RPM Sept-Oct 2019

22 O n March 22, 2019, Truth In Advertising (TINA), a non- profit consumer watchdog organization dedicated to combatting false advertising and deceptive marketing, sent a letter to Mercedes- Benz, calling out the German automaker for dishonestly claiming its Sprinter van was being built in America. In actuality, only about 10% of the finished product was being constructed in the company’s new South Carolina plant, with the rest being assembled in Germany. As a result of TINA’s complaint, Mercedes pulled the advertising, and instead, pivoted its campaign to showcase the local job creation generated by the new $500 million facility. This encounter between TINA and Mercedes illustrates an important fact: Those three little words—Made in America—carry a lot of weight. People believe in them. They trust in them. So much so, that they are willing to invest in them. Star-Spangled Heart For decades, the prevalence of American manufacturing has been declining, mostly due to outsourcing, a lack of skilled labor, and the slow uptick of automation. However, recently there has been a noticeable rise in both demand and support for homegrown goods, with many manufacturers returning to American soil, while those who stayed receive outspoken praise for weathering the recessive storm. But why does it matter that a product be made in the USA? What makes American manufacturing so desirable that consumers actively seek it—and some companies go so far as to fake it? Ironically, several of the forces currently threatening U.S. manufacturing are the same ones that have shaped it into a golden standard. Yes, regulatory burdens consistently bite into profits, as manufacturers spend time, money, and manpower implementing new rules. But it is largely thanks to federallymandated safety protocols and quality assurances that American factories are among the safest in the world, producing some of the safest goods. Similarly, as expensive new technologies threaten not only individual jobs but also entire markets, many innovations increase productivity, thereby increasing output and, ultimately, sales. Furthermore, although a 2018 Deloitte Institute report indicates that 83 percent of executives are offering higher pay to attract and/or retain skilled workers—a 15 percent increase from 2015—American tradespeople are earning more for their craft than ever before, showing a younger labor force that there is a future in manufacturing. Simply put: A product Made in the USA tells a consumer, “This was built of safe materials, on modern equipment, by skilled hands that were paid a decent, living wage. You can feel good about using this product.” With that kind of powerful, built-in endorsement, is it any wonder that some manufacturers feel inclined to bend—or even break—the rules? Race Around the World According to TINA, “You could stock a small store with the products that have been accused of being deceptively marketed as made in the USA in recent years.” In fact, the organization is currently tracking 30 class action lawsuits challenging aMade in America claim, with such high profile defendants as Walmart, Kraft, Heinz Foods, Land’s End, and New Balance. Part of the issue surrounding the darker side of Made in the USA claims lies in the Federal Trade Commission’s surprisingly vague definition of what constitutes a domestic product, namely, that it be “all or virtually all” made in the United States. However, there are admittedly stronger forces at play, too. Ones that are reshaping the very fabric of American manufacturing—and chief among them is modern globalization. In a nutshell: “Buying American” isn’t as clearly defined today as it was in the past. Materials, labor, and design are global endeavors now, aimed at keeping production costs low and profit margins high. Today, a car assembled in Atlanta may wear parts manufactured inMexico, while another is built in Canada for a European badge using American-made parts. Granted, those logistics costs are changing as more manufacturers shorten their supply chains and invest in domestic production, warehousing, and distribution, but it is still very plausible that a product sitting in your home has traveled more miles in its lifetime than you ever will in yours. What Does it Mean to in 2019?