Bill would change 'Made in USA' law to favor manufacturers - Brian W. Jones

Bill would change 'Made in USA' law to favor manufacturers

ONTARIO - Under California law, Mag Instrument's nine-building campus where Maglite flashlights are designed and manufactured is not good enough for the company's products to be made in the United States.

Why? Company founder Anthony Maglica and Robert C. Weiss, an attorney who represents the company, say an O-ring - and state law are to blame.

They are, however, supporting an effort to change California law and bring the state's labeling rules in line with federal practice.

"It wouldn't benefit me. It would be a benefit to the employees down here because people look at buying in America," Maglica said.

State Assemblyman Brian Jones, R-Santee, has introduced a bill that would amend California law to mirror federal rules.

Jones toured the facility Friday. Mag Instruments is also attempting to gain support for the bill from members of the Inland Empire delegation to the Legislature.

"I think I have a greater understanding of my own bill after being here today," Jones said after seeing Maglites at various stages of the production process during his tour.

Jones' bill, A.B. 858, passed the Assembly on a 68-0 vote in April. The bill is awaiting a hearing in the Senate Judiciary Committee.

Federal Trade Commission guidelines require "all or virtually all" of a product's components to be made domestically to allow a "Made in the USA" label. California statute, however, requires all parts of any merchandise be made in the United States to bear such a label.

Mag Instruments uses an O-ring in the production of its flashlights that is significantly cheaper to purchase if imported from China than if produced domestically.

That imported O-ring means it is not enough for Mag Technology's products to be labeled as "Made in the USA" despite being designed, machined and assembled in Ontario.

Laser engraving machines at the company's plant burn the words "Ontario, California, USA" into the company's products, but they can't tell customers that Ontario is where the flashlights are made, and not just where the company maintains its executive offices.

And that leaves Mag Instrument at a disadvantage to manufacturers who outsource all or most production work overseas, Weiss argued.

"While they can't say their product is `Made in the USA,' neither can we, and we feel that we should be entitled to that competitive advantage," he said.

As a practical matter, Mag Instrument cannot label its products as "Made in the USA" even if they are destined for other states. A shipping error or a distributor's need to sell surplus merchandise could send Maglites back to the Golden State, putting the company in violation of the law.

Mag Instrument has already had to defend itself against two lawsuits filed according to the labeling law, Weiss said. The company did not have to pay any damages, but did incur the costs of its legal defense.

After the first case, which happened around 2005, the company had to destroy all packaging that said its products were manufactured in the United States.

"I had to take the stuff to shred for six months," Maglica said. "I had hundreds and hundreds of pallets of packaging we had to destroy."

Reach Andrew via email, call him at 909-483-8550, or find him on Twitter @InlandBizz.

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