New Balance CEO Rob DeMartini criticized the Defense Department on Tuesday, saying the agency has refused to seriously consider buying the company’s American-made athletic shoes for military personnel.
DeMartini spoke to the media a day after the sneaker maker renewed its opposition to the Obama administration’s Pacific Rim trade deal, claiming the administration had gone back on an assurance that the company would get a chance to compete for military business in exchange for ending its vocal objections to the agreement.
The Boston company has been aggressively pursuing a Pentagon contract for years. It appeared to have a major breakthrough two years ago when the Defense Department decided to honor the Berry Amendment with regard to athletic shoes for recruits. That 1940s-era law essentially requires the purchase of domestically manufactured clothing and equipment for recruits. There had been an exemption for sneakers because of the lack of American-made options.
But since that time, New Balance claims that the agency has been stonewalling, and not showing a sincere interest in the all-American shoes the company wants to make for the military.
“DoD has consistently moved the goal post,” DeMartini told reporters at the company’s Brighton headquarters. “They’ve gone as far to say our shoes haven’t measured up. That’s ridiculous. We've been in this business for 110 years.”
The office of the US trade representative maintains that the two issues — the Pentagon business and the trade accord — should be treated separately, and that New Balance’s needs were taken into consideration in the trade talks. The Obama administration has made getting the accord approved by Congress a major priority for its final year, although the vote might not happen until after the November elections.
Matt McAlvanah, a spokesman for the federal trade agency, said it worked hard to ensure that the trade deal provides economic benefits for New Balance and the rest of the footwear industry. He noted that Ambassador Michael Froman met with New Balance workers in Maine in one of his first trips as US trade representative.
“Our negotiators met extensively with New Balance to achieve a strong TPP outcome,” McAlvanah said in a statement. “We are disappointed that New Balance has changed its position on TPP based on factors outside the agreement. The Department of Defense makes procurement decisions following its own processes and quality and affordability requirements.”
Defense Department officials claim the shoes New Balance has offered for consideration to the Pentagon do not meet its cost standards, and one of the models did not meet durability standards. A spokesman for the department couldn’t be reached on Tuesday for comment.
When the company last year turned neutral on the Trans-Pacific Partnership, a pact aimed at making trade easier among the United States and 11 other countries, it did so after opposing the pact for several years.
One reason that switch happened, company officials said, was because New Balance was promised an audience with a top-ranking Pentagon official to discuss the opportunity to provide shoes for military recruits.
“We had a commitment from the trade ambassador [Michael Froman] that he would help to facilitate that meeting, and to the best of our knowledge, that simply has not happened,” DeMartini said. “We’re not getting the treatment that our American workers need and deserve.”
DeMartini said the company is worried that the trade accord’s phase-out of tariffs on shoes made overseas, particularly in Vietnam, will happen too quickly and will put New Balance’s domestic manufacturing at a competitive disadvantage. New Balance employs about 1,400 people at five New England factories, and is the last major company to manufacture athletic shoes in this country.
New Balance still makes the bulk of its shoes overseas. But owner Jim Davis, a longtime Republican contributor, is a big believer in American manufacturing and sees the military business as a way to add jobs in his factories. A contract with the Pentagon could result in the purchase of as many as 200,000 shoes or more a year.
DeMartini said the company is willing to offer these shoes at no markup to the Pentagon.
“We know American workers can make shoes for American soldiers,” he said.