New Balance shoes and the made in USA controversy
The New Balance athletic shoes organization is one of the major manufacturers in the running shoe as well as sneaker industry. Just like all their competition, almost all of their footwear is made in various Asian countries for price motives. However, they are different in the market because they do manage some production facilities in the United States, so some New Balance shoes do have the ‘made in the US' label. This really is however, marked by controversy in that lots of the parts utilized in these shoes that happen to be produced in the United States have pieces, for example the sole units, which are manufactured in Asia. It really has brought up questions as to if New Balance are being honest in making the assertion that their shoes are ‘made in the US'.
The Federal Trade Commission in the USA (FTC) guidelines state that if marketers and producers choose to promote their products for being ‘Made in US' they must satisfy the Federal Trade Commission criteria of “all or virtually all” being manufactured in the United States. To meet this criteria, the FTC examines the place that the manufacturing occurs and how much of the items full production costs can be assigned to the USA components and producing, and just how far away from any overseas content is from the finished item. New Balance claim on their web site and on their footwear labelling that they do fulfill that criteria when they label the product as being manufactured in the USA. New Balance understand that regulation to indicate that more than 70% of the cost of making the sneakers in based in the United States, so that is enough.
The assertions by New Balance haven't been enough to cope with legal problems to their claims and that they are confusing. Back in the 1990s, the FTC did attempt to get an enforcement action in opposition to New Balance over the claims that they were claiming which they ultimately let go its action after a legal test from the Company. In 2019 a class-action lawsuit was negotiated and paid out by New Balance for $750,000 over assertions that the Company made that the shoes are incorrectly promoted as “Made in the US'. In July 2021 the Federal Trade Commission did release new regulations for the using the ‘Made in USA’ assertions that is apparently more rigid than previously. This instigated the organization, Truth in Advertising Inc to prepare a complaint against New Balance with the FTC claiming that for far too long the company has been overtly violating the ' Made in US' origin legislation. This was followed by yet another class action lawsuit getting sent in on 20 December 2021 towards New Balance with regards to the “Made in the US' assertions. The litigation claims that the New Balance shoes that have got this tag line aren't completely produced in the USA which is deceiving customers into thinking they are getting a USA product. The litigants are trying to get $5 million in damages.
New Balance might be pushing the boundaries with their claims, but they allege that they do not violate the rules. Regarding marketing reasons it can allow the organization to be able to persuade consumers that New Balance do back manufacturing in the United States.