Drones
Drones Made in America FTC Crackdown
News and comment. Since the U.S. military launched a campaign to limit Chinese-made drone technology that was bought with government money, American-made drones have had a significant marketing advantage. Global manufacturers such as Parrot offer a model made in the USA that has been included in the Blue sUAS list: Autel has gone through a lengthy process of working with US export authorities to ensure that one of their models is “Made in the USA” according to strict rules for the percentage of parts and labor that must come from the US. Many US companies that assemble drones in the US have claimed – generally in good faith – to offer American-made drones. Now, however, the US Federal Trade Commission (FTC) is going through the cracks as to which companies can really claim the coveted title “Made in the USA” for themselves. The new requirements could have a significant impact on the drone industry.
Drones Made in America – with parts sourced worldwide
Many US-based companies with manufacturing and assembly facilities in the US may find that they can no longer claim that their products are “Made in the US” when more than the permitted proportion of parts is sourced worldwide. The FTC’s new “Made in the USA” labeling rule states that products may only bear the label if “1) the final assembly or processing of the product takes place in the United States; 2) all material processing that goes into the product takes place in the United States; and 3) all or virtually all of the ingredients or components in the product are manufactured and sourced in the United States, ”states the FTC notice.
“Almost all” components can be the difficult topic for drone manufacturers. Cameras, gimbals, plastic parts, airframes, batteries and more often come from overseas – and can be expensive or difficult to procure domestically. It remains to be seen what “almost everything” means exactly – and whether companies will have to open up new sources of supply and perhaps raise prices in order to meet the requirements.
The need for transparency
Hopefully the FTC ruling will do what it is supposed to do: create clarity for consumers. With strict rules – and significant penalties for violations – all manufacturing, including the drone industry, is being forced to maintain a new level of transparency about their manufacturing process. This is a point that many consumers and manufacturers support.
Randall Warnas, CEO of Autel, says clarity will benefit the industry and allow drone makers to stand on their merits. “Anyone who breaks the rules in order to make small profits does not represent the industry well and should be punished,” says Warnas. “At Autel, we believe we have the right technology at the right price with the right relationships. We do not believe that regardless of our country of origin, we should be punished for violations by other manufacturers. We’re working to get approval in the right way so that we can be the vehicle of choice for federal, commercial, and civil drone programs across the country. “
Industry thought leader Romeo Dursher, VP of Public Safety at Auterion, previously worked for Chinese drone manufacturer DJI – the industry leader hardest hit by US government regulations on domestic drone sourcing. “The new FTC rule might just be the crackdown that the drone industry needs to get drone manufacturers on the path to greater clarity when promoting certain claims,” says Dursher. “To replace DJI, marketers rushed to use“ made in the USA ”for their products. This is not the same as compliance. Deliberately misleading customers has created confusion about where a drone is made and whether it is NDAA compliant. Corporate drone buyers are already looking for US-compliant drones, and hopefully this rule will be another push for greater transparency. “
Miriam McNabb is the Editor-in-Chief of DRONELIFE and CEO of JobForDrones, a professional marketplace for drone services, and a passionate observer of the emerging drone industry and regulatory environment for drones. Author of over 3,000 articles focusing on the commercial drone space, Miriam is an international speaker and recognized figure in the industry. Miriam graduated from the University of Chicago and has over 20 years experience in high-tech sales and marketing for emerging technologies.
For advice or writing in the drone industry, email Miriam.
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