-America economics is centered largely on cutting-edge technologies. The trick for U.S. companies is to develop new manufacturing techniques ahead of global competitors and then use them to produce goods more efficiently on superautomated factory floors. These factories of the future have more machines and fewer workers — and those workers must be able to master the machines. Many new manufacturing jobs require at least a two-year tech degree to complement artisan skills such as welding or milling. The bar will only get higher: Some experts believe it won’t be too long before employers will expect a four-year degree — a job qualification that will eventually be required in many other places around the world too.

(MORE: Is U.S. Manufacturing Really Back?)

Understanding this new look is critical if the U.S. wants to nurture manufacturing and grow jobs. There are implications for educators (who must ensure that future workers have the right skills) as well as policy-makers (who may have to set new educational standards). “Manufacturing is coming back, but it’s evolving into a very different type of animal than the one most people recognize today,” says James Manyika, a director at McKinsey Global Institute who specializes in global high tech. “We’re going to see new jobs, but nowhere near the number some people expect, especially in the short term.”

Still, if the U.S. can get this right, though, the payoff will be tremendous. Manufacturing represents a whopping 67% of private-sector R&D spending as well as 30% of the country’s productivity growth. Every $1 of manufacturing activity returns $1.48 to the economy. “The ability to make things is fundamental to the ability to innovate things over the long term,” says Willy Shih, a Harvard Business School professor and co-author of Producing Prosperity: Why America Needs a Manufacturing Renaissance. “When you give up making products, you lose a lot of the added value.” In other words, what you make makes you. For more on the rebound in manufacturing and what it means for jobs and economic growth in the US, check out this week’s TIME magazine cover story, “Made In America.”
Read more: http://business.time.com/2013/04/11/how-made-in-the-usa-is-making-a-comeback/#ixzz2QCREv0EC

Source: http://business.time.com/2013/04/11/how-made-in-the-usa-is-making-a-comeback/

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Intel’s First Factory Customer Touts Made-in-USA Chips

February 20, 2013 by Leave a comment

Wall Street Journal

By Don Clark

A chip company called Achronix on Wednesday is announcing that the first fruits of Intel’s new build-to-order service are emerging from the factory. That’s a milestone for both companies, and a surprising sidelight could play into the story–worries about dependence on non-U.S. manufacturers.

The Silicon Valley startup in 2010 turned to Intel, which opted to break from long-standing practice and use its sophisticated factories and manufacturing processes to serve customers beyond Intel’s own chip-design groups. Achronix became one of two publicly announced users of the new Intel foundry business, as such services are called.

Intel believes it can make smaller and more sophisticated transistors than other foundries. Achronix, which makes a variety of programmable chips that use lots of transistors, says its bet on Intel has paid off as advertised.

The chips, which include models with a whopping six billion transistors, consume half the power of competing chips and cost about half as much, Achronix says. It is shipping sample quantities to customers now and, when extended testing is completed, will be shipping them in volume in the third quarter, says Robert Blake, the company’s president and chief executive officer.

Most foundry factories are in Taiwan or other parts of Asia. Achronix is quick to point out that the entire process of making its chips is handled in the United States.

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January Jobs Report: Unemployment Rate Up to 7.9 Percent, 157,000 Jobs Added in January

February 1, 2013 by Leave a comment

ap_streetcar_construction_ll_130131_wg

Workers lay streetcar track on Loyola Avenue in New Orleans, in this Nov. 8, 2012 photo. (Gerald Herbert/AP Photo)

 

 ABC NEWS

Feb. 1, 2013

The U.S. economy added 157,000 jobs in January, as the unemployment rate ticked up slightly to 7.9 percent from 7.8 percent, according to data from the Labor Department.

“This jobs figure today indicates that the engine of the economy  is revving, but the car isn’t going anywhere,” said Tom di Galoma, managing director with financial services firm, Navigate Advisors LLC.

Employment numbers for November were revised higher to 247,000 from 161,000. For December, they were also revised higher to 196,000 from 155,000.

“The uncertainty will be around what happens with government jobs, because the uncertain impact of the fiscal cliff in December may have led to some layoffs in January,” said Kevin Dunning, global economist at the Economist Intelligence Unit. “Even though it was ultimately resolved on Jan. 1, some federal government workers may have been laid off.”

Still, “it looks like hiring has been quite resilient despite all the fiscal uncertainty, and so our expectation is that employment continued to climb in January,” he said.

“But it may be a bit diminished because we’ve had quite a strong trend for the last six months, and we’ve always expected that the fiscal tightening will weigh on the economy in early 2013. So, our thought will be that there will be slightly slower job growth than we got used to in the second half of 2012.”

According to the Bureau of Labor Statistics’ Unemployment Insurance Weekly Claims Report, for the week ending Jan. 26, the advance figure for seasonally adjusted initial claims was 368,000, an increase of 38,000 from the previous week’s unrevised figure of 330,000. The four-week moving average was 352,000, an increase of 250 from the previous week’s unrevised average of 351,750.

Stephen Bronars, a senior economist with Welch Consulting in Washington D.C. cautions people not to “overreact” to January’s jobs report.

“Careful observers examine the size of the seasonal adjustment. January is a very difficult month for the BLS to forecast,” he said.

Typically, payroll falls by 2.8 million between December and January because of seasonal workers’ leaving jobs after the holidays, he said. But a report released Thursday by payroll provider ADP noted that private-sector employment increased by 192,000 for January 2013, on a seasonally adjusted basis.

This report, which does not include government or public jobs data, noted that goods-producing employment increased by 15,000 jobs in January, primarily fueled by a 15,000 increase in construction jobs. Manufacturing jobs, however, were down by 3,000.

Service jobs, including restaurant workers, health care workers, housekeepers, teachers and retail sales positions, increased by 177,000, with professional/business services adding 40,000 jobs for the month. the ADP report said. Trade/transportation/utilities added 33,000 jobs, and financial services added 12,000 jobs.

Businesses with 49 or fewer employees added 115,000 jobs in January, according to the ADP report. Employment levels among medium-size companies, that is, those with 50 to 499 employees, rose by 79,000, while employment at companies with 500 or more employees fell by 2,000.

Carlos A. Rodriguez, president and chief executive officer of ADP, said in a statement that private sector employers created an average of 183,000 new jobs per month during the past three months, “an encouraging sign of steady improvement in the job market.”

Economist Bronars noted that in January 2012, nonfarm payroll grew by 275,000 after seasonal adjustment (even though unadjusted payroll declined by 2.67 million), the biggest single month gain in the past 30 months.

“Even though jobs are being created, people who gave up searching for work are coming back into the labor force and will be counted as unemployed until they find work,” Bronars said.

ABC News’ Abby Ellin contributed to this report.

To learn more about Made in USA Certification: http://www.USA-C.com

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Made in America, Again

January 23, 2013 by Leave a comment

Why Manufacturing Will Return to the U.S.

By:Harold L. Sirkin, Michael Zinser, and Douglas Hohner

Made in America

 

For more than a decade, deciding where to build a manufacturing plant to supply the world was simple for many companies. With its seemingly limitless supply of low-cost labor and an enormous, rapidly developing domestic market, an artificially low currency, and significant government incentives to attract foreign investment, China was the clear choice.

Now, however, a combination of economic forces is fast eroding China’s cost advantage as an export platform for the North American market. Meanwhile, the U.S., with an increasingly flexible workforce and a resilient corporate sector, is becoming more attractive as a place to manufacture many goods consumed on this continent. An analysis by The Boston Consulting Group concludes that, by sometime around 2015—for many goods destined for North American consumers—manufacturing in some parts of the U.S. will be just as economical as manufacturing in China. The key reasons for this shift include the following:

  • Wage and benefit increases of 15 to 20 percent per year at the average Chinese factory will slash China’s labor-cost advantage over low-cost states in the U.S., from 55 percent today to 39 percent in 2015, when adjusted for the higher productivity of U.S. workers. Because labor accounts for a small portion of a product’s manufacturing costs, the savings gained from outsourcing to China will drop to single digits for many products.
  • For many goods, when transportation, duties, supply chain risks, industrial real estate, and other costs are fully accounted for, the cost savings of manufacturing in China rather than in some U.S. states will become minimal within the next five years.
  • Automation and other measures to improve productivity in China won’t be enough to preserve the country’s cost advantage. Indeed, they will undercut the primary attraction of outsourcing to China—access to low-cost labor.
  • Given rising income levels in China and the rest of developing Asia, demand for goods in the region will increase rapidly. Multinational companies are likely to devote more of their capacity in China to serving the domestic Chinese as well as the larger Asian market, and to bring some production work for the North American market back to the U.S.
  • Manufacturing of some goods will shift from China to nations with lower labor costs, such as Vietnam, Indonesia, and Mexico. But these nations’ ability to absorb the higher-end manufacturing that would otherwise go to China will be limited by inadequate infrastructure, skilled workers, scale, and domestic supply networks, as well as by political and intellectual-property risks. Low worker productivity, corruption, and the risk to personal safety are added concerns in some countries.

This reallocation of global manufacturing is in its very early phases. It will vary dramatically from industry to industry, depending on labor content, transportation costs, China’s competitive strengths, and the strategic needs of individual companies. But we believe that it will become more pronounced over the next five years, especially as companies face decisions about where to add future capacity. While China will remain an important manufacturing platform for Asia and Europe, the U.S. will become increasingly attractive for the production of many goods sold to consumers in North America.

This report, the first in a series, examines the economic trends that point to a U.S. manufacturing renaissance. It also explores the strategic implications of the shifting cost equation for companies engaged in global sourcing.

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FLOTUS, First Daughters wear ‘Made in USA’ designers on Inauguration Day

January 22, 2013 by Leave a comment

First lady Micehlle Obama arrives on the West Front of the Capitol in Washington, Monday, Jan. 21, 2013, for the Presidential Barack Obama’s ceremonial swearing-in ceremony during the 57th Presidential Inauguration. (AP Photo/Win McNamee, Pool)
POSTED: Monday, January 21, 2013, 10:36 AM
Esther Lee, Philly.com

On the Roy G. Biv scale, the Obama family dominated the color spectrum in blues, indigos and violets Monday morning.

First Lady Michelle Obama stunned in a custom-designed, navy Thom Browne jacquard dress and coat, while her daughters dazzled in bright purple ensembles on Inauguration Day.

Thom Browne, a relatively obscure New York-based designer who grew up in Allentown, generated a tremendous amount of buzz within the realm of fashion and beyond after FLOTUS stepped out in his designs Monday. Although Browne, the brother of Pa. State Senator Pat Browne, is recognized largely for his contributions to menswear, the designer launched his womenswear line in 2011. Evidently, the President’s wife wearing his creation on Inauguration Day is a significant step forward in the women’s department for the designer. The two initially met at the Cooper-Hewitt National Design Museum awards in July 2012. Michelle Obama has since worn Thom Browne items to mark other public events.

The designer told the New York Times‘ Eric Wilson, “It’s one of those moments when I just can’t believe that happened.” The Today show’s Savannah Guthrie admitted she did not know who Browne was, although fans of the First Lady’s style will be well-acquainted with him soon.

As for the inspiration behind the outfit? Her coat – specifically the fabric – was created based on a man’s silk tie. Browne, who debuted his menswear line in Paris this weekend, told CNN‘s Alina Cho that he chose dark blue for the First Lady because he was “mindful POTUS might also wear navy.” Largely recognized for his menswear collections, Browne discovered that the First Lady had worn his designs Inauguration Day thirty minutes after viewers first spotted the Obama family at 9 a.m. The Inauguration went down one day after Browne caused fashion ripples in Paris where he debuted his Fall/Winter menswear line.

A fan of preppy American label J.Crew, FLOTUS linked the brand into her ensemble with her belt and shoes as she walked into St. John’s Church for a service earlier that morning. Regarding Obama’s use of the belt layered over the coat, J.Crew creative director Jenna Lyons told WWD, “It looks great. I hope Thom is alright with it.” The source of her lush, leather clover gloves were also a product of J.Crew – in good company with Italian luxury brand Portolano. As of Monday afternoon, the Valentina patent pumps werestill in stock on jcrew.com. The exact pair of gloves were nowhere to be found on the brand’s website, although interested buyers are recommended to scour auction websites like eBay.

She paired the outfit with a necklace by Cathy Waterman, while her cardigan was designed by another American designer – Reed Krakoff – whose creations she selected for Sunday’s swearing-in ceremony. The First Lady later swapped into boots later that morning, which were also designed by Krakoff according to a White House official.

Meanwhile, “Rosebud” Malia also wore an outfit from J.Crew, while her sister Sasha, Secret Service code named “Radiance,” wore a dress and coat from Kate Spade. Deborah Lloyd, creative director of Kate Spade New York told AP, “[Sasha] epitomizes the youthful optimism and colorful spirit of the brand. We are so proud to have been a part of this historic moment.” Lyons shared with Wilson that Malia’s coat was off the rack. Her buttons were customized for the affair. “You can see how the girls have grown up in the four years, and they’re still so alive and vibrant, but more sophisticated,” Lyons shared enthusiastically with the same media outlet.

As for their father, the President stepped outdoors in a blue tie, white shirt and dark suit, beneath the exact same Brooks Brothers overcoat he wore when he took the oath in 2009, WWD reports. Four years ago, the First Lady wore a sparkly yellow coat and dress by Isabel Toledo. Michelle Obama is a champion of consciously and thoughtfully selecting American designers to help raise their profiles.

Known for repeating outfits, she is unable to recycle this gem of a dress and coat. Her complete ensemble, including the accompanying accessories, will go to the National Archives.

Source: http://www.philly.com/philly/blogs/hautehouse_row/FLOTUS-First-Daughters-wear-Made-in-USA-designers-on-Inauguration-Day.html

Made in USA Certified Inc.

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Made in USA makes comeback as a marketing tool

January 22, 2013 by 1 Comment

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Oliver St. John, USA TODAY10:11p.m. EST January 21, 2013

It’s becoming downright American to make stuff in America.

Small manufacturers, craftsmen and retailers are marketing the Made-in-USA tag to score do-gooder points with consumers for employing stateside, says Margarita Mendoza, founder of the Made in America Movement, a lobbying organization for small manufacturers.

It’s working: Over 80% of Americans are willing to pay more for Made-in-USA products, 93% of whom say it’s because they want to keep jobs in the USA, according to a survey released in November by Boston Consulting Group. In ultra-partisan times, it’s one of the few issues both Democrats and Republicans agree on.

When considering similar products made in the U.S. vs. China, the average American is willing to pay up to 60% more for U.S.-made wooden baby toys, 30% more for U.S.-made mobile phones and 19% more for U.S.-made gas ranges, the survey says.

Now Wal-Mart wants a piece of the action. The behemoth, embroiled over the past year with worker protests and foreign bribery investigations, pledged recently to source $50 billion of products in the U.S. over the next 10 years, says Wal-Mart spokesman Randy Hargrove. They’re not alone. Mendoza says both Caterpillar and 3M have also made efforts to source more in the U.S.

“Regardless if this is a PR ploy or not, it doesn’t matter. A lot more people will look for the Made-in-USA tag,” she says, adding that, considering Wal-Mart’s size, $5 billion a year is only “a drop in the bucket,” for the retailer whose 2012 sales reached almost $444 billion.

Kyle Rancourt says his American-made shoe company, Rancourt & Co., hit it big as concern over U.S. jobs mounted when the recession hit in 2009. But he says he lies awake at night worrying if Made-in-USA is just a passing fad.

“It’s inevitable that times will change,” Rancourt says. “But I am still holding out hope that this has become a core value of our country.”

Mendoza says that if buying American turns out to be a passing fad, the country is in trouble.

“If they don’t understand the economic factor, we need to pull on their heartstrings,” she says. “The thought of having a country like China taking over, that alone is bone-chilling.”

But do folks care enough about U.S. manufacturing jobs to permanently change the way they shop? David Aaker, vice chairman of brand consulting firm Prophet, says the companies that get the most credit for being American, such as Apple and Cisco, don’t even source products in the U.S.

“I don’t think it matters unless it becomes visible,” Aaker says. “The most common way for that is if something bad happens, like if Nike gets some press about conditions in factories overseas.”

But Rancourt says his customers believe foreign-made shoes lack the soul of their American counterparts.

“There’s hundreds if not thousands of workers working on those factories. They do one specific job, maybe put an eyelet into a specific place,” he says. “They don’t have an idea or concept of a finished product and how that should look.”

 

Just watch out for phony Made-in-USA claims. It’s illegal to claim a product is U.S.-made unless both the product and all it’s components are sourced in the U.S. Even products that could imply a phony country of origin with a flag or country outline are verboten. Julia Solomon Ensor, enforcement lawyer at the Federal Trade Commission, says the FTC gets “several complaints each month about potentially deceptive ‘Made-in-the-USA’ claims.”

It sets a bad example. Mendoza says the U.S. needs to let kids know it’s OK to work in manufacturing. “Not all children are going to grow up to be dentists, and lawyers, and investment bankers.”

 

 

 

Source:http://www.usatoday.com/story/money/personalfinance/2013/01/21/made-in-usa-trend/1785539/

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Consumer Reports Made in America?

December 31, 2012 by 1 Comment

How to know which flag-waving products are true red, white, and blue

Puzzling labelsLaws allow for patriotic symbols, as long as makers identify where a product was made.

Given a choice between a product made in the U.S. and an identical one made abroad, 78 percent of Americans would rather buy the American product, according to a new nationally representative survey by the Consumer Reports National Research Center.

More than 80 percent of those people cited retaining manufacturing jobs and keeping American manufacturing strong in the global economy as very important reasons for buying American. About 60 percent cited concern about the use of child workers or other cheap labor overseas, or stated that American-made goods were of higher quality.

And people would pay extra to buy American. More than 60 percent of all respondents indicated they’d buy American-made clothes and appliances even if those cost 10 percent more than imported versions; more than 25 percent said they’d pay at least an extra 20 percent. (Perhaps more surprising: According to a new survey of consumers in the U.S. and abroad by the Boston Consulting Group, more than 60 percent of Chinese respondents said they’d buy the American-made version over the Chinese even if it were to cost more.)

Clearly, most Americans want to know where products are made and want to buy those that will help create or keep jobs in the U.S.—an attempt applauded by economists like Jeff Faux, a distinguished fellow of the nonprofit, nonpartisan Economic Policy Institute, in Washington, D.C. “Consumers need to understand that all jobs and wages are interconnected,” Faux told us. “When you buy foreign goods—and sometimes there’s no choice—it means that fewer U.S. workers will have the money to buy the goods and services you sell.”

But what does “made in the USA” even mean? And how can you identify what’s made where?

In this special report, we’ll decipher labeling laws and explain why a product that pictures an American flag might be made abroad, identify companies that still make products in the U.S., hear from economists about manufacturing trends, and provide our experts’ assessment of the quality of some American-made apparel.

A guessing game

Photo by: Tooga

Few products except cars, textiles, furs, and woolens are required by law to reveal their American heritage. But when any manufacturer chooses to boast of an American connection, it must comply with federal rules designed to keep consumers from being misled.

Our evidence shows that if not misled, consumers are at least confused. Readers flood Consumer Reports with letters and e-mail seeking explanations as to why, for example, frozen blueberries from Oregon are identified as a product of Chile; why a company named Florida’s Natural sells apple juice with concentrate from Brazil; why pants made in Vietnam are labeled “authentic, active, outdoor, American”; or why a T-shirt with the words “Made in the” above the U.S. flag comes from Mexico.

Though perplexing, such words and pictures don’t usually violate regulations that are issued by the Federal Trade Commission, the agency responsible for protecting consumers from false or deceptive product claims. The key factors in determining whether a “Made in the USA” claim is deceptive, says FTC senior attorney Laura Koss, are the claim’s context and whether it’s likely to mislead a reasonable consumer. Ultimately, the line between legal and illegal is determined by the overall impression planted in consumers’ minds.

But the line is blurry. Every case is different and subject to interpretation, Koss says. Most of the complaints the FTC receives are initiated by companies that are pointing a finger at competitors they claim are seeking an unfair advantage.

When a company definitely crosses the line, the FTC’s priority is stopping the behavior, not punishment. If a company refuses, it faces civil penalties—in theory. In practice, the FTC has brought only one civil penalty case since the late 1990s, slapping toolmaker Stanley with a $205,000 fine in 2006 to settle charges involving the pedigree of its Zero Degree ratchets. (Stanley claimed that the ratchets were made in America, but the FTC noted that much of their content was foreign.)

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Is Apple Prepping a ‘Made in USA’ Boom?

December 4, 2012 by Leave a comment

It could hinge on whether it picks Intel to make more chips for it

Dec 4, 2012, 9:42 am EST  |  By Brad Moon, InvestorPlace Contributor

Two potentially huge Apple (NASDAQ:APPL) items hit the radar in quick succession over the past few days.

First came rumors that the company was in talks with Intel (NASDAQ:INTC) to replace Samsung as the processor supplier for its mobile devices. Then, as the first shipments of Apple’s new iMac PCs arrived, reports rolled out that at least some of them bore an “Assembled in USA” sticker. CEO Tim Cook rose to prominence at Apple for moving production to China, but could the company be on the verge of a shift back to “Made in America?”

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If Intel manages to score the coup of becoming the chip supplier for Apple’s mobile devices, that would be a big story for both Intel and U.S. manufacturing. It was only weeks ago that Apple was supposedly in talks with Taiwanese chipmaker TSMC(NYSE:TSM) about the possibility of replacing Intel CPUs in its PCs with TSMC chips based on ARM (NASDAQ:ARMH) architecture.

Intel CEO Paul Otellini (the guy who brought Apple into the Intel fold but failed to break into the mobile market) retires, and all of a sudden Apple and Intel appear to be making up for lost time. With most of Intel’s chip fabrication plants in the U.S. (including factories in Oregon, New Mexico and Arizona), domestic manufacturing would benefit tremendously. Apple sold 43 million iOS devices last quarter alone — that’s a lot of chips.

Then there’s the story of the “Assembled in USA” iMacs that’s burning up the tech sites right now. Some (but not all) of Apple’s latest iMacs have been arriving on doorsteps adorned with the usual “Designed by Apple in California” message. But instead of “Assembled in China,” they’re marked “Assembled in USA.”

The FTC has very specific rules about how to qualify for that label. To comply, Apple has to be doing much more than just screwing bases onto cases. A factory somewhere in the U.S. has to be building these things.

How could you justify assembling a computer in the U.S. if you can pay ridiculously low wages in China? First of all, those low wages aren’t as low as they used to be. According to The Atlantic,they’re five times what they were in 2000 and expected to continue rising at the rate of 18% per year. At the same time, U.S. labor productivity has risen, while U.S. manufacturing wages over the past five years are now back at the level they were in 2000, adjusted for inflation.

Earlier this year, The New York Times did the math and calculated that if Foxconn workers were paid equivalent U.S wages, it would add $65 to the cost of an iPhone. On a $649 device (the price of a base iPhone 4S at the time) with an estimated materials cost of $203, this would require Apple to either hike prices or bite the difference, cutting into its margins significantly.

However, an iMac is much more expensive. The cheapest is $1,299, so a potential uptick in labor costs may be less noticeable. And then there’s its size.

To get a sense of what it must cost Apple to ship one of these all the way from China, I tried an experiment using FedEx‘s (NYSE:FDX) shipping calculator to compare the cost of shipping a 1.4-pound box (iPhone) and a 42-pound box (27-inch iMac) from Foxconn in Shenzhen to the FedEx hub in Memphis. The result: $448.732 vs. $2,620.72.

Obviously, Apple isn’t paying anything near the rate Joe Public would, and it also uses other shipping companies. But the point is clear.

Shipping an iMac costs six times what it costs to ship an iPhone. If a worker at Foxconn in China ismaking $2.50 an hour compared to an average U.S. manufacturing wage of $19.15 (a difference of $16.65), so long as an iMac took 3.5 hours or so of labor to assemble, Apple would be breaking even by shifting manufacturing back to the U.S. based on the savings in shipping costs.

That’s all hypothetical. But it shows how plausible it is that under current conditions, Apple might shift production of bigger products from China back home. Plus, Apple was facing limited supply of the new iMacs based on problems at Foxconn, so maybe it’s decided to take matters into its own hands. Perhaps a hit on margins is worth the insurance against a hit on revenue if Foxconn can’t keep up.

It doesn’t hurt that the iMac is a relatively low-volume product (compared to iPads and iPhones) and that Apple already has an assembly facility in Elk Grove, Calif., where it built iMacs until 2004 and once employed 1,500 workers. Apple continues to refurbish iMacs for resale at this site, so it retains some technical and distribution capability. As TechCrunch notes, employment at that facility has jumped 50% this year, suggesting something is up.

While it’s possible that Apple merely messed up on its iMac labeling or that Intel Inside iOS devices is wishful thinking on Intel’s part, it’s also possible that between the company’s flagship PC and its determination to free itself from all vestiges of bitter rival Samsung, Apple is shifting toward “Made in America.” If so, here are a few things to watch for:

  • Without a doubt, Intel shares would surge. The company has been largely shut out of mobile, and gaining Apple’s business — even if it does so under license from ARM — would immediately vault Intel into a market leader. If it inked a mobile deal with Apple, those rumors about Apple seeking to shift its iMacs and MacBooks away from Intel would likely go away as well.
  • Apple’s margins could well take a hit, and even a small decrease could spook investors. Still, computers make up less than a quarter of Apple’s total revenue (and iMacs are a small subset of that), so the actual bottom-line impact of assembling PCs in the U.S. would likely be minimal and may well be offset by “Made in America” goodwill among domestic consumers.
  • Shipping companies could actually take a hit from any loss of Apple business. During the iPad 3 launch, for example, it was reported that Apple’s massive shipments form China (at premium rates) boosted the price DHL charged customers for international shipments by 20%. A steady stream of Apple shipments come from China to the U.S., and the vast majority (if not all) is by air.

At the time of writing, Apple hadn’t officially commented on either the “Assembled in USA” iMacs or the Intel talks. Expect all eyes to be on Cupertino for Cook’s response to both. In the meantime, the search is already on for a way to identify the U.S.-assembled iMacs while still in the box, so that consumers can choose them — and send Apple the message that they prefer to buy American.

As of this writing, Brad Moon from http://www.investorplace.com didn’t own any securities mentioned here.

Made in USA Certified:  www.USA-C.com

Filed under Business, China, Economy, Industry, Insourcing, Internet, Jobs, Julie's Blog, Labor, Made in USA, Manufacturing, News Release, Outsourcing, Political, Power of Consumers, Retail, Science, Small Business, Supply Chain, U.S. Jobs Project, USA-C Tagged with , , , , , , , , , , , , ,

Chinese bid for A123 may raise security risks: Senators

December 2, 2012 by Leave a comment

A123

WASHINGTON (Reuters) – A Chinese company’s attempt to take over government-backed battery maker A123 raises serious national security concerns, a bipartisan group of lawmakers said this week, adding to growing congressional opposition to the deal.

China’s Wanxiang Group Corp is currently competing with U.S.-based Johnson Controls Inc to buy bankrupt A123, which makes lithium ion batteries for electric cars.

The government must ensure that any sale of A123′s technology, which has also been used by the military and to support the U.S. electrical grid, does not threaten domestic security, the senators said in letter to Treasury Secretary Timothy Geithner, Energy Secretary Steven Chu and other top cabinet officials.

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Filed under Aerospace, Automotive, Business, Certifications, China, Currency Manipulation, Defense, Jobs, Labor, Made in USA, Military Tagged with , , , , , , , , , , , , , , ,

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