Made in the USA: New Balance Still Tied Up in Label Dispute

Classic full-grain leather L.L. Bean boots. Levi's 501 jeans. A 1996 Ford Mustang convertible. And don't forget a pair of sleek New Balance running shoes. These names frequently conjure up images of vintage American products.

When the Federal Trade Commission slapped a suit on New Balance Athletic Shoes Inc. in the fall of 1994, charging the company with deceptive advertising because it imports outer soles from Asia, the definition of what constitutes "Made in the USA" suddenly became a contentious issue.

Responding to the FTC challenge, Jim Davis, New Balance chief executive officer, embarked on a crusade to redefine the trade commission's 50-year-old definition of "USA" labeling. The FTC currently requires that all, or virtually all, the component parts and labor of a product be domestically produced. But New Balance contends that the outer soles can't be obtained in the United States.

Most of the charges against New Balance were subsequently dropped, and the FTC held a workshop on the "Made in the USA" issue in late March. It gave manufacturers, associations, and legal firms a chance to voice their opinions on establishing a definition that is more in tune with a global economy. The FTC is currently reviewing the recommendations of the participants, and is expected to reach a final decision in the next few months.

New Balance, however, claimed victory. "It was a victory both in terms of the FTC dropping charges and holding the workshop," says Paul R. Gauron, an attorney at Goodwin, Procter & Hoar, the Boston law firm that represented New Balance.

So until a final decision is reached, feel free to lace up those New Balance 850 running shoes and rev up the 4.6-liter modular V-8 engine on your sleek, cherry-red Mustang.