Bloomberg News

Pentagon Fights New Balance Bid to Put U.S. Sneakers on Recruits

December 20, 2013

The Pentagon may have boxed out New Balance Athletic Shoe Inc.’s efforts to put American-made sneakers on the feet of military recruits.

The Senate yesterday cleared a defense bill without a provision requiring the Defense Department to provide recruits with U.S. footwear. The original House version had included the sneaker language though it was left out of the final bill.

New Balance, based in Boston, has lobbied the government to follow the letter of a 1941 law that it perceives as requiring made-in-the-U.S.A attire for soldiers. The Defense Department opposed a Senate measure to ensure recruits receive American-made sneakers, saying it would narrow the options of those seeking the best fit for their feet, according to Pentagon documents presented to Congress and obtained by Bloomberg.

“The Army, Navy and Air Force Service Chiefs allow members to select and wear the type of and size athletic shoe that provides the greatest comfort and reduces the potential for injury,” the Pentagon document said. “The department is concerned that limiting service flexibility on this issue will increase injury rates and potentially increase costs if required to procure athletic shoes from a very limited number of vendors.”

Mark Wright, a Pentagon spokeswoman, didn’t respond to an e-mail or phone call seeking comment on the documents, which were labeled “draft informal views.”

New Balance is the last major manufacturer to produce athletic footwear in the U.S. It doesn’t have “a direct window” into what happened because the process is closed, Matt LeBretton, the company’s vice president of public affairs, said in a phone interview earlier this week.

Military ‘Roadblocks’

LeBretton had said company officials believe the Defense Department “continues to put up roadblocks.”

Representative Mike Michaud, a Democrat who co-sponsored the House provision, said it is “extremely disappointing” the final version of the National Defense Authorization Act passed by Congress didn’t include the measure.’’

“We’ve written letters to multiple secretaries of defense and the White House,” said Michaud of Maine, where New Balance has factories. “This is the law, and it needs to be followed. Unfortunately, the Department of Defense has dragged their feet and done nothing to comply for far too long.”

The 1941 law directs the Pentagon to choose American-made products when buying clothing for soldiers. Still, recruits have received cash allowances to buy items such as sneakers and women’s underwear, even if they come from China.

The military issues about $15 million in vouchers annually, assuming 225,000 to 250,000 pairs of shoes for recruits, according to estimates from New Balance.

Spending Shift

Under the legislation, that spending might have shifted to New Balance and other companies such as Wolverine World Wide Inc. (WWW:US), of Rockford, Michigan, that can produce U.S.-made footwear.

Any increase in New Balance’s sales probably would be marginal, since the company has said its total revenue in 2012 was $2.4 billion.

If recruits are required to wear American-made sneakers, the vouchers could no longer be used for shoes made overseas by Beaverton, Oregon-based Nike Inc. (NKE:US) and other companies.

Nike doesn’t sell any 100 percent American-made footwear, Greg Rossiter, a spokesman for the company, said in a June interview.

About a quarter of New Balance’s shoes sold in North America come from U.S. factories, according to the company. The rest are made in countries including the U.K., China, Indonesia and Vietnam.

Lobbying Push

New Balance spent more than three years lobbying the government to apply the American-made rules to sneakers as well as other military apparel. The company on March 15 hired three former congressional staff members to lobby solely on this issue. They were paid $20,000 through Sept. 30, according to Senate filings.

A legislative report accompanying the defense bill directs the Pentagon to evaluate whether domestic manufacturers capable of producing American-made athletic footwear can meet the Defense Department’s requirements, Michaud said.

New Balance said it isn’t giving up.

“We are 100 percent committed to seeing this program come to fruition,” LeBretton said. “We are not going to back down one step.”

To contact the reporters on this story: Kathleen Miller in Washington at kmiller01@bloomberg.net; Jonathan D. Salant in Washington at jsalant@bloomberg.net

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net


Later, Baby
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • WWW
    (Wolverine World Wide Inc)
    • $27.21 USD
    • 0.49
    • 1.8%
  • NKE
    (NIKE Inc)
    • $74.35 USD
    • 0.45
    • 0.61%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus