FTC: Made In The USA Comments Concerning Glenn N. Rupp--P894219
Converse Inc. One Fordham Road, North Reading, MA 01864-2680
Glenn N. Rupp
July 22, 1997
Office of the Secretary
Re: Made in USA Policy Comment File #P894219
As a participant in the Made in USA Workshop conducted by the Federal Trade Commission, Converse Inc. is submitting its comments on the proposed new guidelines recently issued by the Commission.
In our judgment, the FTC's new guidelines reflect, not only the needs of domestic manufacturers of rubber footwear, but equally important, reflect the change in consumer understanding of Made in USA. These topics were clearly evidenced by discussion at the workshop and by the various surveys introduced at the workshop.
In the rubber footwear industry - as in many other industries as well - it is not possible in today's global economy to meet the FTC's standard of "all or virtually all" as a prerequisite to a claim of Made in USA. To survive as a domestic manufacturer in competition with low-wage producers throughout the world, it is essential to import one or more materials or components. It is essential not only for cost competitiveness, but also because some materials and components are no longer available from domestic suppliers.
Converse Inc. believes that a more appropriate standard than all or virtually all" would be one which requires a substantial" share of materials, components and labor to be of U.S. origin and requires final assembly to be performed in the United States. We believe the Federal Trade Commission is absolutely correct in proposing guidelines that recognize the reality of the global economy that has emerged over the past several years.
The FTC proposal of 75% domestic content and final assembly within the US would be acceptable to Converse Inc. We feel, however, that a standard of 70% would be more realistic and provide some tolerance for fluctuating component and material costs and accounting variances.
The Made in USA label is of critical importance to Converse Inc. since its principal US produced product, the Converse Chuck Taylor All Star, has been produced exclusively in the United States since 1916. The All Star is exported throughout the world in significant quantities. Without the Made in USA label, these exports would be substantially reduced and US sales would decline as well. It is important to note that the All Star is the only textile-upper, rubber-soled footwear product still produced domestically, and this production accounts for the employment of over 1400 people in Lumberton and Charlotte, NC and in Mission, TX. If the Made in USA label were to be lost, these jobs would all be at risk.
We are aware of H.Con.Res.80, which calls for the maintenance of the "all or virtually all" standard. The press release, which accompanied the announcement of this Resolution, alleged that "lowering the standard could entice American manufacturers to move some of their operations overseas, resulting in the loss of more manufacturing jobs. As far as Converse and the rubber footwear industry are concerned, this statement is directly contrary to fact. Converse cannot compete on a cost or price basis with imports from the low-wage areas of the world and cannot manufacture its principal product without importing some materials and components. Yet, denying Converse the Made in USA label would eliminate the one competitive advantage it holds over its importer competitors. If the supporters of H.Con.Res.80 have as their objective the retention of American jobs, the "all or virtually all" standard would in fact be a repudiation of that objective.
Converse fully supports the proposed FTC guidelines and commends the Federal Trace Commission on first seeking industry input through the workshop and then acting responsibly on the evidence presented.
Glenn N. Rupp
Glenn N. Rupp