Legislation seeks to tweak standards for ‘Made in USA’

by Sally Schilling, San Mateo Daily Journal

Most Americans probably don’t think twice when they read a label that says, ‘Made in the USA’ They assume the product is made domestically. What they don’t realize is that the meaning of ‘Made in the USA’ is up for debate.

In almost all states, an item can be labeled as ‘Made in the USA’ and still be made with a portion of foreign labor or foreign material.

In California, on the other hand, there is no leeway for products labeled ‘Made in the USA.’ Manufacturers who want to label their goods as ‘Made in the USA’ in California must use only American labor and American material. For 19-year-old Dylan Sievers, CEO of Bulldog Lighting based in San Carlos, this proved to be a problem.

At age 17, Dylan started Bulldog Lighting ‘ which makes LED lights for off-roading vehicles ‘ in a business enterprise class at Junipero Serra High School in San Mateo. The young off-roading enthusiast discovered there was a lack of affordable lighting available for people wanting to race their trucks through dark terrain. He asked his mom if she could use her own background in manufacturing to help him figure out how to make the lights.

‘He asked if I could find a factory that could help make LED lights that were affordable,’ said Dylan’s mother, Lisa Sievers, who previously worked for Cool Balls manufacturing antenna balls. ‘We found a factory in China.’

Bulldog Lighting debuted its products last year, and Dylan decided to bring all production stateside.

‘He was sitting in class hearing about people losing their jobs,’ said Sievers. ‘We decided we could make it here in the USA’

The Sievers were hoping to label their product as ‘Made in the USA,’ and were disappointed when they found out they could not make that claim. Despite their best efforts to produce the lights in the United States, there were some materials in the lights that Sievers said had to come from foreign countries.

‘There’s just some things in the United States we don’t make,’ she said. ‘We don’t make LED here.’

Bulldog’s lights are about 90 percent made in the United States, said Sievers.

‘I don’t think it’s reasonable to say everything can be made in the USA,’ she said.

The aluminum in the lights is from Texas, and the screws are made in Ohio, she said.

‘[The product] is substantially transformed using American workforce,’ she said. ‘Dylan said, ‘if we do everything here, how come we can’t say ‘Made in the USA”’?

The Sievers are considering moving to Texas, where their products could be sold with a ‘Made in the USA’ label.

Proposed state legislation

The Sievers contacted state Sen. Jerry Hill, D-San Mateo, who wrote legislation to address the issue.

‘If you want to be competitive and keep jobs in California, we need to do everything we can,’ said Hill.

Hill has since introduced Senate Bill 661 to ‘update’ California’s labeling standard to reflect the realities of today’s global economy.

SB 661 would reduce the ‘Made in the USA’ standard to allow for 90 percent of the product to be made in the United States. In this case, the manufacturer would have to prove that the remaining 10 percent of production was unavailable domestically.

‘This still gives us the integrity of the claim,’ said Hill.

According to Hill’s office, the original standard in California was established in 1961 to ‘prevent foreign firms from taking advantage of ‘buy American’ promotions.’

This standard is unrealistic in today’s global economy where not all materials are available locally, said Hill.

He gave the example of Star Milling Company in Perris, Calif., which produces feed that is 99 percent made in the United States. Just one vitamin in the feed is unavailable domestically, he said.

He hopes bringing California standards closer more in line with federal standards will allow companies within the state to remain competitive.

‘The final transformation has to be done domestically,’ said Hill of his bill’s requirements. ‘We’re meeting every standard that can be made.’

False advertising?

Some consumer advocates are opposed to changing California’s labeling standard because they say it would be false advertising.

‘This is a truth in labeling issue,’ said Richard Holober, executive director of Consumer Federation of California. ‘We do not support changing the current standard. If something is 90 percent made in the U.S., it should say ’90 percent made in the U.S.”

Aside from a few sectors such as the automobile industry, there is no legal requirement for companies to disclose the origins of its products. Labeling should not be such a big issue because it is a choice, said Holober.

Changing California’s standard would hurt companies who are 100 percent American-made, he said.

‘If there is a union company that pays better wages and is 100 percent [Made in USA.], they’ll say, ‘wait a second, why shouldn’t be able to gain a tiny edge here”? he said.

Some unions are also coming out against the bill.

‘If you’re going to advertise your product as ‘Made in the U.S.,’ then it should be made in the U.S.,’ said Shane Gusman, who represents the Teamsters Union and the Machinists Union. ‘Why would we want to loosen the standard so that ‘Company X’ can import 10 percent of its components from somewhere’?

The whole idea behind the label is to get consumers who want to be patriotic to buy that product, said Gusman. Taking away California’s high standard would reduce the demand for domestic manufacturing jobs, he said.

Lisa Sievers will be testifying in before the Senate Judiciary Committee on SB 661 on Tuesday.