A Defining Moment In Our Industry

“American-made,” “USA Made,” and “Made In America,” have been loose terms in our industry for quite some time. We’ve all had a different interpretation of what these phrases mean and have built our products and marketing according to our own interpretation of the standards. While many of us in the industry like to compare ourselves to the Swiss or Germans, American laws are very different and we, as Americans, must respect that.

In October 2015, Niall received a letter from the FTC regarding the use of the term USA Made. While somewhat of a surprise at first, we jumped at the opportunity to share our story and our point of view.

The root of the FTC inquiry was simple. We were asked to explain why we claim to be “USA Made.” Having been transparent from day one, and always being proud of our Swiss friends at Eterna, we cooperated with the inquiry. Cooperation meant getting on the phone with our suppliers to revalidate information about what is made, where it’s made and component value.

The investigation was, in our opinion, a good experience — minus, of course, the legal fees we paid to make sure we avoided any missteps. While I would have preferred to spend that money on more equipment for the watchmaking facility, the FTC staff was respectful and interested in learning about our industry, methodology and processes.

Our Approach

When we used the term “USA Made” at Niall it always meant (to us) what we’ve tried to publicly convey — everything except the movement is manufactured in America. Outer casing, inner casings, bezels, dials, hands, glass, screws, crowns, crown gaskets, o-rings, straps, polishing, finishing assembly and QA. It’s taken us three years, 7,000 hours, and hundreds of thousands dollars to do such. So yes — we’re very proud of that.

Because we took the path less traveled and chose to manufacture all non-movement components in America, it made it easier for us to cooperate with the FTC. Within 3 days we had a full set of documents about how the Niall One.3 was made, where it was made, how much it cost, how many times we used the term “USA Made” in our marketing, and where we marketed the terminology.

I will say, this investigation is not just about Niall, it’s about our industry. And I can only assume every American watchmaker will be held to the same standards. Which is why the FTC was very diligent and asked a lot of great questions — it’s about our industry. I applaud the FTC for its diligence in conducting its duties.

USA Made — From Our Experience With The FTC

Disclaimer: This section is our opinion and based on our experiences during the FTC investigation. It is not meant to provide legal advice but offering insight. For reference, here is a link to the closing letter on the FTC’s website.

After coordination between our lawyers and the FTC — we derived a clear answer regarding what the term “USA Made” actually means from a legal standpoint.

What we’ve learned is if a watchmaker desires to use the blanket term — “USA Made,” “Made In America,” “Made In USA,” “Made In The USA,” “Manufactured in America” or anything remotely close — they must manufacture 100% in America, down to the microscrew. Even the movement, the jewels in the movement, the escapement, the hairspring. Everything. I understand the law states “Virtually, if not all,” but in watchmaking — we can conclude it pretty much means 100%.

Think of it this way, if you remove any part from a watch and it stops keeping time, or removing that part no longer makes it a watch, you must manufacture it in the USA. Assembly does not count as “made.” Made = Manufactured.

Additionally, terminology that can be confusing to consumers should be heavily considered before moving forward with branding or marketing. Giving the blanket statement, Los Angeles, New York, Miami, etc. on your dial can be confusing to consumers. While we’re all proud of our hometowns, it is my personal recommendation that if something seems even slightly confusing for a consumer — choose a different path.

Qualifying Statements Are The Key

There is a area in between “USA Made” and nothing at all. Qualifying statements. If a U.S.-based watchmaker wants to use the term “USA Made,” “Made In America,” etc., they must add a qualifier like Swiss movement, Japanese movement or other country of origin. Additionally, it must be in the same sentence. However if you do use the phrase “USA Made. Swiss Movement,” you better be making all non-movement components in the USA.

This also applies for movements. I know several American watchmakers are close to manufacturing a U.S.-based movement. I hope for their own sake they don’t make the mistake of calling it an American-made movement. Unless everything is manufactured in the USA — including the escapement and jewels. If they decided to go that path, they may receive a letter from the FTC and may face potential enforcement that could lead to fines. None of us in the industry would like to see that happen.

Qualifying statements are why Niall added “Swiss Mvmt” to the back of our bezels, removed “USA Made” from our dials and modified some language on our website and social media accounts. While “Swiss Movement” was engraved on the Swiss Eterna 3903a mainplates, the qualifying statements needed to be closer in proximity. Making these changes was no problem and we were more than willing to oblige. Because, at the end of the day, we’re not selling American watches. While America is at very core of who we are, and we have continually shown our commitment to reshoring in America, Niall exists for a far greater reason. Honoring those who are all in.

It is my personal feeling that Niall had a smooth experience with the investigation for several reasons. We were quick to respond, willing to cooperate, worked with quality lawyers, Kennyhertz Perry, that had deep FTC experience, but most of all, we could quickly document how and why we do what we do — because we’ve believed in transparency since day one.

HIT — Horological Initiative of Transparency

The FTC is clear about what it is looking for — transparency. If you can’t be transparent, you need to quickly modify your business model.

“I am all for the resurgence of the American watchmaking industry, but I am also all for honesty.” — Nicholas Manousos, Technical Editor @Hodinkee.

Resilience and fortitude are at the very core of Niall. We also believe in standing tall and doing the right thing. We believe in honor. Which is why we’re launched HIT — the Horological Initiative of Transparency.

HIT is a call to all companies in the watchmaking industry to provide publicly available information on manufacturing and more. You can see Niall’s transparency initiative in full view on our new website —http://niallluxury.com. Go to the footer on every page, and click “transparency.”

On Niall’s transparency page, you can view, part by part, what our components are, where they are made, and what percentage they contribute to the timepiece. We do not provide dollar information or supply sources out of respect for our suppliers and partners.

I am making the call to all my fellow watchmakers to find a methodology of transparency that works for you and make it public. If it follows Niall’s model — great. If you have a different way of providing transparency — we applaud you. Make the leap and stand behind your product.