What Does it Mean to be Made in America in 2019?

Introduction

As our customers, you know High Sky RV Parts has locations both in Washington state and in Switzerland. One of the questions we get asked most often is “so, where are you shipping from?” Well the short answer is, right from the U.S. For the long answer, the majority of the global RV industry is located in America, parts manufacturing is American, and there are companies like Airstream which are iconic American brands. While we do have customers all over the world, the products we carry are for the most part, with a few exceptions like the brands Dometic, Fiamma, and Baraldi, for example, American. And all of our parts, including the non-American-made ones, are still shipped right from the United States. So, what does it actually mean to you as customers to “buy American?” And what does it mean for us as a brand to “sell American?”

Made - In - America

On March 22, 2019, Truth in Advertising (TINA), a non-profit consumer watchdog organization dedicated to combating 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 federally mandated safety protocos and quality assurances that American factories are among the safest in the world (check out the Airstream" factory, for example), producing some of the safest goods. Similarly, as expensive new technologies threaten not only invididual jobs but also entire markets, many innovations increase productivity, thereby increasing output and, ultimately, sales. Furthermore, although a 2018 Deloitte Insitute report indicates that 83% of executives are offering higher pay to attract and / or retain skilled workers - a 15% 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 a Made 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 suprisingly 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 in Mexico, 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.

And while it is true that we have the ability to measure a vehicle’s domesticity, thanks to the American Automotive Labeling Act of 1994 and the Kogod Made In America Auto Index created in 2013, the truth is: there isn’t a single mass production vehicle from any major automaker that is 100% Made in America - with the sole exception of Tesla, who arguably functions more as a market disruptor than contributor.

Challenges

It’s true, that even with high operating costs, regulatory red tape, and overseas competition, the United States still produces roughly 18% of all global products and maintains a foothold as the third largest export economy in the world, behind China and the European Union. But when we start to dig a little deeper and look a little closer at that slowly shifting, vintage fabric of American manufacturing, we see that not only is the pattern changing, but also the edges are beginning to fray.

Because, like it or not, “buying American” in today’s economy is much more complicated, and more often, much more compromised. From government regulation, trade wars, labor shortages and rising overhead to the mainstreaming of next-gen technology and self-driving cars, American manufacturing has perhaps never faced more unique challenges than it does right now. The production of U.S. goods looks worlds different than it did just a few short decades ago and - in a few more - it may be unrecognizable.