A manufacturing alliance has filed a petition with the Federal Trade Commission accusing Element Electronics of false advertising when the company says that its televisions are assembled in the United States.
The Alliance for American Manufacturing claims Element does only minimal work on Chinese-built televisions at its plants in Fairfield County and Detroit.
“If a company wants to wrap itself with the American flag in advertising, it should at least meet the bare minimum standard for manufacturing and assembling products in the USA,” Alliance president Scott Paul said in a press release. “It’s our duty to expose this sort of ‘red, white and blue-washing’ wherever it occurs.”
The group claims Element’s assembly consists of employees removing the televisions from boxes shipped from China, checking the screens for scratches and using pneumatic screwdrivers to open the back of each television and insert a memory board. Workers also do some mechanical testing on the televisions, the group claims, which are then repackaged and sold at stores such as Wal-Mart.
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The Alliance for American Manufacturing was formed in 2007 by the United Steelworkers of America.
An Element spokesman told The State that the alliance’s claims are unfounded.
“We meet or exceed the Assembled in America standard,” said Vlad Kazhdan, Element’s vice president of product merchandising, in a statement.
The Minnesota-based company’s website advertises that “to our knowledge we are the only American-owned and American Assembled Television Company.” It features a large logo fashioned like a red, white and blue campaign button that proclaims “Assembled in the USA.”
The FTC regulations, according to its website, require that “all or virtually all” of the product must be made in the United States to proclaim it “Made in the USA.” It adds that using flags, outlines of the United States or other references to America can be a violation because it implies all or virtually all of the product is made in America.
The regulations add that a product that includes foreign components may be called “Assembled in USA” if its “principal assembly takes place in the U.S. and the assembly is substantial.”
“For the ‘assembly’ claim to be valid, the product’s last ‘substantial transformation’ also should have occurred in the U.S. That’s why a ‘screwdriver’ assembly in the U.S. of foreign components into a final product at the end of the manufacturing process doesn’t usually qualify for the ‘Assembled in USA’ claim,” the regulations state.
Element made a splash in 2012 when it opened its Detroit plant, proclaiming it was bringing jobs back to the U.S. In South Carolina last year, Gov. Nikki Haley helped unveil a $7.4 million renovation of a Winnsboro building where the company said it would assemble televisions and create 500 jobs.
“The governor is very comfortable that Element meets or even exceeds the standard in question,” Haley spokesman Doug Mayer said Wednesday. “But more than that, she has been to Element multiple times, met with employees firsthand, and knows how much they appreciate the direct relationship they have with Element's leadership. Governor Haley couldn't be more proud that Element is making TV’s in America, and is doing it right here in South Carolina.”
Haley attended the Element announcement last year via video from Florida where she was attending a Wal-Mart manufacturing summit.
“Element is a poster child of Wal-Mart’s recent Made in America push,” the alliance’s Paul said in the press release. “Through heavy advertising consumers are led to believe that Element’s televisions contribute to bringing jobs back to the United States. We hope through our action that this facade will be exposed and that Element will take real steps to not only meet but exceed the Assembled in USA standard.”