The Federal Trade Commission (FTC) has been cracking down on violations of the Made in USA Labeling Rule. A record-breaking civil penalty fee has been issued to tractor manufacturer Kubota North America. Kubota has been fined $2 million for its false and deceptive use of Made in America labeling.
The FTC Guidelines
In August of 2021, the FTC initiated the Made in USA Labeling Rule, which stipulates the following guidelines:
In order for sellers to label something as Made in the United States, the following three conditions must be true:
- The final assembly or processing of the product occurs in the United States
- All significant processing that goes into the product occurs in the United States
- All of virtually all ingredients or components of the produce are made and sourced in the United States.
Source: Code of Federal Regulations, Made in USA Labeling
This ruling has been in effect for nearly three years, and the FTC has been prowling for violators ever since. In the crosshairs now is tractor manufacturer Kubota, which was recently found to be mislabeling their tractors, farm machinery, and replacement parts as being made in the USA when in fact, they were wholly imported.
About Kubota
Kubota Corporation began as a Japanese brand in 1890. The company is based in Osaka, Japan, and manufactures all manner of agricultural and construction machinery. In the 1960s, they began importing their tractors to the United States with partner brand McCulloch. Now, they operate under the name of Kubota Tractor Corporation and own a headquarters in Gainesville, Georgia.
Today, Kubota reports that they employ 7,000 people in the United States and source 260,000 tons of American steel per month. They are the number 1 selling sub-compact tractor in the USA, and there are over 1,100 authorized Kubota dealerships across the nation.
The Violation
On 21 January 2024, the Department of Justice issued a ten-page complaint against Kubota on behalf of the FTC. It includes details of the mislabeling, complete with photographs of said labels, and allegations of false marketing. In addition to paying a $2 million civil penalty, Kubota will face stiff regulations to change its labeling practices.
The FTC’s complaint document states that Kubota has “engaged in its unlawful acts repeatedly over at least three years, despite being sued by the FTC previously for the same violations.”
Yes, this isn’t Kubota’s first time in the hot seat with the FTC. In fact, in 1999, the FTC sued the company for this issue. Kubota was found to be advertising under false Made in America claims. Twenty-five years isn’t enough to learn a lesson, as Kubota is again held accountable for their repeated violations.
Hopefully, this is the last time that Kubota has to learn this lesson. Thanks to the FTC, companies like Kubota are being hauled into the spotlight for their false marketing and nefarious intent. Made in the USA means something to the American people, and the FTC is ensuring that such labeling remains true and honest, just like manufacturing ought to be.
Image credit: Kubota
