‘Made in the USA’ may not mean what you think

By Dan Nakaso, dnakaso@mercurynews.com

Original article POSTED in San Jose Mercury News:   12/24/2013 04:29:23 PM PST |
Dylan Sievers, CEO of Bulldog LED Lighting, with some his products in Burlingame, Calif., on Wednesday, Dec. 18, 2013. (John Green/Bay Area News Group)

 It seems simple enough: To be labeled as “Made in America,” a product sold in California must include only components manufactured and assembled in this nation.

But that’s a tougher standard than elsewhere in the country, where small amounts of foreign parts don’t invalidate the label. And now it’s touched off a debate among business interests and consumer rights groups, as state lawmakers consider lowering the threshold included in the state’s 52-year-old labeling law.

Richard Russell, chairman of the board of Russell’s Furniture, is opening a new store in San Mateo on Feb. 1 that he originally planned to call “Made in America.”

Labels on boxes of Bulldog LED Lighting products in Burlingame, Calif., on Wednesday, Dec. 18, 2013. (John Green/Bay Area News Group)

But he changed the name to “Russell’s Furniture American Pride/Bringing Jobs Back Home” after his suppliers — including Amish craftspeople from Ohio — could not guarantee that every single component originated in America, which would meet the California standard for labeling a product Made in America.

“We’ve seen plant after plant shuttered and I want to support American manufacturing and bring jobs back to America,” Russell said. “But I don’t want to get sued. It blows me away that I can’t say ‘Made in America.’ It gets me upset.”

The idea of watering down California’s standard bothers Richard Holober, executive director of the Consumer Federation of California, which opposed an earlier draft of the bill that would have allowed products to carry a “Made in America” label if 90 percent of the parts were made and assembled in the United States.

“It’s about truth in advertising,” Holober said. “The California standard is clear and you don’t get into the problem of subjectivity. What’s wrong with being honest? Why is it such a problem to simply say, ’90 percent Made in the USA?’ “

Businesses counter that they’re punished in the marketplace for trying to comply with California’s law because many of their competitors ignore it and label their products American made and sell them in California even when they contain foreign parts.

Nationally, the Federal Trade Commission oversees guidelines that are less restrictive than California’s, saying that a product claiming to be made in the USA “must be all or virtually all” made in America, said Julia Solomon Ensor, an attorney in the enforcement division of the FTC’s bureau of consumer protection.

“On the one hand, of course we think it’s important for companies to promote the good work they’re doing in the USA,” she told this newspaper. “On the other hand, our primary goal is to prevent consumer deception.”

The national standard of “all or virtually all” leaves plenty of wiggle room for interpretation. The FTC will suggest ways for companies to comply, but the decision on what meets the FTC guidelines is left to the nation’s civil courts, just as California civil courts determine whether a product meets the state standard.

In California, it’s against state law to include a “Made in America” or “Made in the USA” label when any part of the product “has been entirely or substantially made outside of the United States.”

That means every single part essentially has to be made and assembled in the United States to carry a “Made in the USA” label in California. But representatives for business say it’s a standard that’s virtually impossible to meet in today’s global market.

A proposed revision of the law, SB 661, would allow goods containing foreign-made parts to be advertised as “Made in America” or similar phrases — as long as the parts cannot be found in the United States and as long as the foreign parts constitute a “negligible part” of the final product.

Circuit boards used in the Bulldog LED lights, in Burlingame, Calif., on Wednesday, Dec. 18, 2013. (John Green/Bay Area News Group)

The law was enacted in 1961 to push back against foreign companies that were employing deceptive “Buy America promotions,” according to a legislative analysis of SB 661, which would amend the law.

The author of SB 661, state Sen. Jerry Hill, D-San Mateo, said his proposed changes would still be the most restrictive in the country.

“You should not be allowed to claim ‘Made in the USA’ if parts are available in the U.S. but you choose not to buy them,” Hill said. “But it will make California businesses as competitive as the rest of the businesses in all of the other 49 states.”

For consumers, Hill said, the new standard would let them know “that every effort was made to manufacture 100 percent in the United States except for just one small part that could not be made here.”

San Carlos-based Bulldog LED Lighting cannot get U.S.-made LEDs for its vehicle lighting systems. So Bulldog buys two separate packaging labels: One simply marked “MADE IN U.S.A.” for the rest of the country and an 11-word version for California that reads, “Made in the USA CA: contains global parts not domestically available.”

The wordier label has not hurt sales in California, which account for about 20 percent of Bulldog’s business, according to Lisa Sievers, Bulldog’s director of operations. Asked why Bulldog doesn’t simply use its California label for the rest of the country, Sievers said it puts her company at an unfair disadvantage against competitors who advertise that their products are “Made in the USA” across the country.

“A few years ago, I believed every word of ‘Made in the USA.’ Now I know differently,” Sievers said. “Now when I see the label, I think, ‘There’s no way. I know for a fact that wasn’t 100 percent made in the USA.’ “

Two separate polls by Harris and Gallup found overwhelming support among U.S. consumers who said they would pay more to buy products labeled “Made in the USA” to support American manufacturing, U.S. jobs and to push back against foreign competition.

But neither poll asked whether respondents understood that products marked “Made in America” actually are allowed to contain foreign parts.

Joel Joseph, founder and chairman of the Los Angeles-based Made in the USA Foundation, insists that savvy shoppers know that something labeled “Made in the USA” probably isn’t 100 percent American made — even in California.

Joseph called California’s current standard “ridiculous” and said it’s being protected by lawyers who see opportunities to take violators to court.

“Because it’s so easy to prove a violation, it’s the lawyers who want it — not the consumers,” Joseph said. “A lot of companies are violating California’s law, which makes it a hot bed for lawsuits.”

SB 661 faces a deadline of midnight Jan. 17 to get out of the Senate Judiciary Committee. If not, it’s dead.

In the meantime, Bulldog moved much of its operations to Texas in July, partly to reduce shipping costs and partly out of anger at California’s resistance to changing the standard. Even though part of its operation is now in Texas, Bulldog still must meet the California labeling standard to sell its lights here.

“We’re fighting to keep American factories in business,” Sievers said. “But we’re also trying to be honest with our labeling in California. Unfortunately, not everyone’s playing on a level playing field.”

Contact Dan Nakaso at 408-271-3648. Follow him at Twitter.com/dannakaso.

* Bulldog Lighting is Made in USA Certified with a qualifying claim.  For information please visit our website: www.USA-C.com

Follow Made in USA Certified on Facebook: https://www.facebook.com/madeinusacertified

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On Twitter: https://twitter.com/madeinusacert  at @MadeinUSACert

Made in USA Claims – How Your Company Can Avoid a “Yankee Doodle Don’t”!

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Does a product that proudly touts a “Made in USA” label or claim influence consumers purchasing decisions?  The answer is a resounding “yes”!   According to a recent research study done by the Boston Consulting Group, more than 80% of U.S. consumers (and over 60% of Chinese consumers) say they are willing to pay more for products labeled “Made in USA”  vs. those labeled “Made in China”.

There is no doubt that the “Made in USA” cache is strong and companies are anxious to capitalize on this uptick in consumer demand.  Now more than ever, we are being flooded with a flurry of “Made in USA” images, logos, claims and statements.

Let us take a look back in time in the early 2000’s when the organic movement was gaining popularity with consumers and there was a growing worldwide demand for organic food.  Organic certification (a third party certification process for producers of organic food & other agricultural products) appeared on the marketplace to assure quality and prevent fraud as well as promote commerce.    As more and more organic products were showing up in supermarkets claiming to be “organic” – consumers needed a third party regulatory certification to give consumers product assurance that they products they were buying were “truly organic”.

Flash forward to 2013 and the Made in USA Movement, consumers can walk down any retail isle of any store and find many different “Made in USA” claims, logos, and images.  A great way to see the array of images is to go to Google Images and type “Made in USA” in the search bar and thousands of images will appear.  Any company can download one of these images and use it for marketing and consumers need to be savvy enough to know that the “Made in USA” claim is a marketing claim that does not need to be pre-approved by any governing regulatory body.

The Federal Trade Commission (FTC) works for consumers to prevent fraudulent, deceptive, and unfair business practices and also provides helpful information to help spot, stop and avoid them.  However, as they state themselves on their website “The Commission does not pre-approve advertising or labeling claims.  A company doesn’t need approval from the Commission before making a Made in USA claim.  As with most other advertising claims, a manufacturers or marketer may make any claim as long as it is truthful and substantiated.”

Recently in the news the FTC settled a “Made in USA” case with E.K. Ekcessories out of Utah.  This is the first FTC “made in the USA” case since 2009.

The FTC asserted that the company falsely claimed certain of its products were “Made in the U.S.A. or “Truly Made in the USA” even though the products contained substantial foreign content.  In the press release found on the FTC website, the FTC alleged that E.K. Ekcessories, Inc. violated the Federal Trade Commission Act by making false and unsupported statements that its products were all or virtually all made in the United States.

According to the FTC, to say an item is “Made in USA”, all or virtually all of it has to be U.S. –made in the U.S.A.  In other words, all significant parts and processing must be of U.S. origin, and the product should contain no – or negligible foreign content.  That’s the standard explained on the FTC’s 1997 Enforcement Policy Statement on U.S. Origin Claims.

With product marketers, big business, foreign countries and even American politicians not always being completely forthright when making manufacturing claims, and no FTC pre-approval  needed, how do consumers know what is truly made in America and how do companies avoid what the FTC’s Lesley Fair put as the “Yankee Doodle Don’t”?

Fairs in her blog suggests, “First, it’s a good time to brush up on how to comply with Made in USA standards.  The Business Center has a dedicated Made in USA page to make that easier for you.  Second, given just how important many consumers take a Made in USA claim, companies that make that statement falsely or without a reasonable basis are risking law enforcement action.”

That is where a company like Made in USA Certified comes in.

Made in USA Certified is the only independent third party certification company in the Nation that conducts a full supply chain audit to verify the percentage of components/ units that are “Made in USA” and that the product was substantially transformed or manufactured in the United States of America.

Co-Founder, Julie Reiser stated.  “Made in USA Certified is here to promote accountability, transparency and verification for companies and consumers within the marketplace with a standardized supply chain audit process and recognizable seals with clear percentages.”

To learn more about Made in USA Certification please visit our website: www.USA-C.com or call 1-561-279-2855 to speak to a representative.

Written By: Julie Reiser is co-founder of Made in USA Certified, the Nation’s leading third party Certification company for “Made in USA” claims.

Website: http://www.USA-C.com
Facebook: https://www.facebook.com/madeinusacertified
Twitter: @madeinusacert @usacertified @MrsMadeinUSA

Olympic Team USA uniforms get Made in USA label

Ralph Lauren can boast Made in the USA label for new Winter Olympic Team USA uniforms

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Associated Press By Samantha Critchell, AP Fashion WriterOctober 29, 2013 9:24 AM

NEW YORK (AP) — Team USA will now wear the Made in the USA label. Every article of clothing made by Ralph Lauren for the U.S. Winter Olympic athletes in Sochi, including their opening and closing ceremony uniforms and their Olympic Village gear, has been made by domestic craftsman and manufacturers.

During the 2012 games in London, it was a flashpoint in the media and among Washington politicians that much of the U.S. apparel was made overseas, especially in China.

Ralph Lauren Corp., which has been making most of the athletes’ clothes since 2008 when it took over from Canadian clothier Roots, got the message.

“We have worked incredibly hard as a company to go across America to find the best partners to help us produce the Olympic uniforms at the highest quality for the best athletes in the world,” said David Lauren, the company’s executive vice president of advertising, marketing and corporate communications.

They used more than 40 vendors, from ranchers in the rural West to yarn spinners in Pennsylvania to sewers in New York’s Garment District for the closing ceremony outfits unveiled Tuesday. The ensemble includes a navy peacoat with a red stripe, a classic ski sweater with a reindeer motif and a hand-sewn American flag, and a tasseled chunky-knit hat.

(Individual clothes for competition are made by different, mostly athletic-gear brands, depending on the sport, technical aspects and sponsorship deals. Those outfits didn’t seem part of the earlier overseas outcry, but some companies, such as The North Face, which is making the freeskiing uniforms, have committed to U.S. manufacturing, too.)

Figure skater Evan Lysacek, who won gold in Vancouver in 2010, said the ceremonial uniforms make the athletes stand a little prouder.

“As an athlete, the clothing means even more than you’d think. The training, the sacrifices, the lifestyle, which is not glamorous and can be grueling and trying at times, all seem to come together in the moment when you realize you are part of the Olympic team,” he said. “The moment you put on those first pieces of the American team clothes, you feel like it’s real.”

Moving production to the U.S., though, was a lesson in the state of American manufacturing. It was hard to come by facilities that could create the quantity and quality needed for the Olympic uniforms and the versions that will be sold to the public, David Lauren said. As a result, there are fewer pieces in the collection for 2014.

During the London flap, he said, “what no one wanted to look at was the true complexity of making Olympic uniforms. We would have done it here if we could, but it was so much more complicated than people realized. Lots of places said they could help us make them, but when we called them, they couldn’t. It was grandstanding by a lot of companies. But we have since found manufacturers, and there are many more out there and we will keep reaching out.”

Jeanne Carver of rural Maupin, Ore., couldn’t quite believe the call that came 18 months ago.

Imperial Stock Ranch, founded in 1871 and now run by Carver and her husband, Dan, was at a make-or-break time, especially for its sheep business. They kept hearing that apparel manufacturing was going offshore and they wouldn’t ship U.S. wool overseas, Carver said. Then the phone rang in the summer of 2012.

“I thought the phone was the tinkling of sheep bells!” Carver said. But it was the product development director for the Ralph Lauren knitwear division. “I literally said to him, ‘You are kidding me!’”

When Robert Cramer told her he was looking for yarn for Team USA sweaters and asked for a tour, “The two things that went through my head were, ‘Oh my god, what will I wear? And what am I going to feed fashion people from New York?!’”

(She went with her “clean” cowboy boots and a menu that included lasagna made with ground beef from the ranch.)

The fact that these were for Olympic uniforms was “icing on the cake.” She was just so appreciative that a big company was paying attention to domestic ranchers and farmers, wool dyers and sewers.

The athletes are happy to see more Americans represented, too, says Lysacek.

“What I hear from the athletes on this topic is that we go out in the Olympic Games and in every competition, we represent the United States of America. I might not know every citizen, but I represent them,” he said. “The more people who are tied into the Olympic story, the closer to home each story hits.”

___

Follow Samantha Critchell and AP Fashion fashion coverage on Twitter at @AP_Fashion or @Sam_Critchell

U.S. Trade Ambassador: L.A. Apparel and Textile Companies Key to Boosting Exports

The Obama administration wants the Los Angeles apparel and textile industry to help the country double its exports by the end of 2014. Deputy U.S. Trade Representative Demetrios Marantis made his first trip to Los Angeles as a member of the Obama administration, visiting key apparel and textile factories on April 2 and then holding a round table with about 30 apparel and textile executives to urge them to take advantage of the various free-trade agreements negotiated by the U.S. government.

“The whole point of my being here is to talk to the industry about how to take advantage of the ‘Made in USA’ label and how do we use our trade agreements to help the industry export,” said Marantis, who was named Deputy U.S. Trade Representative in 2009. He has been active in negotiating the Trans-Pacific Partnership, a regional trade agreement between the United States and eight other countries—Vietnam, Brunei, Malaysia, Australia, Chile, New Zealand, Peru and Singapore.

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