Introduction
The Federal Trade Commission (FTC) is charged with preventing deception and unfairness in the marketplace. The FTC Act gives the Commission the power to bring law enforcement actions against false or misleading claims that a product is of U.S. origin. Traditionally, the Commission has required that a product advertised as Made in USA be “all or virtually all” made in the U.S. After a comprehensive review of Made in USA and other U.S. origin claims in product advertising and labeling, the Commission announced in December 1997 that it would retain the “all or virtually all” standard. The Commission also issued an Enforcement Policy Statement on U.S. Origin Claims to provide guidance to marketers who want to make an unqualified Made in USA claim under the “all or virtually all” standard and those who want to make a qualified Made in USA claim.
This publication provides additional guidance about how to comply with the “all or virtually all” standard. It also offers some general information about the U.S. Customs Service’s requirement that all products of foreign origin imported into the U.S. be marked with the name of the country of origin.
This publication is the Federal Trade Commission staff’s view of the law’s requirements. It is not binding on the Commission. The Enforcement Policy Statement issued by the FTC is at the end of the publication.
Basic Information About Made In USA Claims
Must U.S. content be disclosed on products sold in the U.S.?
U.S. content must be disclosed on automobiles and textile, wool, and fur products. There’s no law that requires most other products sold in the U.S. to be marked or labeled Made in USA or have any other disclosure about their amount of U.S. content. However, manufacturers and marketers who choose to make claims about the amount of U.S. content in their products must comply with the FTC’s Made in USA policy.
What products does the FTC’s Made in USA policy apply to?
The policy applies to all products advertised or sold in the U.S., except for those specifically subject to country-of-origin labeling by other laws. Other countries may have their own country-of-origin marking requirements. As a result, exporters should determine whether the country to which they are exporting imposes such requirements.
What kinds of claims does the Enforcement Policy Statement apply to?
The Enforcement Policy Statement applies to U.S. origin claims that appear on products and labeling, advertising, and other promotional materials. It also applies to all other forms of marketing, including marketing through digital or electronic mechanisms, such as Internet or e-mail.
A Made in USA claim can be express or implied.
Examples of express claims: Made in USA. “Our products are American-made.” “USA.”
In identifying implied claims, the Commission focuses on the overall impression of the advertising, label, or promotional material. Depending on the context, U.S. symbols or geographic references (for example, U.S. flags, outlines of U.S. maps, or references to U.S. locations of headquarters or factories) may convey a claim of U.S. origin either by themselves, or in conjunction with other phrases or images.
Example: A company promotes its product in an ad that features a manager describing the “true American quality” of the work produced at the company’s American factory. Although there is no express representation that the company’s product is made in the U.S., the overall — or net — impression the ad is likely to convey to consumers is that the product is of U.S. origin.
Brand names and trademarks
Ordinarily, the Commission will not consider a manufacturer or marketer’s use of an American brand name or trademark by itself as a U.S. origin claim. Similarly, the Commission is not likely to interpret the mere listing of a company’s U.S. address on a package label in a non-prominent way as a claim of U.S. origin.
Example: A product is manufactured abroad by a well-known U.S. company. The fact that the company is headquartered in the U.S. also is widely known. Company pamphlets for its foreign-made product prominently feature its brand name. Assuming that the brand name does not specifically denote U.S. origin (that is, the brand name is not “Made in America, Inc.”), using the brand name by itself does not constitute a claim of U.S. origin.
Representations about entire product lines
Manufacturers and marketers should not indicate, either expressly or implicitly, that a whole product line is of U.S. origin (“Our products are made in USA”) when only some products in the product line are made in the U.S. according to the “all or virtually all” standard.
Does the FTC pre-approve Made in USA claims?
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 manufacturer or marketer may make any claim as long as it is truthful and substantiated.
The Standard For Unqualified Made In USA Claims
What is the standard for a product to be called Made in USA without qualification?
For a product to be called Made in USA, or claimed to be of domestic origin without qualifications or limits on the claim, the product must be “all or virtually all” made in the U.S. The term “United States,” as referred to in the Enforcement Policy Statement, includes the 50 states, the District of Columbia, and the U.S. territories and possessions.
What does “all or virtually all” mean?
“All or virtually all” means that all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no — or negligible — foreign content.
What substantiation is required for a Made in USA claim?
When a manufacturer or marketer makes an unqualified claim that a product is Made in USA, it should have — and rely on — a “reasonable basis” to support the claim at the time it is made. This means a manufacturer or marketer needs competent and reliable evidence to back up the claim that its product is “all or virtually all” made in the U.S.
What factors does the Commission consider to determine whether a product is “all or virtually all” made in the U.S.?
The product’s final assembly or processing must take place in the U.S. The Commission then considers other factors, including how much of the product’s total manufacturing costs can be assigned to U
.S.
parts and processing, and how far removed any foreign content is from the finished product. In some instances, only a small portion of the total manufacturing costs are attributable to foreign processing, but that processing represents a significant amount of the product’s overall processing. The same could be true for some foreign parts. In these cases, the foreign content (processing or parts) is more than negligible, and, as a result, unqualified claims are inappropriate.
Example: A company produces propane barbecue grills at a plant in Nevada. The product’s major components include the gas valve, burner and aluminum housing, each of which is made in the U.S. The grill’s knobs and tubing are imported from Mexico. An unqualified Made in USA claim is not likely to be deceptive because the knobs and tubing make up a negligible portion of the product’s total manufacturing costs and are insignificant parts of the final product.
Example: A table lamp is assembled in the U.S. from American-made brass, an American-made Tiffany-style lampshade, and an imported base. The base accounts for a small percent of the total cost of making the lamp. An unqualified Made in USA claim is deceptive for two reasons: The base is not far enough removed in the manufacturing process from the finished product to be of little consequence and it is a significant part of the final product.
What items should manufacturers and marketers include in analyzing the percentage of domestic content in a particular product?
Manufacturers and marketers should use the cost of goods sold or inventory costs of finished goods in their analysis. Such costs generally are limited to the total cost of all manufacturing materials, direct manufacturing labor, and manufacturing overhead.
Should manufacturers and marketers rely on information from American suppliers about the amount of domestic content in the parts, components, and other elements they buy and use for their final products?
If given in good faith, manufacturers and marketers can rely on information from suppliers about the domestic content in the parts, components, and other elements they produce. Rather than assume that the input is 100 percent U.S.-made, however, manufacturers and marketers would be wise to ask the supplier for specific information about the percentage of U.S. content before they make a U.S. origin claim.
Example: A company manufactures food processors in its U.S. plant, making most of the parts, including the housing and blade, from U.S. materials. The motor, which constitutes 50 percent of the food processor’s total manufacturing costs, is bought from a U.S. supplier. The food processor manufacturer knows that the motor is assembled in a U.S. factory. Even though most of the parts of the food processor are of U.S. origin, the final assembly is in the U.S., and the motor is assembled in the U.S., the food processor is not considered “all or virtually all” American-made if the motor itself is made of imported parts that constitute a significant percentage of the appliance’s total manufacturing cost. Before claiming the product is Made in USA, this manufacturer should look to its motor supplier for more specific information about the motor’s origin.
Example: On its purchase order, a company states: “Our company requires that suppliers certify the percentage of U.S. content in products supplied to us. If you are unable or unwilling to make such certification, we will not purchase from you.” Appearing under this statement is the sentence, “We certify that our ___ have at least ___% U.S. content,” with space for the supplier to fill in the name of the product and its percentage of U.S. content. The company generally could rely on a certification like this to determine the appropriate country-of-origin designation for its product.
How far back in the manufacturing process should manufacturers and marketers look?
To determine the percentage of U.S. content, manufacturers and marketers should look back far enough in the manufacturing process to be reasonably sure that any significant foreign content has been included in their assessment of foreign costs. Foreign content incorporated early in the manufacturing process often will be less significant to consumers than content that is a direct part of the finished product or the parts or components produced by the immediate supplier.
Example: The steel used to make a single component of a complex product (for example, the steel used in the case of a computer’s floppy drive) is an early input into the computer’s manufacture, and is likely to constitute a very small portion of the final product’s total cost. On the other hand, the steel in a product like a pipe or a wrench is a direct and significant input. Whether the steel in a pipe or wrench is imported would be a significant factor in evaluating whether the finished product is “all or virtually all” made in the U.S.
Are raw materials included in the evaluation of whether a product is “all or virtually all” made in the U.S.?
It depends on how much of the product’s cost the raw materials make up and how far removed from the finished product they are.
Example: If the gold in a gold ring is imported, an unqualified Made in USA claim for the ring is deceptive. That’s because of the significant value the gold is likely to represent relative to the finished product, and because the gold — an integral component — is only one step back from the finished article. By contrast, consider the plastic in the plastic case of a clock radio otherwise made in the U.S. of U.S.-made components. If the plastic case was made from imported petroleum, a Made in USA claim is likely to be appropriate because the petroleum is far enough removed from the finished product, and is an insignificant part of it as well.
Qualified Claims
What is a qualified Made in USA claim?
A qualified Made in USA claim describes the extent, amount or type of a product’s domestic content or processing; it indicates that the product isn’t entirely of domestic origin.
Example: “60% U.S. content.” “Made in USA of U.S. and imported parts.” “Couch assembled in USA from Italian Leather and Mexican Frame.”
When is a qualified Made in USA claim appropriate?
A qualified Made in USA claim is appropriate for products that include U.S. content or processing but don’t meet the criteria for making an unqualified Made in USA claim. Because even qualified claims may imply more domestic content than exists, manufacturers or marketers must exercise care when making these claims. That is, avoid qualified claims unless the product has a significant amount of U.S. content or U.S. processing. A qualified Made in USA claim, like an unqualified claim, must be truthful and substantiated.
Example: An exercise treadmill is assembled in the U.S. The assembly represents significant work and constitutes a “substantial transformation” (a term used by the U.S. Customs Service). All of the treadmill’s major parts, including the motor, frame, and electronic display, are imported. A few of its incidental parts, such as the handle bar covers, the plastic on/off power key, and the treadmill mat, are manufactured in the U.S.
Together, these parts account for approximately three percent of the total cost of all the parts. Because the value of the U.S.-made parts is negligible compared to the value of all the parts, a claim on the treadmill that it is “Made in USA of U.S. and Imported Parts” is deceptive. A claim like “Made in U.S. from Imported Parts” or “Assembled in U.S.A.” would not be deceptive.
U.S. origin claims for specific processes or parts
Claims that a particular manufacturing or other process was performed in the U.S. or that a particular part was manufactured in the U.S. must be truthful, substantiated, and clearly refer to the specific process or part, not to the general manufacture of the product, to avoid implying more U.S. content than exists.
Manufacturers and marketers should be cautious about using general terms, such as “produced,” “created” or “manufactured” in the U.S. Words like these are unlikely to convey a message limited to a particular process. Additional qualification probably is necessary to describe a product that is not “all or virtually all” made in the U.S.
In addition, if a product is of foreign origin (that is, it has been substantially transformed abroad), manufacturers and marketers also should make sure they satisfy Customs’ markings statute and regulations that require such products to be marked with a foreign country of origin. Further, Customs requires the foreign country of origin to be preceded by “Made in,” “Product of,” or words of similar meaning when any city or location that is not the country of origin appears on the product.
Example: A company designs a product in New York City and sends the blueprint to a factory in Finland for manufacturing. It labels the product “Designed in USA — Made in Finland.” Such a specific processing claim would not lead a reasonable consumer to believe that the whole product was made in the U.S. The Customs Service requires the product to be marked “Made in,” or “Product of” Finland since the product is of Finnish origin and the claim refers to the U.S. Examples of other specific processing claims are: “Bound in U.S. — Printed in Turkey.” “Hand carved in U.S. — Wood from Philippines.” “Software written in U.S. — Disk made in India.” “Painted and fired in USA. Blanks made in (foreign country of origin).”
Example: A company advertises its product, which was invented in Seattle and manufactured in Bangladesh, as “Created in USA.” This claim is deceptive because consumers are likely to interpret the term “Created” as Made in USA — an unqualified U.S. origin claim.
Example: A computer imported from Korea is packaged in the U.S. in an American-made corrugated paperboard box containing only domestic materials and domestically produced expanded rigid polystyrene plastic packing. Stating Made in USA on the package would deceive consumers about the origin of the product inside. But the company could legitimately make a qualified claim, such as “Computer Made in Korea — Packaging Made in USA.”
Example: The Acme Camera Company assembles its cameras in the U.S. The camera lenses are manufactured in the U.S., but most of the remaining parts are imported. A magazine ad for the camera is headlined “Beware of Imported Imitations” and states “Other high-end camera makers use imported parts made with cheap foreign labor. But at Acme Camera, we want only the highest quality parts for our cameras and we believe in employing American workers. That’s why we make all of our lenses right here in the U.S.” This ad is likely to convey that more than a specific product part (the lens) is of U.S. origin. The marketer should be prepared to substantiate the broader U.S. origin claim conveyed to consumers viewing the ad.
Comparative Claims
Comparative claims should be truthful and substantiated, and presented in a way that makes the basis for comparison clear (for example, whether the comparison is to another leading brand or to a previous version of the same product). They should truthfully describe the U.S. content of the product and be based on a meaningful difference in U.S. content between the compared products.
Example: An ad for cellular phones states “We use more U.S. content than any other cellular phone manufacturer.” The manufacturer assembles the phones in the U.S. from American and imported components and can substantiate that the difference between the U.S. content of its phones and that of the other manufacturers’ phones is significant. This comparative claim is not deceptive.
Example: A product is advertised as having “twice as much U.S. content as before.” The U.S. content in the product has been increased from 2 percent in the previous version to 4 percent in the current version. This comparative claim is deceptive because the difference between the U.S. content in the current and previous version of the product are insignificant.
Assembled in USA Claims
A product that includes foreign components may be called “Assembled in USA” without qualification when its principal assembly takes place in the U.S. and the assembly is substantial. For the “assembly” claim to be valid, the product’s last “substantial transformation” also should have occurred in the U.S. That’s why a “screwdriver” assembly in the U.S. of foreign components into a final product at the end of the manufacturing process doesn’t usually qualify for the “Assembled in USA” claim.
Example: A lawn mower, composed of all domestic parts except for the cable sheathing, flywheel, wheel rims and air filter (15 to 20 percent foreign content) is assembled in the U.S. An “Assembled in USA” claim is appropriate.
Example: All the major components of a computer, including the motherboard and hard drive, are imported. The computer’s components then are put together in a simple “screwdriver” operation in the U.S., are not substantially transformed under the Customs Standard, and must be marked with a foreign country of origin. An “Assembled in U.S.” claim without further qualification is deceptive.
The FTC and The Customs Service
What is the U.S. Customs Service’s jurisdiction over country-of-origin claims?
The Tariff Act gives Customs and the Secretary of the Treasury the power to administer the requirement that imported goods be marked with a foreign country of origin (for example, “Made in Japan”).
When an imported product incorporates materials and/or processing from more than one country, Customs considers the country of origin to be the last country in which a “substantial transformation” took place. Customs defines “substantial transformation” as a manufacturing process that results in a new and different product with a new name, character, and use that is different from that which existed before the change. Customs makes country-of-origin determinations using the “substantial transformation” test on a case-by-case basis. In some instances, Customs uses a “tariff shift” analysis, comparable to “substantial transformation,” to determine a product’s country of origin.
What is the interaction between the FTC and Customs regarding country-of-origin claims?
Even if Customs determines that an imported product does not need a foreign country-of-origin mark, it is not necessarily permissible to promote that product as Made in USA. The FTC considers additional factors to decide whether a product can be advertised or labeled as Made in USA.
Manufacturers and marketers should check with Customs to see if they need to mark their products with the foreign country of origin. If they don’t, they should look at the FTC’s standard to check if they can properly make a Made in USA claim.
The FTC has jurisdiction over foreign origin claims on products and in packaging that are beyond the disclosures required by Customs (for example, claims that supplement a required foreign origin marking to indicate where additional processing or finishing of a product occurred).
The FTC also has jurisdiction over foreign origin claims in advertising and other promotional materials. Unqualified U.S. origin claims in ads or other promotional materials for products that Customs requires a foreign country-of-origin mark may mislead or confuse consumers about the product’s origin. To avoid misleading consumers, marketers should clearly disclose the foreign manufacture of a product.
Example: A television set assembled in Korea using an American-made picture tube is shipped to the U.S. The Customs Service requires the television set to be marked “Made in Korea” because that’s where the television set was last “substantially transformed.” The company’s World Wide Web page states “Although our televisions are made abroad, they always contain U.S.-made picture tubes.” This statement is not deceptive. However, making the statement “All our picture tubes are made in the USA” — without disclosing the foreign origin of the television’s manufacture — might imply a broader claim (for example, that the television set is largely made in the U.S.) than could be substantiated. That is, if the statement and the entire ad imply that any foreign content or processing is negligible, the advertiser must substantiate that claim or net impression. The advertiser in this scenario would not be able to substantiate the implied Made in USA claim because the product was “substantially transformed” in Korea.
Other Statutes
What are the requirements of other federal statutes relating to country-of-origin determinations?
Textile Fiber Products Identification Act and Wool Products Labeling Act — Require a Made in USA label on most clothing and other textile or wool household products if the final product is manufactured in the U.S. of fabric that is manufactured in the U.S., regardless of where materials earlier in the manufacturing process (for example, the yarn and fiber) came from. Textile products that are imported must be labeled as required by the Customs Service. A textile or wool product partially manufactured in the U.S. and partially manufactured in another country must be labeled to show both foreign and domestic processing.
On a garment with a neck, the country of origin must be disclosed on the front of a label attached to the inside center of the neck — either midway between the shoulder seams or very near another label attached to the inside center of the neck. On a garment without a neck, and on other kinds of textile products, the country of origin must appear on a conspicuous and readily accessible label on the inside or outside of the product.
Catalogs and other mail order promotional materials for textile and wool products, including those disseminated on the Internet, must disclose whether a product is made in the U.S., imported or both.
The Fur Products Labeling Act requires the country of origin of imported furs to be disclosed on all labels and in all advertising. For copies of the Textile, Wool or Fur Rules and Regulations, or the new business education guide on labeling requirements, call the FTC’s Consumer Response Center (202-382-4357). Or visit the FTC online at www.ftc.gov Click on Consumer Protection.
American Automobile Labeling Act
Requires that each automobile manufactured on or after October 1, 1994, for sale in the U.S. bear a label disclosing where the car was assembled, the percentage of equipment that originated in the U.S. and Canada, and the country of origin of the engine and transmission. Any representation that a car marketer makes that is required by the AALA is exempt from the Commission’s policy. When a company makes claims in advertising or promotional materials that go beyond the AALA requirements, it will be held to the Commission’s standard. For more information, call the Consumer Programs Division of the National Highway Traffic Safety Administration (202-366-0846).
Buy American Act — Requires that a product be manufactured in the U.S. of more than 50 percent U.S. parts to be considered Made in USA for government procurement purposes. For more information, review the Buy American Act at 41 U.S.C. §§ 10a-10c, the Federal Acquisition Regulations at 48 C.F.R. Part 25, and the Trade Agreements Act at 19 U.S.C. §§ 2501-2582.
What To Do About Violations
What if I suspect noncompliance with the FTC’s Made in USA standard or other country-of-origin mislabeling?
Information about possible illegal activity helps law enforcement officials target companies whose practices warrant scrutiny. If you suspect noncompliance, contact the Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, DC 20580; (202) 326-2996 or send an e-mail to MUSA@ftc.gov. If you know about import or export fraud, call Customs’ toll-free Commercial Fraud Hotline, 1-800-ITS-FAKE. Examples of fraudulent practices involving imports include removing a required foreign origin label before the product is delivered to the ultimate purchaser (with or without the improper substitution of a Made in USA label) and failing to label a product with a required country of origin.
You also can contact your state Attorney General and your local Better Business Bureau to report a company. Or you can refer your complaint to the National Advertising Division (NAD) of the Council of Better Business Bureaus by calling (212) 754-1320. NAD handles complaints about the truth and accuracy of national advertising. You can reach the Council of Better Business Bureaus on the web at adweb.com/adassoc17.html.
Finally, the Lanham Act gives any person (such as a competitor) who is damaged by a false designation of origin the right to sue the party making the false claim. Consult a lawyer to see if this private right of action is an appropriate course of action for you.
For More Information
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and i
nvestigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
Your Opportunity to Comment
The National Small Business Ombudsman and 10 Regional Fairness Boards collect comments from small businesses about federal compliance and enforcement activities. Each year, the Ombudsman evaluates the conduct of these activities and rates each agency’s responsiveness to small businesses. Small businesses can comment to the Ombudsman without fear of reprisal. To comment, call toll-free 1-888-REGFAIR (1-888-734-3247) or go to www.sba.gov/ombudsman.
December 1998 –
{Made in America Movement Note} Cleary this needs to be updated.
Complying with the Made in USA Standard
in FTC, Made in USA/by MAM Team(Copied in its entirety from the FTC page. Nothing has been edited)
The Federal Trade Commission (FTC) is charged with preventing deception and unfairness in the marketplace. The FTC Act gives the Commission the power to bring law enforcement actions against false or misleading claims that a product is of U.S. origin. Traditionally, the Commission has required that a product advertised as Made in USA be “all or virtually all” made in the U.S. After a comprehensive review of Made in USA and other U.S. origin claims in product advertising and labeling, the Commission announced in December 1997 that it would retain the “all or virtually all” standard. The Commission also issued an Enforcement Policy Statement on U.S. Origin Claims to provide guidance to marketers who want to make an unqualified Made in USA claim under the “all or virtually all” standard and those who want to make a qualified Made in USA claim.
This publication provides additional guidance about how to comply with the “all or virtually all” standard. It also offers some general information about the U.S. Customs Service’s requirement that all products of foreign origin imported into the U.S. be marked with the name of the country of origin.
This publication is the Federal Trade Commission staff’s view of the law’s requirements. It is not binding on the Commission. The Enforcement Policy Statement issued by the FTC is at the end of the publication.
Basic Information About Made In USA Claims
Must U.S. content be disclosed on products sold in the U.S.?
U.S. content must be disclosed on automobiles and textile, wool, and fur products. There’s no law that requires most other products sold in the U.S. to be marked or labeled Made in USA or have any other disclosure about their amount of U.S. content. However, manufacturers and marketers who choose to make claims about the amount of U.S. content in their products must comply with the FTC’s Made in USA policy.
What products does the FTC’s Made in USA policy apply to?
The policy applies to all products advertised or sold in the U.S., except for those specifically subject to country-of-origin labeling by other laws. Other countries may have their own country-of-origin marking requirements. As a result, exporters should determine whether the country to which they are exporting imposes such requirements.
What kinds of claims does the Enforcement Policy Statement apply to?
The Enforcement Policy Statement applies to U.S. origin claims that appear on products and labeling, advertising, and other promotional materials. It also applies to all other forms of marketing, including marketing through digital or electronic mechanisms, such as Internet or e-mail.
A Made in USA claim can be express or implied.
Examples of express claims: Made in USA. “Our products are American-made.” “USA.”
In identifying implied claims, the Commission focuses on the overall impression of the advertising, label, or promotional material. Depending on the context, U.S. symbols or geographic references (for example, U.S. flags, outlines of U.S. maps, or references to U.S. locations of headquarters or factories) may convey a claim of U.S. origin either by themselves, or in conjunction with other phrases or images.
Example: A company promotes its product in an ad that features a manager describing the “true American quality” of the work produced at the company’s American factory. Although there is no express representation that the company’s product is made in the U.S., the overall — or net — impression the ad is likely to convey to consumers is that the product is of U.S. origin.
Brand names and trademarks
Ordinarily, the Commission will not consider a manufacturer or marketer’s use of an American brand name or trademark by itself as a U.S. origin claim. Similarly, the Commission is not likely to interpret the mere listing of a company’s U.S. address on a package label in a non-prominent way as a claim of U.S. origin.
Example: A product is manufactured abroad by a well-known U.S. company. The fact that the company is headquartered in the U.S. also is widely known. Company pamphlets for its foreign-made product prominently feature its brand name. Assuming that the brand name does not specifically denote U.S. origin (that is, the brand name is not “Made in America, Inc.”), using the brand name by itself does not constitute a claim of U.S. origin.
Representations about entire product lines
Manufacturers and marketers should not indicate, either expressly or implicitly, that a whole product line is of U.S. origin (“Our products are made in USA”) when only some products in the product line are made in the U.S. according to the “all or virtually all” standard.
Does the FTC pre-approve Made in USA claims?
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 manufacturer or marketer may make any claim as long as it is truthful and substantiated.
The Standard For Unqualified Made In USA Claims
What is the standard for a product to be called Made in USA without qualification?
For a product to be called Made in USA, or claimed to be of domestic origin without qualifications or limits on the claim, the product must be “all or virtually all” made in the U.S. The term “United States,” as referred to in the Enforcement Policy Statement, includes the 50 states, the District of Columbia, and the U.S. territories and possessions.
What does “all or virtually all” mean?
“All or virtually all” means that all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no — or negligible — foreign content.
What substantiation is required for a Made in USA claim?
When a manufacturer or marketer makes an unqualified claim that a product is Made in USA, it should have — and rely on — a “reasonable basis” to support the claim at the time it is made. This means a manufacturer or marketer needs competent and reliable evidence to back up the claim that its product is “all or virtually all” made in the U.S.
What factors does the Commission consider to determine whether a product is “all or virtually all” made in the U.S.?
The product’s final assembly or processing must take place in the U.S. The Commission then considers other factors, including how much of the product’s total manufacturing costs can be assigned to U
.S.
parts and processing, and how far removed any foreign content is from the finished product. In some instances, only a small portion of the total manufacturing costs are attributable to foreign processing, but that processing represents a significant amount of the product’s overall processing. The same could be true for some foreign parts. In these cases, the foreign content (processing or parts) is more than negligible, and, as a result, unqualified claims are inappropriate.
Example: A company produces propane barbecue grills at a plant in Nevada. The product’s major components include the gas valve, burner and aluminum housing, each of which is made in the U.S. The grill’s knobs and tubing are imported from Mexico. An unqualified Made in USA claim is not likely to be deceptive because the knobs and tubing make up a negligible portion of the product’s total manufacturing costs and are insignificant parts of the final product.
Example: A table lamp is assembled in the U.S. from American-made brass, an American-made Tiffany-style lampshade, and an imported base. The base accounts for a small percent of the total cost of making the lamp. An unqualified Made in USA claim is deceptive for two reasons: The base is not far enough removed in the manufacturing process from the finished product to be of little consequence and it is a significant part of the final product.
What items should manufacturers and marketers include in analyzing the percentage of domestic content in a particular product?
Manufacturers and marketers should use the cost of goods sold or inventory costs of finished goods in their analysis. Such costs generally are limited to the total cost of all manufacturing materials, direct manufacturing labor, and manufacturing overhead.
Should manufacturers and marketers rely on information from American suppliers about the amount of domestic content in the parts, components, and other elements they buy and use for their final products?
If given in good faith, manufacturers and marketers can rely on information from suppliers about the domestic content in the parts, components, and other elements they produce. Rather than assume that the input is 100 percent U.S.-made, however, manufacturers and marketers would be wise to ask the supplier for specific information about the percentage of U.S. content before they make a U.S. origin claim.
Example: A company manufactures food processors in its U.S. plant, making most of the parts, including the housing and blade, from U.S. materials. The motor, which constitutes 50 percent of the food processor’s total manufacturing costs, is bought from a U.S. supplier. The food processor manufacturer knows that the motor is assembled in a U.S. factory. Even though most of the parts of the food processor are of U.S. origin, the final assembly is in the U.S., and the motor is assembled in the U.S., the food processor is not considered “all or virtually all” American-made if the motor itself is made of imported parts that constitute a significant percentage of the appliance’s total manufacturing cost. Before claiming the product is Made in USA, this manufacturer should look to its motor supplier for more specific information about the motor’s origin.
Example: On its purchase order, a company states: “Our company requires that suppliers certify the percentage of U.S. content in products supplied to us. If you are unable or unwilling to make such certification, we will not purchase from you.” Appearing under this statement is the sentence, “We certify that our ___ have at least ___% U.S. content,” with space for the supplier to fill in the name of the product and its percentage of U.S. content. The company generally could rely on a certification like this to determine the appropriate country-of-origin designation for its product.
How far back in the manufacturing process should manufacturers and marketers look?
To determine the percentage of U.S. content, manufacturers and marketers should look back far enough in the manufacturing process to be reasonably sure that any significant foreign content has been included in their assessment of foreign costs. Foreign content incorporated early in the manufacturing process often will be less significant to consumers than content that is a direct part of the finished product or the parts or components produced by the immediate supplier.
Example: The steel used to make a single component of a complex product (for example, the steel used in the case of a computer’s floppy drive) is an early input into the computer’s manufacture, and is likely to constitute a very small portion of the final product’s total cost. On the other hand, the steel in a product like a pipe or a wrench is a direct and significant input. Whether the steel in a pipe or wrench is imported would be a significant factor in evaluating whether the finished product is “all or virtually all” made in the U.S.
Are raw materials included in the evaluation of whether a product is “all or virtually all” made in the U.S.?
It depends on how much of the product’s cost the raw materials make up and how far removed from the finished product they are.
Example: If the gold in a gold ring is imported, an unqualified Made in USA claim for the ring is deceptive. That’s because of the significant value the gold is likely to represent relative to the finished product, and because the gold — an integral component — is only one step back from the finished article. By contrast, consider the plastic in the plastic case of a clock radio otherwise made in the U.S. of U.S.-made components. If the plastic case was made from imported petroleum, a Made in USA claim is likely to be appropriate because the petroleum is far enough removed from the finished product, and is an insignificant part of it as well.
Qualified Claims
What is a qualified Made in USA claim?
A qualified Made in USA claim describes the extent, amount or type of a product’s domestic content or processing; it indicates that the product isn’t entirely of domestic origin.
Example: “60% U.S. content.” “Made in USA of U.S. and imported parts.” “Couch assembled in USA from Italian Leather and Mexican Frame.”
When is a qualified Made in USA claim appropriate?
A qualified Made in USA claim is appropriate for products that include U.S. content or processing but don’t meet the criteria for making an unqualified Made in USA claim. Because even qualified claims may imply more domestic content than exists, manufacturers or marketers must exercise care when making these claims. That is, avoid qualified claims unless the product has a significant amount of U.S. content or U.S. processing. A qualified Made in USA claim, like an unqualified claim, must be truthful and substantiated.
Example: An exercise treadmill is assembled in the U.S. The assembly represents significant work and constitutes a “substantial transformation” (a term used by the U.S. Customs Service). All of the treadmill’s major parts, including the motor, frame, and electronic display, are imported. A few of its incidental parts, such as the handle bar covers, the plastic on/off power key, and the treadmill mat, are manufactured in the U.S.
Together, these parts account for approximately three percent of the total cost of all the parts. Because the value of the U.S.-made parts is negligible compared to the value of all the parts, a claim on the treadmill that it is “Made in USA of U.S. and Imported Parts” is deceptive. A claim like “Made in U.S. from Imported Parts” or “Assembled in U.S.A.” would not be deceptive.
U.S. origin claims for specific processes or parts
Claims that a particular manufacturing or other process was performed in the U.S. or that a particular part was manufactured in the U.S. must be truthful, substantiated, and clearly refer to the specific process or part, not to the general manufacture of the product, to avoid implying more U.S. content than exists.
Manufacturers and marketers should be cautious about using general terms, such as “produced,” “created” or “manufactured” in the U.S. Words like these are unlikely to convey a message limited to a particular process. Additional qualification probably is necessary to describe a product that is not “all or virtually all” made in the U.S.
In addition, if a product is of foreign origin (that is, it has been substantially transformed abroad), manufacturers and marketers also should make sure they satisfy Customs’ markings statute and regulations that require such products to be marked with a foreign country of origin. Further, Customs requires the foreign country of origin to be preceded by “Made in,” “Product of,” or words of similar meaning when any city or location that is not the country of origin appears on the product.
Example: A company designs a product in New York City and sends the blueprint to a factory in Finland for manufacturing. It labels the product “Designed in USA — Made in Finland.” Such a specific processing claim would not lead a reasonable consumer to believe that the whole product was made in the U.S. The Customs Service requires the product to be marked “Made in,” or “Product of” Finland since the product is of Finnish origin and the claim refers to the U.S. Examples of other specific processing claims are: “Bound in U.S. — Printed in Turkey.” “Hand carved in U.S. — Wood from Philippines.” “Software written in U.S. — Disk made in India.” “Painted and fired in USA. Blanks made in (foreign country of origin).”
Example: A company advertises its product, which was invented in Seattle and manufactured in Bangladesh, as “Created in USA.” This claim is deceptive because consumers are likely to interpret the term “Created” as Made in USA — an unqualified U.S. origin claim.
Example: A computer imported from Korea is packaged in the U.S. in an American-made corrugated paperboard box containing only domestic materials and domestically produced expanded rigid polystyrene plastic packing. Stating Made in USA on the package would deceive consumers about the origin of the product inside. But the company could legitimately make a qualified claim, such as “Computer Made in Korea — Packaging Made in USA.”
Example: The Acme Camera Company assembles its cameras in the U.S. The camera lenses are manufactured in the U.S., but most of the remaining parts are imported. A magazine ad for the camera is headlined “Beware of Imported Imitations” and states “Other high-end camera makers use imported parts made with cheap foreign labor. But at Acme Camera, we want only the highest quality parts for our cameras and we believe in employing American workers. That’s why we make all of our lenses right here in the U.S.” This ad is likely to convey that more than a specific product part (the lens) is of U.S. origin. The marketer should be prepared to substantiate the broader U.S. origin claim conveyed to consumers viewing the ad.
Comparative Claims
Comparative claims should be truthful and substantiated, and presented in a way that makes the basis for comparison clear (for example, whether the comparison is to another leading brand or to a previous version of the same product). They should truthfully describe the U.S. content of the product and be based on a meaningful difference in U.S. content between the compared products.
Example: An ad for cellular phones states “We use more U.S. content than any other cellular phone manufacturer.” The manufacturer assembles the phones in the U.S. from American and imported components and can substantiate that the difference between the U.S. content of its phones and that of the other manufacturers’ phones is significant. This comparative claim is not deceptive.
Example: A product is advertised as having “twice as much U.S. content as before.” The U.S. content in the product has been increased from 2 percent in the previous version to 4 percent in the current version. This comparative claim is deceptive because the difference between the U.S. content in the current and previous version of the product are insignificant.
Assembled in USA Claims
A product that includes foreign components may be called “Assembled in USA” without qualification when its principal assembly takes place in the U.S. and the assembly is substantial. For the “assembly” claim to be valid, the product’s last “substantial transformation” also should have occurred in the U.S. That’s why a “screwdriver” assembly in the U.S. of foreign components into a final product at the end of the manufacturing process doesn’t usually qualify for the “Assembled in USA” claim.
Example: A lawn mower, composed of all domestic parts except for the cable sheathing, flywheel, wheel rims and air filter (15 to 20 percent foreign content) is assembled in the U.S. An “Assembled in USA” claim is appropriate.
Example: All the major components of a computer, including the motherboard and hard drive, are imported. The computer’s components then are put together in a simple “screwdriver” operation in the U.S., are not substantially transformed under the Customs Standard, and must be marked with a foreign country of origin. An “Assembled in U.S.” claim without further qualification is deceptive.
The FTC and The Customs Service
What is the U.S. Customs Service’s jurisdiction over country-of-origin claims?
The Tariff Act gives Customs and the Secretary of the Treasury the power to administer the requirement that imported goods be marked with a foreign country of origin (for example, “Made in Japan”).
When an imported product incorporates materials and/or processing from more than one country, Customs considers the country of origin to be the last country in which a “substantial transformation” took place. Customs defines “substantial transformation” as a manufacturing process that results in a new and different product with a new name, character, and use that is different from that which existed before the change. Customs makes country-of-origin determinations using the “substantial transformation” test on a case-by-case basis. In some instances, Customs uses a “tariff shift” analysis, comparable to “substantial transformation,” to determine a product’s country of origin.
What is the interaction between the FTC and Customs regarding country-of-origin claims?
Even if Customs determines that an imported product does not need a foreign country-of-origin mark, it is not necessarily permissible to promote that product as Made in USA. The FTC considers additional factors to decide whether a product can be advertised or labeled as Made in USA.
Manufacturers and marketers should check with Customs to see if they need to mark their products with the foreign country of origin. If they don’t, they should look at the FTC’s standard to check if they can properly make a Made in USA claim.
The FTC has jurisdiction over foreign origin claims on products and in packaging that are beyond the disclosures required by Customs (for example, claims that supplement a required foreign origin marking to indicate where additional processing or finishing of a product occurred).
The FTC also has jurisdiction over foreign origin claims in advertising and other promotional materials. Unqualified U.S. origin claims in ads or other promotional materials for products that Customs requires a foreign country-of-origin mark may mislead or confuse consumers about the product’s origin. To avoid misleading consumers, marketers should clearly disclose the foreign manufacture of a product.
Example: A television set assembled in Korea using an American-made picture tube is shipped to the U.S. The Customs Service requires the television set to be marked “Made in Korea” because that’s where the television set was last “substantially transformed.” The company’s World Wide Web page states “Although our televisions are made abroad, they always contain U.S.-made picture tubes.” This statement is not deceptive. However, making the statement “All our picture tubes are made in the USA” — without disclosing the foreign origin of the television’s manufacture — might imply a broader claim (for example, that the television set is largely made in the U.S.) than could be substantiated. That is, if the statement and the entire ad imply that any foreign content or processing is negligible, the advertiser must substantiate that claim or net impression. The advertiser in this scenario would not be able to substantiate the implied Made in USA claim because the product was “substantially transformed” in Korea.
Other Statutes
What are the requirements of other federal statutes relating to country-of-origin determinations?
Textile Fiber Products Identification Act and Wool Products Labeling Act — Require a Made in USA label on most clothing and other textile or wool household products if the final product is manufactured in the U.S. of fabric that is manufactured in the U.S., regardless of where materials earlier in the manufacturing process (for example, the yarn and fiber) came from. Textile products that are imported must be labeled as required by the Customs Service. A textile or wool product partially manufactured in the U.S. and partially manufactured in another country must be labeled to show both foreign and domestic processing.
On a garment with a neck, the country of origin must be disclosed on the front of a label attached to the inside center of the neck — either midway between the shoulder seams or very near another label attached to the inside center of the neck. On a garment without a neck, and on other kinds of textile products, the country of origin must appear on a conspicuous and readily accessible label on the inside or outside of the product.
Catalogs and other mail order promotional materials for textile and wool products, including those disseminated on the Internet, must disclose whether a product is made in the U.S., imported or both.
The Fur Products Labeling Act requires the country of origin of imported furs to be disclosed on all labels and in all advertising. For copies of the Textile, Wool or Fur Rules and Regulations, or the new business education guide on labeling requirements, call the FTC’s Consumer Response Center (202-382-4357). Or visit the FTC online at www.ftc.gov Click on Consumer Protection.
American Automobile Labeling Act
Requires that each automobile manufactured on or after October 1, 1994, for sale in the U.S. bear a label disclosing where the car was assembled, the percentage of equipment that originated in the U.S. and Canada, and the country of origin of the engine and transmission. Any representation that a car marketer makes that is required by the AALA is exempt from the Commission’s policy. When a company makes claims in advertising or promotional materials that go beyond the AALA requirements, it will be held to the Commission’s standard. For more information, call the Consumer Programs Division of the National Highway Traffic Safety Administration (202-366-0846).
Buy American Act — Requires that a product be manufactured in the U.S. of more than 50 percent U.S. parts to be considered Made in USA for government procurement purposes. For more information, review the Buy American Act at 41 U.S.C. §§ 10a-10c, the Federal Acquisition Regulations at 48 C.F.R. Part 25, and the Trade Agreements Act at 19 U.S.C. §§ 2501-2582.
What To Do About Violations
What if I suspect noncompliance with the FTC’s Made in USA standard or other country-of-origin mislabeling?
Information about possible illegal activity helps law enforcement officials target companies whose practices warrant scrutiny. If you suspect noncompliance, contact the Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, DC 20580; (202) 326-2996 or send an e-mail to MUSA@ftc.gov. If you know about import or export fraud, call Customs’ toll-free Commercial Fraud Hotline, 1-800-ITS-FAKE. Examples of fraudulent practices involving imports include removing a required foreign origin label before the product is delivered to the ultimate purchaser (with or without the improper substitution of a Made in USA label) and failing to label a product with a required country of origin.
You also can contact your state Attorney General and your local Better Business Bureau to report a company. Or you can refer your complaint to the National Advertising Division (NAD) of the Council of Better Business Bureaus by calling (212) 754-1320. NAD handles complaints about the truth and accuracy of national advertising. You can reach the Council of Better Business Bureaus on the web at adweb.com/adassoc17.html.
Finally, the Lanham Act gives any person (such as a competitor) who is damaged by a false designation of origin the right to sue the party making the false claim. Consult a lawyer to see if this private right of action is an appropriate course of action for you.
For More Information
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and i
nvestigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
Your Opportunity to Comment
The National Small Business Ombudsman and 10 Regional Fairness Boards collect comments from small businesses about federal compliance and enforcement activities. Each year, the Ombudsman evaluates the conduct of these activities and rates each agency’s responsiveness to small businesses. Small businesses can comment to the Ombudsman without fear of reprisal. To comment, call toll-free 1-888-REGFAIR (1-888-734-3247) or go to www.sba.gov/ombudsman.
December 1998 –
{Made in America Movement Note} Cleary this needs to be updated.
How America Can Win an Olympic Gold for Its Economy
in Uncategorized/by MAM TeamBy PAUL A. ARGENTI
Professor of corporate communication at the Tuck School of Business at Dartmouth College.
Earlier this year, I gave a presentation in Singapore on country reputations while on sabbatical there. I was shocked to find that the United States ranks 23rd, or three places behind Singapore, and far behind the number one country in the world in terms of reputation, our neighbor to the north, Canada, according to research from the Reputation Institute. Our educational system is rated slightly better at number 17 in the world. And while our infrastructure was the newest and best when I was growing up in the ’50s and ’60s, a return from Singapore’s Changi airport to the United States through JFK airport in New York quickly reminds us how far our star has fallen. And if you travel anywhere in Europe this summer by rail, you will be appalled that all we have to offer is the Amtrak Acela in the Boston to Washington corridor. As HBO’sNewsroom anchor, Will McAvoy, stated in the fictional show’s pilot:
There is absolutely no evidence to support the statement that we’re the greatest country in the world. We’re seventh in literacy, 27th in math, 22nd in science, 49th in life expectancy, 178th in infant mortality, third in median household income, number four in labor force and number four in exports. We lead the world in only three categories: Number of incarcerated citizens per capita, number of adults who believe angels are real, and defense spending (where we spend more than the next 26 countries combined; 25 of whom are allies)…
How did it come to pass that the greatest capitalist nation on earth seems to have lost its mojo? What role can American business play in breaking us out of our torpor? And, what can you do to try to inject some positive energy back into the atmosphere when the heat of summer turns into the crisp, promising chill of early autumn in a few weeks? Warren Buffett took a crack at this a few weeks ago in a CNBC interview:
The U.S. economy is doing better than virtually any big economy around the world. This economy has come back a long way, with the exception of housing, from where it was a few years ago. And you can see it in corporate profits.
That may very well be true, but I don’t think this kind of rhetoric is going to get you away from staring at your computer to start thinking about what you can do for your country anytime soon. So, here is my version of an Olympic heptathlon guaranteed to bring gold back to America’s reputation:
I end my class each year with a quote from my anthropology instructor at Columbia University, Margaret Mead: “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”
Do your part to restore the American dream off the field as well as on by being part of that small group.<br
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Fake Chinese Parts in US-Made Arms Leave India at Risk
in Uncategorized/by MAM Teamby Uttara Choudhury
Defence Minister AK Antony told the Rajya Sabha in a written reply on Wednesday that India was verifying if “faulty spare parts made in China” were used in defence equipment being sold by the US to India.
“There have been media reports in this regard, which are being verified,” Antony said this week.
According to Bloomberg, the US Air Force had in January this year suspended a company called Hong Dark Electronic Trade Co., in Shenzhen (in southern China), from supplying parts to US contractors after it supplied about 84,000 fake components to a middleman, who then sold the suspect electronic parts to Boeing, Lockheed Martin, Raytheon, L-3 Communications, among others.
Bloomberg quoted Air Force Deputy General Counsel Steven Shaw’s memo saying; “Many of the 84,000 electronic parts from Hong Dark have been installed on aircraft such the C-17 transport and helicopters such as the AH-64 Apache and CH-46.”
Given Shaw’s memo, India should double-check what it is paying for when it receives new aircraft. The first of the 10 Boeing C-17 Globemaster III aircraft ordered last year will be delivered to the Indian Air Force in June next year. India is forking over $4.1 billion (Rs 22,960 crore) to buy the US Air Force’s workhorse used extensively in Iraq and Afghanistan, making it the largest defence contract to have been signed by the two governments.
Antony listed some of the other US military equipment India had bought in the last five years. Last year, India purchased an amphibious transport vessel, the USS Trenton (re-christened INS Jalashwa), for nearly $50 million with six-UH-3H helicopters to operate alongside, costing another $49 million.
It also bought Harpoon anti-submarine missiles under a package worth $200 million, and long-range acoustic devices, modern hull penetrating periscopes, side scan sonar, C-130J transport aircraft, sensor-fused weapons, P-8I long range maritime reconnaissance aircraft and quick reaction team boats from the US.
One reason India is beefing up its arsenal is China, which has been expanding its military and modernising its equipment at a tear. This has triggered a simultaneous build-up of advanced weaponry in the Asia-Pacific region on a scale and at a speed not seen since the Cold War arms race between America and the Soviet Union.
India has purchased some $12.7 billion in arms, 80 percent of them from Russia, during 2007-2011, according to the Stockholm International Peace Research Institute (SIPRI). India and the US want to eventually move beyond a seller-buyer relationship to substantial co-production and eventually, high-technology joint research and development of weapons.
Honda’s 2016 Civic Will Be Developed, Built In The U.S.
in Uncategorized/by MAM TeamAugust 9, 2012
The announcement comes on the heels of last month’s news that all U.S.-market 2013 Honda Civics will be made in the U.S.
According to the Detroit Free Press, Erik Berkman, president of Honda R&D Americas said the decision was made last month by global top management, hinting that the next-generation Civic will have some “fairly substantial styling changes” over the existing model.
Berkman said Honda plans to build the next-generation Civic at 14 different plants and sell it in 160 countries worldwide, but said that 55 percent of all global Civic sales currently happen in Canada and the U.S.
Given that U.S. buyers and journalists alike criticized the then-new 2012 Civic for its cheap plastic interior and budget feel, forcing Honda to move forward a planned mid-cycle redesign, basing development of its successor in the U.S. is a smart move.
Development in the U.S. won’t just mean that the 2016 Civic will be more desirable to U.S. buyers either. It will hopefully be cheaper.
With the drive towards ever-more efficient cars and Honda’s ongoing commitment to greener engines, Berkman says the 2016 Civic will be offered with a variety of different powertrains, but gave no specifics on exactly which fuel types would be included.
Interestingly however, Berkman said Honda is considering reintroducing a hatchback Civic to its U.S. lineup.
Last sold in 2005, the hatchback Civic was dropped because of poor sales figures in the U.S. In Europe however, the Civic hatchback outnumbers sales of the Civic sedan by several orders of magnitude.
Of course, the 2016 Honda Civic won’t be the first Honda to be developed and built in the U.S. Earlier this year, Honda announced that its highly-anticipated Acura NSX hybrid supercar would be developed and built in the U.S. too.
But we should also note that it would be unusual for Honda to entrust the entire design and development of its popular C-segment car to designers and engineers outside Japan. We’re not sure if this news means that the U.S. Civic will be unique to the country, or if the entire car and its underlying architecture will be U.S.-developed. Because the 2016 Civic will be a ground-up refresh on an all-new platform, either is possible.
What would you like to see offered on the 2016 Honda CIvic? Which features should Honda include?
Made in China's Getting Expensive
in Uncategorized/by MAM TeamBy MarketWatch
China’s export growth peaked in 2004 at 35.4% year-on-year. Since then, costs for manufacturers have increased across the board.
Average wages have risen more than 150%. Land prices have risen more than 70%. Nate Taplin, China energy analyst at Dragonomics, says electricity prices are up more than 30%. Compounding woes for exporters, the yuan has appreciated more than 30% against the dollar.
Rapid increases in factor prices are bad news. The vast majority of China’s exporters compete on price, with no edge on technology or brand to distinguish them. Improvements in labor productivity–which the World Bank estimates is growing at more than 8% a year–offset some of the impact of rising costs, but not all of it.
Among those feeling the pinch is Hong Kong’s Li & Fung, which has grown rapidly mainly by sourcing Chinese goods for Wal-Mart and other western retailers. The company’s core operating profit fell 22% in the first six months of 2012 compared with the same period last year as lower margins took their toll. Its shares fell 20% Friday.
July’s terrible export data, taken together with decelerating growth in industrial output, and a sharp fall in new loans, makes it virtually certain that China will do more to stimulate growth. Yuan appreciation will stay on hold, and Beijing also has scope to cut interest rates and increase public spending.
There is enough policy firepower to support growth in China’s gross domestic product above the government’s 7.5% target this year. Turning around deteriorating export competitiveness will be a tougher challenge.
Instead of Industrial Giants, Brooklyn Has Niche Factories
in Uncategorized/by MAM TeamPublished: August 7, 2012
Rather, this building, at 1205 Manhattan Avenue, has been sliced and diced into several dozen small factories, each with a niche clientele. One forges exhibits out of wood and metal for the city’s museums. Another makes props and models for advertisers of products like Absolut Vodka to use in their magazine photo spreads. A third restores stained-glass masterpieces for museums like the Cloisters.
This is the face of manufacturing in 2012 Brooklyn. The big industrial behemoths that until the 1960s once made Brooklyn a rival to Chicago’s image as the “stormy, husky brawling City of the Big Shoulders” are mostly gone. Domino sugar, Eberhard Faber pencils, Schaefer beer, Pfizer pharmaceuticals, companies that sold their products across much of the country and sometimes the world, have found locations where wages, taxes and real estate costs are lower, traffic is not as snarled, regulations are not as burdensome, and there is elbow room for the scale required by modern machinery and trailer trucks. Their departures have cost the city thousands of jobs nearly every year for decades.
But in a shift that has been both celebrated and parodied, Brooklyn is increasingly retaining some of its remaining industrial spaces for small-scale, small-batch manufacturing.
A surge of young entrepreneurs eager to produce $7 chocolate bars made from hand-roasted and hand-ground cocoa, or build theater and movie sets or fashion high-end furniture for a connoisseur’s market find the smaller spaces carved out of these old factories precisely what they have been looking for.
Often the rents are affordable and the entrepreneurs can commute to work by bicycle. Such businesses also operate in New York because it has a wealth of the skilled employees they need for idiosyncratic operations that often find their customer bases within the city’s borders.
“We think this is the future of urban manufacturing,” said Brian T. Coleman, chief executive of Greenpoint Manufacturing and Design Center, a nonprofit group that has bought four weathered industrial buildings and converted them into lofts for small factories housing 110 businesses with 500 employees.
“There is a highly skilled work force making products for local consumption,” he said.
Jonathan Bowles, executive director of the Center for an Urban Future, a policy-research institute, said he was optimistic about this “revival of entrepreneurial manufacturing.”
But he noted that these niche enterprises do not employ anything like the thousands of workers the mass producers did; Brooklyn averaged 11.2 workers per business in 2011, compared with an average of 16.8 workers in 2000.
Kay S. Hymowitz, a fellow at the Manhattan Institute, pointed out last year in “How Brooklyn Got Its Groove Back,” that the refashioned Brooklyn Navy Yard rented space to 275 businesses employing 5,800 people, a figure that pales next to the 15,000 the yard employed in 1959.
Still, Mr. Bowles said, while “the overall trend continues to be that manufacturing employment is dropping, it is dropping at a smaller rate in Brooklyn than it has in decades.”
Between 2000 and 2003, Brooklyn hemorrhaged about 11,000 manufacturing jobs, dropping to 32,298 from 43,212, according to New York State Labor Department figures Mr. Bowles cited. But between 2009 and 2011, the drop was far smaller, to 19,445 from 20,650, or just 1,205 jobs.
Marty Markowitz, the Brooklyn borough president, said Brooklyn “is going back to the future.”
“What is emerging is the artisanal approach rather than the mass production for millions of items of something,” he said.
A prime example of the new frontier in Brooklyn factories is Swell, a tenant in the building along Newtown Creek. Swell, a six-year-old company owned by a Japanese-born entrepreneur, Makoto Aoki, has many of the fixings of a factory — a band saw, table saw and drill press.
But with just 1,500 square feet of loft space and two employees, he is not making a mass product for hundreds of thousands of people to use, the way Eberhard Faber did.
If Absolut Vodka wants its orange-flavored vodka sheathed in an orange rind to lure the eye of a magazine reader, Swell will shape such a model for the photographer. When Money magazine wanted a split dollar sign made out of shiny aluminum to grace its July cover story, it turned to Swell.
Swell’s clients are in Midtown and often have tight deadlines that could not be met by a similar operation in, say, Iowa or China. “Most of the jobs I deliver myself,” said Mr. Aoki, 43, as he sat in his office with a view of the Manhattan skyline. “I cannot trust messengers. If there is a delay, they would have to wait for our model to take a picture.”
Being in Brooklyn also gives Mr. Aoki access to artists and craftsmen who do the fine detail work that his company requires. One of his employees is an installation artist whose work has been shown in galleries; another is an industrial designer.
Two floors down from Mr. Aoki is South Side Design and Building, a 12-year-old company with 6 to 10 employees that builds display cases, pedestals and other fixtures for almost 50 medium-sized museums, like the Asia Society and the Jewish Museum; it even built the rostrum and backdrop for the commencement speech that President Obama gave in May at Barnard College.
Most clients are only a cab ride away, allowing them to see whether the work meets their specifications. South Side is also experienced with working around precious objects, like the Modigliani paintings that the Jewish Museum featured in 2004 and the 50 rare medieval manuscripts for the museum’s planned exhibition; South Side will build climate-controlled cases for their display.
“There are 240 museums in New York City and we can respond very quickly,” said Sam Morse, president of South Side. “If you’re shipping stuff all over the world, you probably need to be in Ohio. But certain kinds of products require certain kinds of training and education and you have a more skilled pool of workers in New York than anywhere else.”
In another onetime rope factory in Brooklyn’s gentrifying East Williamsburg, Twosevencreat
es win
dow displays for upscale stores like Louis Vuitton, Saks Fifth Avenue, Cole-Haan and Dolce & Gabbana, fabricating them out of wood, plastic and metals.
“It’s good to be in New York because the designer can come here and look at the prototype and make changes,” said Franco Götte, a Swiss-born artist and woodworker who heads the 11-year-old company.
But he has also run into some of the difficulties of manufacturing in New York. For example, he plans to buy a $7,000 carbon filter for a laser cutting machine that emits fumes a congested city will not tolerate.
Still, Brooklyn is where he wants to be.
“There was a need for people to be able to work with their hands again,” he said. “It was something that had gotten lost.”
Made in The USA is Cool Again
in Uncategorized/by MAM TeamAugust 01, 2012
The message I’m trying to send here is for building contractors to be more selective in their construction material purchases. They should buy American made components where all possible. Wisconsin homeowners and U.S. manufacturers will appreciate it, and our overall economy will benefit from it, I guarantee it.
I’ve noticed that homeowners respond in a very positive way when I tell them I only use American-made gutter covers. When more people are buying American, more jobs will be created, our economy will be stimulated and more taxes paid to our government. Some people argue that American-made products are more expensive, but they are missing the big picture because the money is staying here and not going to another country.
Gutterglove is designed to keep leaves and pine needles out of your roof gutters. With every 1,000 feet I install locally, it keeps a U.S. manufacturing worker employed for one month and infuses $2,500 back into the American economy. The Gutterglove company sells millions of feet a year. That’s a great feeling to have. I’m hoping statistics like these will encourage homeowners to make sure that any home improvements they get done, they will require the contractor to supply American-made components.
If you are a contractor, you can even look for U.S.-made tools for doing your installations.
It has never been a surprise to me, the number of people who ask where Gutterglove is made. I can hold my head up high and tell them it’s manufactured right here in the United States of America!
Then there is the moral issue that other countries illegally use child labor to make U.S. products. It is hard for me to close my eyes to this. America has laws in place to protect our youth from such misuse. Buying American assures me this isn’t happening with Made in USA products.
Matt Steiner is the owner and founder of River’s Rain Gutters in Hartland.
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The Made in America Movement will have a separate “Contractors Section” within the Made in USA products section of the website.
Manufacturing Boom: Trade School Enrollment Soars
in Uncategorized/by MAM TeamJuly 31, 2012
American manufacturers in certain sectors are enjoying a rebirth fueled by the return of overseas production back to the United States. As factories crank up, they have an urgent need for high-skilled workers such as machinists and tool-and-die makers knowledgeable in computers.
Workers are drawn not only by the opportunity but also the pay: Starting salaries of $50,000 to $60,000 are not out of range for high-skilled talent.
But the surge in enrollment is posing unique challenges for schools, many of which are running at or beyond full capacity for the first time in decades.
School administrators are clamoring to hire more instructors and secure funding to buy additional equipment and add classes.
These infrastructure limitations, and the fact that it can take a year or more to train high-skilled factory workers, mean that the current labor shortage could persist for several years.
Unlike 20 years ago, manufacturing today requires workers who are computer literate and skilled in computer-aided design and engineering, said Sandra Krebsbach, executive director of the American Technical Education Association.
Demand through the roof: The Dunwoody College of Technology, a private nonprofit school in Minneapolis, offers two-year programs in tool and die, computer-aided and robotics manufacturing.
Dunwoody will have 120 students across its manufacturing programs this year.
“That’s the highest level of enrollees we’ve had in 15 years,” said E.J. Daigle, the school’s director of robotics and manufacturing.
For the first time in the school’s 99-year history, Dunwoody will this fall introduce a six-month certificate program designed to fast-track training.
The program will allow the school to churn out an additional 40 graduates trained specifically in computer-aided manufacturing, said Daigle.
“Most of these fast-track students are older, in their 30s and 40s, who can’t take two years off to go to school,” he said, adding that these students have the option to return at any time and complete the two-year degree.
Demand for skilled workers has shot through the roof in his area, spurred largely by Minneapolis’ robust medical devices industry led by Medtronic, said Daigle.
“We graduated 20 students in June and we had 400 inquiries about them from manufacturers,” he said.
It’s a similar story in parts of Wyoming, said Ami Erickson, dean of agriculture and technical careers at Northern Wyoming community college in Sheridan and Gillette.
Demand for skilled workers in Wyoming is coming primarily from mining and natural gas companies, she said.
Both industries also have incumbent workers nearing retirement who will need to be replaced, Erickson said.
Starting salaries run as high as $80,000, and possibly more with overtime because of the worker shortage. Not surprisingly, the school’s diesel and welding technology programs have large waiting lists, she said.
Erickson is on the hunt to add instructors in both schools but money is tight. “As a public school, we’re funded by the state. Lately, we’ve had a pullback in funding,” she said.
High-skilled workers are a hot commodity in Georgia as new manufacturers set up base, and existing ones expand operations, said Linda Barrow, vice president of academic affairs at Lanier Technical College, a two-year public school outside Atlanta.
“We expect enrollment in our programs will jump 8% to 15%, said Barrow. But accommodating more students is a challenge. “Our most hands-on classes have at most 20 students each, for adequate training and safety reasons,” she said.
So the school’s come up with a creative solution — “virtual training.”
Barrow said the school recently purchased a “virtual welding trainer” that allows students to learn and practice skills on a screen.
“If a student takes too long on a conventional machine, they can go practice on the virtual trainer,” she said. “This way the whole class isn’t held up and we can also train more students.”
Stylish Geometrics in American Made Dorm's Home Collection
in Uncategorized/by MAM TeamThe Made in America Movement continues to grow, and gather momentum. When consumers seek to furnish their homes, American Made Dorm provides the solution: products that are 100% made in America.
Increasingly, companies are selling their bedding as “American made” when in fact the companies are simply importing the comforter shells pre-made, and then having the bedding “finished” in the USA.
American Made Dorm is proud to take the lead in providing American made bedding and accessories to consumers.
Source: Fibre2Fashion.com
U.S. Slaps Tariffs on Washing Machine Imports
in Uncategorized/by MAM Team07/30/12
Daewoo received an 82 percent duty for its Korean-produced washers, while LG and Samsung were hit with tariffs of 12.2 percent and 9.6 percent respectively.
Samsung and Whirlpool subsidiaries in Mexico were also given 72 percent duties.
In all, South Korea and Mexico combined to produce around $1 billion worth of large residential washing machines that were exported to the U.S. – $434 million from Mexico, and $569 million from Korea.
Whirlpool had complained last year that rival manufacturers were selling washers below market value in the U.S., and receiving subisidies from their home countries.
In a Monday statement, a Whirlpool spokeswoman said that the Michigan-based manufacturer felt vindicated by the Commerce Department decision.
“Whirlpool is committed to building products in the regions where they are sold and investing in our U.S. manufacturing presence,” said the spokeswoman, Kristine Vernier. “Our investments will continue as long as we can compete on a level playing field, with all of our foreign competitors playing by the established rules.”
Whirlpool also said that it had stopped shipping washing machines from Mexico to the U.S., and expects to make close to 100 percent of the large washers it sells in the U.S. in 2013 in Ohio.
Samsung also said that it had stopped producing washers in Mexico, and said that the government’s decision was based on a faulty methodology.
“Samsung strongly disagrees with this finding, and it is confident that once the final phase of the investigation is completed, the Department of Commerce will determine that Samsung has not engaged in dumping and is in compliance with U.S. trade laws,” a company spokesperson said in a statement.
The federal government is expected to make its final decision in the case in December.