Thursday, January 21, 2016

Why `Made in America' isn't clockwork -- Jan. 21, 2016 column


A lot is being made of being made in America.  

Republican presidential contender Donald J. Trump plays Bruce Springsteen’s “Born in the U.S.A.” at his rallies, needling rival Ted Cruz, who was born in Canada to an American mother and Cuban father.

Not to be outdone, Cruz, at the last GOP candidates’ debate, countered that some extreme birthers claim that for a person to be a natural-born citizen, both parents must also be native born. Trump’s mother was born in Scotland, so he would be disqualified.

“But I was born here,” Trump protested.

That’s politics, but anyone who’s tried to buy products made in America knows the frustration of the hunt.

Trump feels our pain.

“We want to buy USA, right?” the billionaire  businessman said Monday at Liberty University in Lynchburg, Va. Trump vowed that, as president, he’ll bring big-name manufacturing back to the United States.

“We’re gonna get Apple to start building their damn computers in this country, instead of in other countries,” he said.

Really? Trump doesn’t say how he will bring Apple back or whether he’s concerned that the cost of the iPhone and other gadgets could skyrocket if made here.  

Five years ago, Barack Obama asked Apple CEO and co-founder Steve Jobs why Apple couldn’t build the iPhone here, to which Jobs replied, according to a New York Times report, “Those jobs aren’t coming back.”

Current Apple CEO Tim Cook, asked by NBC Nightly News in 2011 why Apple couldn’t be a Made in America company, said that while many Apple components are made here, America has lost the skills associated with manufacturing.

We forget that in the early 2000s almost all Apple products were American-made. In today’s increasingly global economy, they’re designed in the USA but most are made in China.

Being Made in USA is not a random act of patriotism; it’s a hard-nosed business decision. Companies know we want to buy American, and they encourage our goodwill by plastering their ads with American flags, maps and slogans.

The question arises: How much of a product must actually be American-made to carry the Made in America label?

The Federal Trade Commission, which protects the Made in America name, says that if a company claims a product is Made in USA, “all or virtually all” its parts or components need to be made here.

“The product should contain no – or negligible – foreign content,” the FTC says.

But what’s virtually all and what’s negligible? The FTC hasn’t set specific percentages.

Final assembly or processing must take place in the United States, then other factors come into play, including total manufacturing costs and how significant foreign content is to the final product, FTC says.

It’s not, in other words, clockwork.

In Detroit Wednesday, Obama, wearing his own Shinola watch, toured the Shinola plant, which touts its luxury watches as “Built in Detroit.” The company says its watches and bicycles are “100 percent assembled” in Detroit but, the Detroit Free Press reported, about one-third of its watch movements come from Thailand.

“Shinola’s goal is to build products that are predominantly American manufactured,” Shinola says on its website, which details country sources of various parts.  

The FTC has put watchmakers, among other manufacturers, on notice about Made in America claims. After an inquiry from the FTC, Niall Luxury in Kansas City agreed in November to revise marketing materials to reflect the use of Swiss movements.

If the standards aren’t confusing enough for manufacturers and consumers, California sets its own Made in America standard, previously requiring 100 percent domestic content.

Under a loosened state law, as of Jan. 1, Made in USA in California means foreign components are no more than 5 percent of final wholesale value or 10 percent if the manufacturer can show the components cannot be obtained or produced domestically.

Some in Congress are moving to lessen confusion. The Senate Commerce Committee passed a bill in November that makes the federal government – through the FTC -- solely responsible for developing and enforcing standards.

The measure will allow products to carry the Made in USA label “even if a small piece, such as a screw or shoe lace, is sourced from a foreign country,” said Sen. Susan Collins, Republican of Maine, a sponsor of the bill.

The idea is to encourage companies to stay here. We all want to see more jobs made in America.

©2016 Marsha Mercer. All rights reserved.

No comments:

Post a Comment