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.

By Katy Grimes

When Anthony Maglica founded his machine shop in 1955 as a one-man operation, he never dreamed of the success he would have, nor would he ever imagine that the state in which he lived would slowly kill off his business one day.

Maglica, the creator of the wildly popular and reliable Maglite flashlight, started his machine shop in his garage. He turned that business into an empire, and has sold 420 million hard aluminum-encased flashlights since 1979. And he has not raised the price of the best selling flashlight since.

But California lawyers have fought Maglica over his claim that his flashlights are “Made in America.”

Born in the USA

Maglica, born in New York, moved with his mother to her native Croatia during the Depression and lived there through World War II, and the ravages of war. He returned to the United States at age 22, where after working different jobs, he saved $125 to purchase a metal lathe and start his own machining business.

“I didn’t build this business by myself,” Maglica told me during a tour of his magnificent plant in Ontario, CA. “The employees built it with me.” Against all odds in California’s business-killing climate, according to Maglica, his employees are the primary reason he remains in business.

But Maglica said, that since the last Presidential election, his business hasn’t been profitable. He attributes the business downturn to politics, the sputtering economy, and cheap facsimiles of his product allowed into the country without the stringent regulations he is faced with.

There was a time Maglica could proudly state “Made in America” on his product labels. But he says that California has an unattainable, absurdly strict law requiring that 100 percent of the product be manufactured in America, in order to state this on the product label.

“I have always tried to make all product parts in my own U.S. factory,” Maglica said. “But globalization and the emergence of new manufacturing centers have changed the cost and availability of some components I now have to import.” Maglica said that some parts are just not available from any other American manufacturer, or are cost prohibitive for his company to produce.

California Law

Because the Maglite company has to import a very small percentage of its parts, California state law requires that the company omit the label that states that the product is “Made in the U.S.A.,” despite the fact that Mag Instrument is a U.S. company.

“Unless 100 percent of a product is made in the United States, California’s ridiculous Business and Professions Code provision prohibits my company from using ‘Made in the U.S.A.’ on the packaging,” Maglica explained.

When touring Maglica’s immense facility, it became abundantly clear that he not only manufacturers the many components of more than 20 different flashlights, Maglica has purchased, and turned around, several financially distressed component parts companies in order to keep components available for his line of flashlights. He has brought all of this additional work to his plant in Ontario.

But even this has not helped him in California.

Federal Law

Federal law only 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.

Maglica said that because of California’s laws, Maglite, which is the only major flashlight company still manufacturing in the U.S., can never be advertised as an American product. “Consumers will never know that I employ hundreds of U.S. workers and that my company provides millions of dollars in economic benefit to the city of Ontario, the Inland Empire and the state of California,” Maglica said.

AB 858 – the easy cure

Assembly Bill 858, by Assemblyman Brian Jones, R-Santee, would change California’s law so that it aligns with the other 49 states, and would adopt the federal policies set by the Federal Trade Commission.

While AB 858 appeared to have no opposition early on, recently the state’s Consumer Attorney’s of California have taken up fighting the bill. “Made in America” claims have been a favored target of consumer attorneys for several years.

Maglica said that he has spent far too much money in court protecting his product from illegal copycats, and has been victimized by lawyers in a snafu over the “Made In America” label, accidentally shipped to California from Canada.

While AB 858 will be heard in the Senate Judiciary Committee Tuesday, some have speculated that powerful Capitol staff, opposed to changing the California law, could also be fueling the recent opposition. The Judiciary Committee only released its legislative analysis Monday, less than 24 hours before the hearing, and left out crucial information about California’s existing “Made In America” code requirements.

California’s code was enacted in 1961, more than 50 years ago, long before the global economy was the reality, and before American-manufactured components were shipped overseas where cheaper labor is the norm.

The California statute, which may have been a good idea in 1961, has only added to interstate chaos, putting California businesses at yet another disadvantage, together with stricter labor laws, wage and hour laws, workers compensation insurance laws, and higher state and corporate taxes.

The newly-released Senate Judiciary Committee Analysis failed to even list the Made in USA Brand Certification Mark organization among the supporters of AB 858, even though that organization sent a letter to the committee making abundantly clear that California’s go-it-alone approach means that California has effectively excluded itself from the Made in USA Brand Certification Mark program, which adopts the FTC Guidelines as its labeling standard.

The Judiciary Committee analysis also confused much of the significant differences between the state and federal standards, making them sound nearly identical.  But the differences actually are quite notable, particularly because the federal standard focuses on the foreign content of the completed product as a whole, but the California standard looks at each and every part of the product, regardless of how minuscule or available. The California code requires that each part, even down to the tiniest pins and screws, be produced domestically.

The analysis characterized Maglite’s position on the issue as inviting manufacturers to not even try to produce a 100 percent domestically produced product. But the analysis left out that 100 percent of a total product domestically produced is actually unattainable in America, according to Maglica.

Maglica said that with the incandescent light bulb ban in America, he can’t even get light bulbs for his products, which are all guaranteed for life.

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.

Given that the Korean-built, Euro-spec Chevy Cruze has product contributions from more than 15 different countries, California’s “Made in America” law is hypocritical at the very least.

Maglica has built an American dream with his own hands, and continues to this day to provide employment to the families of more than 700 California residents. Democrats have long complained about American businesses leaving the U.S. in search of cheaper labor overseas. AB 858 is a chance to address this, and potentially bring back more manufacturing jobs to the state.

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.