Who cares if it’s ‘Made in U.S.A’?

July 4, 2012

By Katy Grimes

‘Made in America’ still stands for something with America’s consumers, but doesn’t appear to be as important for some politicians.

Tuesday I wrote about Maglite flashlight founder Anthony Maglica, who has manufactured the heavy-duty flashlights in California since 1979. He founded his company in Ontario, CA in 1955, first as a machine shop, manufacturing important components for all kinds of products, including Sputnik, the first satellite.

Maglica’s company has grown to a mega-business, and has had more than 1,000 employees. His Ontario plant must be more than 1 million square feet of the cleanest manufacturing I’ve ever seen. Currently, Mag Instrument Inc. has 700 employees.

The Maglite company is an example of ‘Made in America’ like none other. Maglica not only manufacturers everything in California, over the years as his suppliers encountered financial difficulties, he purchased the failing companies in order to keep available the component parts he needs. Rather than scrapping his company, or moving to China or Mexico, Maglica could have replaced the parts suppliers with foreign parts suppliers, but worked tirelessly to keep the business in the U.S., and in California.

But now, instead of being lauded for his efforts to keep his business in the economically crumbling California, Democratic lawmakers appear not to care, and instead want to uphold an obscure California law which states that 100 percent of a product must be made in America, in order to have “Made in the U.S.A” on product labels.

AB 858, by Assemblyman Brian Jones, R-Santee, a one-page bill which would have altered California’s law to be in sync with federal law and the 49 other states, has hit a Democrat roadblock.

After unanimous, bipartisan support and passage through the Assembly Business and Professions Committee, 9-0, and the entire Assembly, 68-0, AB 858 appeared headed for bipartisan Senate support.

But, politics makes strange bedfellows; out of the blue, opposition appeared once the bill hit the Senate Judiciary Committee.

Tuesday, the Senate Judiciary Committee heard testimony on AB 858. Despite compelling testimony, facts, proof, statistics and a heartfelt plea from Maglica, Sen. Mark Leno, D-San Francisco, vociferously opposed the bill. Leno either didn’t understand the problem, or cares more deeply about the Consumer Attorneys who oppose the proposed change to California’s law.

Several years ago, Maglica was sued in what should have been a frivolous lawsuit, over the “Made in America” label on the Maglite packaging.

He had already gone to the expense of altering all of his packaging so that flashlights sold in California would not have “Made in America” on the label. But a shipment sent to Home Depot in Canada, was then sent by Home Depot to one of its stores in San Diego, where the flashlights were sold.

A lawyer discovered this and sued Maglica for violating California Code §17533.7.  Because the Maglite company can no longer purchase the flashlight light bulbs in America because politicians outlawed incandescent light bulbs in the U.S., Maglica was sued for not having a product made up of 100 percent U.S.A. manufactured component parts.

This is the big violation Maglica found himself at odds with California over. He not only had to pay for lawyers to defend Mag Instruments Inc., the company had to pay employees to destroy all of the packaging. While he won the lawsuit, Maglica said it doesn’t feel like a win. The company did not have to pay anything additional to the opposing attorney, but the extra $1 million it cost Maglica to pay the lawyers and to destroy product could have been put toward hiring more employees, he said.

Maglica always thinks in terms of hiring more people. Currently, he has built another building to house an expansion of his product line. He is ready to invest $20 million to do this, and to hire 500 more employees. But California’s business climate is so unfriendly, and so politically embittered, Maglica said that the uncertainty he and other business owners currently face, prevents them from expanding their businesses.

Playing politics

Maglica, Jerry Reilly, Maglica’s in-house attorney, Joel Joseph, chairman of the ‘Made in the USA’ Foundation, and Assemblyman Jones tried to meet with members of the Judiciary Committee ahead of the hearing. Committee Chairwoman Noreen Evans would not agree to meet with them, they reported, nor would her chief consultant.

Leno met with them, but still voted against the bill in the end, citing irrelevant standards from another American manufacturers’ legal case.

Federal law is much more reasonable and requires that a product be “substantially” made domestically to bear the “Made in the U.S.A.” or “Made in America” mark. Maglica said that in all 49 other states, Maglite could make flashlights with even fewer U.S. manufactured parts than it currently does, and still call them American made… but this cannot be done in California, and puts his business at a devastating economic disadvantage.

With hundreds of cheap flashlights flooding the market, designed to look like the Maglite, the one thing immediately recognizable, setting Maglica’s superior product apart is the “Made in America” labeling. Consumers prefer to purchase products made in the U.S.A. when given the opportunity, polls show.

But Leno expressed disagreement with the importance of the “Made in the U.S.A.” labeling. “I’m not convinced that it’s a make-or-break standard to put ‘Made in the U.S.A. on products,” Leno said. “It’s not going to discourage consumers from the merchandise.”

“And we aren’t discouraging manufacturing in California,” Leno added, proving that he is totally unfamiliar with any aspect of the manufacturing as an industry. And Leno, from San Francisco, made it abundantly clear at the hearing that he would not be swayed by a bunch of manufacturing bumpkins.

The bill failed 3-2. But it’s not over. The U.S. Congress may be more receptive, and willing to put California politicians back in their proper places.

“Made in America” is about much more than products and parts; “Made in America” is about guys like Tony Maglica, who started the company in his garage and grew it to a multi-million dollar business, providing thousands of tax-paying Californians well-paying manufacturing jobs.

Jones quoted from my Tuesday story, Products ‘Made in America’ at odds with CA,” for his closing statement:

The Analysis also ignored the effect that California Code §17533.7 currently has on California manufacturing jobs.  Analysis focused on making sure consumers have “the benefit of the bargain,” but totally missed what the consumer aims for by purchasing a produce made in America.

Polls have shown that if given a choice, consumers will spend more on products if they are made in America.

Maglica has worked diligently to make sure that manufacturing for his Maglite flashlights stay in Ontario, when he very well could have taken much of the work to Mexico for a fraction of the cost.

A manufacturing business is known to support five-times more jobs than what is reflected on its payroll. Shouldn’t California lawmakers believe that  this bill is a good change for the state? After losing more than 600,000 manufacturing jobs between 2001 and 2011, California businesses could use a little ray of light on the dark uncertainty that has taken over the state.

If it’s jobs politicians really cared about, they would have supported AB 858.

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