Federal Trade Commission
Received Documents
Jan 17 1996
B18354900054
Secretary

Whirlpool Corporation
Jack Sparks Administrative Center
St. Joseph, Michigan  49085

16 January 1996

Office of the Secretary
Federal Trade Commission
Room 159
Sixth and Pennsylvania Ave., NW
Washington, DC  20580

RE:  "Made in USA" Claims in Product Advertising and Labeling
     Whirlpool Comments (FTC File No. P894219)

Enclosed in Whirlpool Corporation's comments regarding the "Made in USA" claims in product
advertising and labeling.

Please enter these comments for the record.

Mike Thompson
Director, Government Relations

Enclosure:  disk (Word 6.0)
              Comments by Whirlpool Corporation 
                 on Federal Trade Commission
  "Made in the USA" Claims in Product Advertising and Labeling
                     FTC File No. P894219
                         (60FR53923)
                       January 16, 1996
                               
                                
  Whirlpool Corporation, the world's leading manufacturer of major home appliances, has
  comments regarding the Federal Trade Commission's (FTC's) request for input pertaining
  to "Made in USA" claims in product advertising and labeling.  We are a global marketer
  and manufacturer of a full line of major home appliances and have a marketing presence in
  over 140 countries.  In the US we see a value in being able to advertise our products as
  "Made in USA."  Heretofore we have not done so because of the very strict standards that
  the FTC has established for declaring a product as being of US manufacture.
  
  The 100% parts and labor content standard established by the FTC is unreasonable and
  does not reflect our truly global economy.  As such, Whirlpool supports the position of
  our trade association (The Association of Home Appliance Manufacturers- AHAM) which
  condones using one or more of the NAFTA criteria for determining origin.  Specifically,
  for some products, like small appliances, a product is "Made in the USA" if
  
  1)  over 50% of the product is of domestic origin using the net cost method, or
  
  2)  more than 60% of the product is of domestic origin using the transaction value
  method.
  
  Alternatively, we agree with AHAM that another option for the FTC to consider would be
  to allow "Made in USA" status, for advertising purposes, if over 50% of the product's
  parts and labor content is domestic.  The FTC should be aware that for other products,
  like major home appliances, the rules of origin are based on tariff classification change, not
  value content.  This latter method has the advantage of avoiding burdensome accounting
  to determine eligibility of a product for domestic origin.  Any of the above approaches
  would be more acceptable and would provide needed flexibility to manufacturers in
  advertising to consumers that a preponderance of the parts and labor in a particular
  product are of US origin.
  
  Our experience has shown that the above changes are needed because
  
  1)  key, expensive components of an appliance are often not available in the US in the
  quantities necessary for large scale production (e.g. compressors),
  
  2)  some components available in the US are not competitive in quality or price leaving the
  choice to either purchase all of the appliance overseas or to merely purchase the more
  competitive components abroad while purchasing and assembling the larger percentage of
  the final product in the US, and
    Whirlpool Comments
  FTC-Made in the USA
  p.2
  
  
  3)  it is often difficult to guarantee that all labor and components of an appliance are of US
  origin due to the increasing complexities of global procurement systems.
  
  Conclusion / Recommendations:
  
  The current 100% parts and components standard for allowing US companies to advertise
  and label their products as being "Made in USA" penalizes American businesses.  A new
  standard should be set in place.  Changes need to be set in place based on NAFTA's
  particular rules of origin for each tariff classification.  However, simply implementing the
  50% or 60% standards noted above would constitute a vast improvement over the current
  system.
  
  With the inclusion of one or more of the above changes in the FTC's standards for
  advertising "Made in USA," consumers will benefit, American businesses will have a
  better marketing position against foreign competition and the Commission will have a
  substantially improved and less burdensome standard.
  
  For further information please contact 
  
  Mike Thompson
  Director, Government Relations
  Whirlpool Corporation (MD 9025)
  701 Main Street
  St. Joseph, MI 49085
  Phone:  616-923-4647
  
  
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