New Balance close to being military’s sole sneaker provider

But competitors, Pentagon oppose adhering to 1941 ‘buy American’ law

WASHINGTON — New Balance Athletic Shoe Inc. is close to winning an almost decadelong marathon: A “buy American” provision in the massive defense policy bill the Senate will debate this week could force the Pentagon to purchase the company’s sneakers for new military recruits.

Currently, the Pentagon issues about $15 million in vouchers a year, covering 225,000 to 250,000 pairs of athletic shoes, New Balance estimates.

If the provision survives in the final version of the fiscal 2017 defense authorization bill and recruits are required to wear American-made apparel, the vouchers could no longer be used for shoes made overseas by Nike Inc. and other companies.

Boston-based New Balance long has lobbied the government to follow the letter of a 1941 law that it perceives as requiring made-in-the-USA attire for soldiers. That means providing U.S.-made athletic footwear instead of giving recruits allowances to shop for the shoes they prefer.

The Pentagon and the White House oppose the new provision, contending that costs could rise and new recruits could be injured if they are wearing shoes that don’t fit them well.

“New Balance is doing their job; they want to sell their shoes,” Ryan Alexander, president of the nonpartisan watchdog organization Taxpayers for Common Sense, said in an interview. “For Congress to jump in and say, ‘The best value happens to be with my constituents,’ that is the wrong way to do business. This is a politically driven amendment to make sure that certain manufacturers have preference.”

The debate over sneakers is illustrative of how, despite the ban on earmarks, members are still able to tailor legislation to provide specific benefits to their districts.

The House-passed fiscal year 2017 defense authorization bill, HR 4909, contains a provision, sponsored by Massachusetts Democrat Niki Tsongas, that directs the Pentagon to issue American-made athletic footwear. New Balance has a factory in her district.

The language is similar in the Senate’s bill, SB 2943.

‘Right thing to do’

Tsongas has help from her fellow Northeastern lawmakers. New Balance has two factories in Massachusetts and three in Maine with almost 1,400 employees. Materials such as laces are manufactured in Rhode Island, the home state of the Senate Armed Services Committee’s top Democrat, Jack Reed. Maine independent Angus King offered the amendment during the bill’s consideration in committee.

“I am cautiously optimistic,” King said in an interview. “It’s the right thing to do. I don’t understand why anybody would oppose American jobs.”

Adding her voice to following the 1941 law, known as the Berry amendment, is Maine Republican Sen. Susan Collins. She points to the benefit of providing jobs in the U.S. rather than manufacturing products in countries such as Vietnam.

“New Balance and the other companies that have stayed in this country ought to be rewarded for doing so,” Collins said.

One of the most influential boosters of New Balance is Senate Democratic leader Harry Reid.

“We need to help companies that build their products here in America. I go out of my way to buy New Balance shoes, running shoes. Why? They are made in America,” Reid said on the Senate floor in 2014.

The Defense Department isn’t sold on the buy American policy for running shoes. It doesn’t consider such shoes part of the officially issued uniform, and thus shouldn’t be covered by the World War II era law, according to Pentagon policy.

For example, T-shirts and training shorts are considered uniform, but the shoes aren’t.

Some feel slighted

Nike, one of New Balance’s competitors, also isn’t keen on a restrictive shoe purchase policy.

“As a U.S. company with 26,000 employees across the country, Nike believes our servicemen and women should continue to have access to the best possible athletic footwear to fit their foot type and to meet their training needs,” Nike spokesman Greg Rossiter said in an emailed statement.

“There’s another side to this story,” Rep. Earl Blumenauer, an Oregon Democrat whose district is close to Nike’s headquarters in Beaverton, said in an interview. “It’s more about marketing and it deals with underlying policy.”

Blumenauer said he’s concerned that Nike and other apparel companies in his district would be disadvantaged by a change in Pentagon policy.

“The people that I represent in the Northwest produce quality products, and don’t think I am interested in having them undercut by somebody else with a different agenda,” Blumenauer said. “I don’t want them disadvantaged, and they create more American jobs than the few hundred that you are talking about with New Balance.”

The dispute between New Balance, its supporters and the Obama administration has spilled into a much larger issue: the Trans-Pacific Partnership Trade Pact.

Under the deal, shoe and sneaker tariffs would be phased out in countries like Vietnam.

After keeping silent on the deal for almost a year, New Balance is now coming out against it because it says the administration backed out of a commitment to offer the company a chance for a contract to sell sneakers to the military, according to spokesman Matt LeBretton.