“Made in the USA” is a hot pursuit for manufacturing CEOs these days, as more American companies decide on domestic production and many also look for opportunities to “onshore” output that previously was done abroad. By 2015, the Boston Consulting Group predicts that cost advantages over parts of Asia and Europe will drive more companies back to the U.S. generating as many as 5 million manufacturing jobs by the end of the decade.
But federal labeling regulations make it difficult for some manufacturers to leverage domestic production into crucial marketing claims. Putting a crimp in “Made in America” marketing is Federal Trade Commission guidelines that say an unqualified “Made in USA” label can go on goods that are “all or virtually all” made domestically. Yet according to The Wall Street Journal, the agency doesn’t define what “virtually” means. And in California, if even one fastener in a product is foreign, state law says it’s false advertising to call it U.S.-made.
This has created a venue for consumer lawsuits against manufacturers in which people complain that “Made-in-America” labeling is deceptive. It’s also really difficult for manufacturers, even those who are very dedicated to manufacturing everything here, not to rely on some foreign bolt or rivet or flange somewhere, given how interconnected the global economy has become and the fact that there are just some things that aren’t made in America anymore.
For CEOs, this can be a difficult quandary, because continued uncertainty over the FTC regs, as well as a passel of consumer lawsuits against companies making a “made in USA claim,” still make a pathway through the thicket difficult to see. The one reliable strategy may be that pursued by New Balance, the iconic U.S. sneaker maker that claims “made in the USA” on its labels even though only about 70% of its shoes reflects domestic content and labor. New Balance’s solution: thoroughly explaining the percentage on its tags.