In January 2016, Horological Times reported that Detroit-based watch manufacturer, Shinola, said it would continue to use the line “Built in Detroit” in its marketing, even though the Federal Trade Commission (FTC) had warned it not to.
Since then, however, things have changed. In a June 16 letter to Shinola’s general counsel, FTC lawyers said that Shinola’s past ads, particularly its “Where American Is Made” slogan, “overstated the extent” to which its timepieces are actually manufactured in the United States. In some cases, it said, 100% of its parts are produced abroad.
The FTC’s letter to Shinola states
As we have discussed, unqualified “Made in USA” or “Built in USA” claims likely suggest to consumers that products are “all or virtually all” made in the United States.The Commission may analyze a number of different factors to determine whether a product is “all or virtually all” made in the United States, including the proportion of the product’s total manufacturing costs attributable to U.S. parts and processing, how far removed any foreign content is from the finished product, and the importance of the foreign content or processing to the overall function of the product.
Shinola has implemented a remedial action plan to account for its significant imported content. The plan includes: applying corrective hangtags and information cards to watches, bicycles, and other products to let consumers know that those products include significant imported content; redesigning watch case backs; updating embossed claims in affected leather goods; updating advertising materials to qualify their claims; updating employee training materials; transitioning away from the “Where American is Made” slogan; and developing enhanced policies and procedures, including additional legal review, to avoid future deception or mislabeling.
Because of this plan, the FTC has decided not to recommend enforcement action at this time. They will, however, continue to carefully monitor Shinola’s advertising.
Going forward, the advertising tag line “Built in Detroit” will be amended to “Built in Detroit with Swiss and imported parts.”
“Made in the USA” vs “Swiss Made”
Countries such as Germany and Switzerland do not have the same demanding guidelines as the US does in determining the origin of manufacture for their watches. According to Nicholas Manousos, technical editor of HODINKEE, “‘Swiss Made’ and ‘Made in Germany’ do not require 100% of the watch to be made in country. ‘Made in USA’ requires every component in the watch, including the movement, to be actually manufactured in the USA. . . . if the same stringent monitoring of manufacturing and terminology were applied to Switzerland and Germany, far fewer watches would be ‘Swiss Made.’”
Horological Times will continue to report on the ongoing discussion of what constitutes “Made in the USA” and the new requirements for the “Swiss Made” label, which will take effect in January 2017.
Detroit Free Press
Former President of the Detroit Lions Named
Shinola’s New CEO
Former Detroit Lions team president Tom Lewand has been named CEO of Shinola/Detroit LLC. Lewand replaces Steve Bock, a former Fossil Group Inc. division president who becomes CEO of Shinola’s sister retailer, C.C. Filson Co., a Seattle-based manufacturer of upscale outdoor gear, clothing, and luggage.
Shinola’s president, Jacques Panis, will report to Lewand and to Shinola’s founder, Tom Kartsotis. Lewand will be Shinola’s first executive from metro Detroit.
“Bringing Tom Lewand onto the team is enabling us to expand the reach of Jacques Panis into some interesting new initiatives that we are pursuing,” Kartsotis said.
Lewand has been credited with modernizing the business operations of the Detroit Lions, a team that lagged behind the rest of the NFL. The team made the playoffs twice under Lewand as president, but struggled otherwise on the field.
Lewand was also the top contract negotiator for the team and was intimately involved in all major business decisions for the team.
Lewand said that Shinola made a big splash in Detroit, and he got to know Tom Kartsotis and Jacques Panis over the past few years while he was with the Lions. “As I got to know them more, and the company more, the opportunity really started to develop as the conversations continued.”
Lewand has said of Shinola: “It’s a good company, good group of people with great products and a great mission.”
In addition to the new roles for Lewand and Bock, there have been promotions for some other Shinola executives:
• Christopher Hull to chief merchant, reporting directly to owner Tom Kartsotis.
• Shannon Washburn to vice president of watch product development.
• Kara Berg to vice president of sales.
• Whitney Delgado to vice president of design.
• Trish O’Callaghan to vice president of communications.
Crain’s Detroit Business
Donna Hardy is managing editor of Horological Times.