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Yesterday's Eye-Opener concerned a possible regulatory challenge to Shinola's "Built in Detroit" credibility, since the Federal Trade Commission (FTC) looks askance at companies that say they are made in America if they don;t meet the standard for that claim ... and a previous case suggests that "Built in Detroit" could be seen by the feds as tantamount to saying "made in America."

While Shinola watches are, actually, built in Detroit, some of its timepiece movements are made in Switzerland ... which, in the FTC's view, could make its claims inaccurate.

I commented, in part:

I don't think this is just about semantics, and whether "built" is the same as "made." I think it really is all about credibility and authenticity ... As I've said here many times, I do think that the "made in the USA" claim needs to be reserved for companies that are actually living up to the claim, and can prove it. By this standard, I think that Shinola may fall a little short ... it doesn't matter in terms of my appreciation of the brand, but it may matter in terms of being able to make certain claims. Shinola, by the way, is transparent about sourcing on its website ... but that probably isn't enough ...

There are different ways to slice this loaf, by the way. New Balance is a great example of a company that has maintained its "made in the USA" credibility while being totally upfront about the fact that it does as much as it can in the US while making some products and getting some materials in other countries. That might be a good model for Shinola.

In the end, this is an Eye-Opening argument about authenticity and credibility ... and I hope that Shinola doesn't get into a fight it cannot and should not win, because that might distract from the good work it is doing in Detroit.

MNB reader Craig Espelien took issue with my observations:

I am a bit disappointed in your approach to the Shinola “issue” (in quotes because Built in Detroit is not saying Made in the USA – remember Chrysler’s Imported from Detroit commercials?).  Instead of focusing on what is wrong perhaps focusing on all of the things they have done right would be better (but probably does not make good press).  Some examples:

• One of their supervisors was a security guard in the building they ultimately decided to lease.  He was trained on how to build watches and how to lead others – most likely building a better life for him and his family.

• One of their watch builders was a cleaning woman in the building they lease – again, trained on how to assemble high quality watches in a town struggling to recover from other manufacturing job losses (interesting – we call it car manufacturing but these are technically not Made in the USA so perhaps we should change how we speak – some college kid might get offended).

• Bicycles – their frames come from one of the last (or perhaps actually the last) frame manufacturer in the US – located in Wisconsin (from the family that created Schwin) and are made in Wisconsin.

They are using local wherever they can and decided to build their watches in a town in the US in need of good news – rather than outsourcing all manufacturing overseas.  They are now attempting to find like-minded companies in the US to work together to learn how to bring better jobs (higher paying) back to the US.

I have no stake in Shinola – just had a chance to hear more of their story and was very impressed by what they are trying to do – in both Detroit and in the US.  As stated earlier, I am disappointed you did not do more to share all of the good – but decided to jump on the “bad company” band wagon.

Is Built in Detroit too close to Made in the USA?  Not sure – I certainly do not see it that way (granted, others might) but be careful of continuing worthless debate that may ultimately push these types of companies completely overseas.

As an FYI, you also may want to see if any watch parts are still manufactured in the US – not sure they are and certainly not to the precision of Swiss components. So I guess Shinola could have just said “Oh well, no US manufacturers of our needed raw materials so why even try”.  I for one am glad they did not.

I have to admit being a little surprised by this criticism ... in no way do I think that anything I said or implied would suggest that I was jumping on the "bad company" bandwagon.

To be clear ... just in case I was not yesterday ... I admire what Shinola is doing enormously. The point of my piece was to look at the way in which its marketing claim may be viewed by regulators, and to suggest that it should not allow its good work to be diluted by a discussion of this issue. (You're right. A federal probe would get headlines. That was sort of my point.)

Quite honestly, I don't share your opinion that "built in Detroit" implies something very different from "made in America." ("Imported from Detroit," on the other hand, does suggest something different, I think.) And I do think that "made in the USA" ought to mean something very specific, and ought not be watered down even a little. There are plenty of companies investing a lot of money and time living up to what this statement is supposed to mean ... and I think if we start accepting 90% or 85% as the standard for made in America, it becomes a slippery slope and ends up not meaning anything.

And I certainly don't think this is a worthless debate.

One can say all these things and still think that Shinola seems to be a terrific company with admirable goals. I've been online and seen how and where they source certain parts - as I said yesterday, they are completely transparent about this - and I think that they may have to adjust their language a bit.

I was relieved that not everybody disagreed with me. MNB reader Gary Butler wrote:

You make a great point.  I also own a Shinola watch and love it.  I love the fact that it is built in Detroit.  By the way, the quality and workmanship is awesome as well.


MNB reader Doug Madenberg wrote:

Hard to believe the marketing folks at these companies can’t be a bit creative with alternatives to make their point.  “A Proud American Company” or in the case of Shinola, “It’s Detroit Time” or whatever.  Have a customer contest.  But I agree with your inclination that the Made in America claim should mean exactly that.

A customer contest is a great idea. I love it.
KC's View: