The Alliance for American Manufacturing (AAM) filed a petition with the Federal Trade Commission on November 12, 2014, asking it to act against Element Electronics over claims that its televisions were “Assembled in USA.”
What AAM alleged
AAM said the TVs arrived at Element’s plants in Fairfield County, South Carolina, and Detroit already packed in China-made boxes. Workers took them out, checked the screens for scratches, used pneumatic screwdrivers to open the back and insert a memory board, ran mechanical tests, and repacked them for sale at retailers including Walmart, The State reported.
AAM said the process did not meet the FTC’s standard for an “Assembled in USA” claim. It also said the back of at least one 19-inch Element TV read “Made in China.”
“If a company wants to wrap itself with the American flag in advertising, it should at least meet the bare minimum standard for manufacturing and assembling products in the USA,” AAM President Scott Paul said.
Element’s response
“We meet or exceed the Assembled in America standard,” Element Vice President Vlad Kazhdan told The State.
What the FTC standard says
Under FTC policy, a product with foreign parts may be called “Assembled in USA” without qualification only if its principal assembly happens in the USA, the assembly is substantial, and the product’s last “substantial transformation” occurs in the USA.
How the FTC review ended
In a closing letter dated May 7, 2015, FTC staff said Element had shown that U.S. Customs would consider certain of its TVs “substantially transformed” in the USA, so an “Assembled in USA” claim likely would not be deceptive for those models. Element still sold other TVs that did not meet that test. It changed its website to make clear that some, not all, of its TVs are assembled in the USA, and FTC staff decided not to pursue the investigation further, noting that the decision was not a finding that no violation had occurred.
Source & credit
Source: The State: “Petition calls Element’s ‘Assembled in U.S.’ claims bogus”, November 12, 2014.
Additional sources: Alliance for American Manufacturing: “AAM Files FTC Petition Against Element Electronics”, November 12, 2014; Federal Trade Commission: closing letter to counsel for Element Electronics, May 7, 2015.