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Thursday, October 6, 2011

Why Overseas Manufacture Makes Better Sense

It's because the American government is the enemy of American manufacturing. Read below, and you'll see why it just makes for an easier row to hoe for storied American companies like Gibson Guitars to fire all the American employees and build in India.

According to the Indian government, fingerboard "blanks" -- the wood that will eventually become a guitar's fretboard -- are legal to export.

"Fingerboard is a finished product and not wood in primary form," Vinod Srivastava, India's deputy director-general of foreign trade, stipulated in a letter dated Sept. 16. "The foreign trade policy of the government of India allows free export of such finished products of wood."

The U.S. government disagrees. In its affidavit to search Gibson, U.S. Fish and Wildlife Service considers fingerboard blanks to be raw materials, not finished product -- illegal to export from India and, therefore, illegal to import into the United States.

What's more, according to the complaint, the Gibson wood was imported with an incorrect tariff code, which was off by one digit from the correct code. Luthiers Mercantile International, the company that imports the wood for Gibson, claims that was a simple clerical error. The difference in the codes refers to the thickness of the wood -- more than or less than six millimeters in thickness.

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