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Made in America – Consumer Reports

Made in America – Consumer Reports.

SPECIAL REPORT

Made in America

 

Most Americans love the idea of buying a U.S.-made product instead of an import. But sometimes it’s hard to tell what’s real and what’s not.

Published: May 21, 2015 06:00 AM

Almost 8 in 10 American consumers say they would rather buy an American-made product than an imported one, according to a recent Consumer Reports survey. And more than 60 percent say they’re even willing to pay 10 percent more for it. For some, the decision might stem from a belief in American quality and safety. Others might think it’s the best way to support the American economy and workers. But in our increasingly complex global economy, how much meaning does a label stating “Made in America” still hold? (Get more details from our nationally representative survey by clicking on the image a right.)

Some iconic American products, from the Apple iPhone to Cuisinart food processors, have little or no manufacturing presence on these shores, while many foreign makers have invested heavily in manufacturing plants in the U.S. The auto industry has long grappled with what it means to be made in America. But now, because of a wave of “reshoring,” many appliance manufacturers and other companies are moving significant operations back to the USA. Since 2010, about 300 companies have returned here, according to the Reshoring Initiative, an industry-supported not-for-profit that focuses on bringing manufacturing jobs back.

And yet the perception persists that American manufacturing is in decline. It’s fueled by the fact that very few products sold in the U.S. in certain high-profile categories, such as consumer electronics and clothing, are actually produced here. But the Department of Commerce reports that between 2009 and the end of 2014 , U.S. manufacturing output grew by 45 percent, 646,000 jobs were added between February 2010 and May 2014, and another 243,000 positions are waiting to be filled. (Even so, such growth hasn’t made up fully for losses during the 2008-2009 recession.)

Two reasons cited for a resurgence of American manufacturing in recent years are newly cheap energy and the narrowing gap in labor costs between the U.S. and other countries. But it’s not just about costs. A third factor is increased investment in research and development.

Some analysts say that the frontier in innovation lies in “brainfacturing.” It’s a term that describes a new wave of manufacturing focused on research in digital technologies, automation, and new materials. In certain industries, such as software, American companies are so dominant that other countries are enacting legislation to encourage development of their own products in order to lessen their reliance on U.S. technology.

No matter how you define a “Made in America” label, though, it has selling power, and many marketing departments are rushing to capitalize on it. But consumers often don’t know whether they can trust the claim. The Federal Trade Commission has issued standards for products that bear a “Made in the USA” label, but those guidelines aren’t widely understood. And the claim gets even more confusing when compared with products that say “assembled” or “designed” in America. Adding to the cacophony, there is plenty of outright deception by companies that slap Americana on their products, in hopes they’ll be able to cash in on public sentiment before getting found out as a fraud.

In an effort to capture the wide range of voices on this nuanced topic, we asked 13 leaders to weigh in. We also provide a guide to some of the highest-rated products—ones that live up to the “Made in America” promise.

Who gets to use the ‘Made in America’ tag?

Renewed pride in American manufacturing has made it more fashionable—and profitable—for companies to wax patriotic in their advertising, even when the claims are far from bona fide. “We see many goods which say ‘Made in the USA,’ but they’re actually made in China,” says Hal Sirkin, a senior partner at The Boston Consulting Group, global-management consultants.

The federal government’s “Made in USA” standards empower the Federal Trade Commission to take action against companies that make false or misleading claims.

All or almost all of a product bearing the label must be of U.S. origin, i.e., it should contain no foreign content (or a negligible amount) and its final assembly or processing must take place within the 50 states, the District of Columbia, or U.S. territories and possessions.

But the standards also allow manufacturers to make “qualified” claims for products that aren’t entirely of domestic origin. One example: a GE refrigerator with 87 percent U.S. content.

Why fakes sneak through

The role of the FTC is to provide guidance to companies that want to use the label; it doesn’t police every product on the market. “It’s often a question of context,” says Julia Solomon Ensor, a lawyer for the agency. “A product may convey that it’s made in the USA, with a huge American flag on the package, but then there will be a tiny qualifier saying it consists of 100 percent imported parts.”

The FTC would certainly challenge that kind of claim, but only after receiving a formal complaint from an outside party. “Most complaints come from competing companies, who can best determine if a product is truly made in the U.S.,” Ensor says. “It’s very difficult for the typical consumer to know if a claim is true or not.”

It doesn’t help that the FTC standards allow companies to design their own labels, unlike the federal Energy Star program, for example, with its distinctive blue label that’s a recognized mark of energy efficiency. ‘Made in the USA’ labels, by comparison, take many forms, as the examples below show.

Paradoxically, plenty of products that really are manufactured domestically don’t carry a ‘Made in America’ label. For example, many Kenmore appliances are produced in the U.S., but you won’t see any patriotic labeling on them because Kenmore also has contracts with foreign manufacturers.

How to recognize imports

Given the vagaries of “Made in the USA” labeling, another strategy is to look for a “Country of Origin” mark, which Customs and Border Protection require on all imported products. It must be in a conspicuous place where it can be seen with casual handling, so you should be able to find it easily while shopping in a store. With refrigerators, for example, the country of origin is on the manufacturing sticker usually found on an interior wall. With gas grills, the sticker can be found on the back of the metal frame or cart. (Bear in mind that the marking isn’t required on American-made products.)

We’ve mined our current Ratings in a dozen product categories for recommended models that were made in the USA out of mostly U.S.-supplied parts, even if their manufacturers don’t advertise the fact. See our list.

If you come across a claim that seems bogus, file a complaint at ftc.gov or call 877-FTC-HELP. An investigation will probably take a while, and the FTC won’t respond to you directly, so playing the vigilante role won’t help with your immediate purchase. But you’ll be doing your part to uphold the integrity of the “Made in the USA” claim.

Just how American are these iconic brands?

Photo: Trey Wright

 

Company

Key facts

GE Appliances (Louisville, Ky.) Since 2009, GE has invested $1 billion to bring some of its manufacturing home to the U.S., with most of the investment going to Appliance Park, a 900-acre facility in Louisville. That’s led to 3,000 new manufacturing jobs. GE’s qualified “Made in America” label tells how much U.S. content is in each appliance. For example, the company says its bottom-freezer refrigerators comprise 87 percent domestic parts.
Whirlpool (Benton Harbor, Mich.) It’s the world’s largest appliance manufacturer; its brands include Amana, Jenn-Air, KitchenAid, and Maytag. It’s also the leading producer of U.S. appliance factory jobs with eight factories nationwide employing 15,000 workers. About 80 percent of Whirlpool appliances sold in the U.S. are made here. Some foreign components are used, but Whirlpool’s label doesn’t indicate how much.
Frigidaire (Stockholm, Sweden) Frigidaire, whose label says “Built with American pride,” was founded in Fort Wayne, Ind., in 1916. It remained a U.S.-owned company until 1986, when it was purchased by the Swedish multinational Electrolux (which is also in the process of acquiring GE Appliances). Electrolux has been moving its manufacturing to Asia, Latin America, and other low-cost areas, but Frigidaire still maintains five plants in the U.S., including one in Memphis, Tenn., that opened in late 2013.
Apple (Cupertino, Calif.) Although a few Apple products are American-made, including the Mac Pro computer manufactured in Austin, Texas, the bulk of its manufacturing happens in China. Hence the “Designed by Apple in California” label shown above. Apple claims that its innovation has produced more than 1 million U.S. jobs. But only 66,000 are actual Apple employees, including 30,000 retail workers.
Ariens (Brillion, Wis.) Although many of its engines are imported, Ariens, which boasts of “American craftsmanship,” employs more than 1,000 American workers in three factories to produce outdoor power equipment. Another 400 U.S. workers design, test, sell and support its products and customers.
Troy-Bilt (Valley City, Ohio)  Troy-Bilt’s label, which says “Rooted in America,” plays up its agrarian origins. In 1937, it revolutionized the rototiller, which is still a signature product, along with lawn mowers, leaf blowers, and other outdoor power equipment. It was bought by MTD, a Cleveland-based manufacturer, in 2001. Its five U.S. factories use a combination of domestic and foreign parts.
 Thanks to the Alliance of American Manufacturing who highlighted this Consumers Reports special edition.
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