Interpretation ID: nht81-2.31

DATE: 06/03/81

FROM: AUTHOR UNAVAILABLE; Frank Berndt; NHTSA

TO: North American Classics Corporation

TITLE: FMVSS INTERPRETATION

TEXT: This is in reply to your letter of April 15, 1981, asking two questions with respect to the temporary exemption provisions of the National Traffic and Motor Vehicle Safety Act (15 U.S.C. 1410) and implementing regulations (49 CFR Part 555).

Your first question is:

(1) Assuming North American Classics designs the total engineering of the Thunderbird reproduction; selects all components to be incorporated therein; retains primary control over quality control, testing, FMVSS compliance in design; and manufacturing assembly sequence; and markets the produced vehicles on its behalf to its customers, does North American Classics remain eligible to apply for exemption from meeting certain FMVSS requirements for this vehicle in the event that the actual responsibility for the assembly of the vehicles is contracted by North American Classics to a manufacturer which produces more than 10,000 motor vehicles per year?

Although you have not said so, I understand from Taylor Vinson that the manufacturer with whom you would contract is a foreign corporation which has never produced motor vehicles for the American market. We also understand that it may be less expensive to have your car built abroad than at home.

Under the circumstances you describe, the foreign corporation appears to be nothing more than your agent in fabricating the vehicles and returning them for sale. This would not affect your eligibility for exemption. You would retain the responsibility for certification, as we understand it, even though the name of the foreign manufacturer would also appear on the certification label, as required by 49 CFR 567.4(g)(1).

Your second question is:

(2) In the event that North American Classics enters into an agreement to have such vehicles produced or assembled by a major automotive manufacturer, who would not be so eligible, and if such agreement provides for the sharing of profits derived from the sales of the finished product between North American Classics and such manufacturer, as a means of providing North American Classics assurance that projected costs of such manufacturer do not increase beyond North American Classics' ability to survive financially, in such event would North American Classics retain its eligibility status, assuming North American Classics retains control of the functions outlined in paragraph?

We do not believe that a profit-sharing agreement per se would affect your eligibility for exemption. Were the foreign company to receive a majority share of the profits or to purchase sufficient stock in your company to give it effective control, however, we would have substantial questions about which party actually exercises primary control.

I hope this answers your questions.

SINCERELY,

North American Classics Corporation

April 15, 1981

Frank Berndt Acting Chief Counsel (NOA-30) National Highway Traffic Safety Administration

Dear Mr. Berndt:

I am writing on behalf of North American Classics Corporation, a Michigan Corporation, formed in July of 1980 for the purpose of initially engineering and designing; assembling; and marketing motor vehicles which resemble the 1957 Ford Thunderbird. In September 1980, as attorney for the Corporation, I met with Mr. Taylor Vinson of your office concerning North American Classics' project.

The purpose of this letter is to request of your office a written opinion concerning the following inquiries:

(1) Assuming North American Classics designs the total engineering of the Thunderbird reproduction; selects all components to be incorporated therein; retains primary control over quality control, testing, FMVSS compliance in design; and manufacturing assembly sequence; and markets the produced vehicles on its behalf of its customers, does North American Classics remain eligible to apply for exemption from meeting certain FMVSS requirements for this vehicle in the event that the actual responsibility for the assembly of the vehicles is contracted by North American Classics to a manufacturer which produces more than 10,000 motor vehicles per year?

(2) In the event that North American Classics enters into an agreement to have such vehicles produced or assembled by a major automotive manufacturer, who would not be so eligible, and if such agreement provides for the sharing of profits derived from the sales of the finished product between North American Classics and such manufacturer, as a means of providing North American Classics assurance that projected costs of such manufacturer do not increase beyond North American Classics' ability to survive financially, in such event would North American Classics retain its eligibility status, assuming North American Classics retains control of the functions outlined in paragraph?

As the inquiries intimate, North American Classics is considering having the actual asembly work of the vehicle completed by an automotive manufacturer that now produces more than 10,000 vehicles per twelve calendar months. It is uncertain at this time what the agreed upon terms of such an agreement might be that satisfies the interest of both parties. My primary concern in requesting an opinion is to assure myself that North American Classics does not inadvertently contract away its rights to apply for certain exemptions from FMVSS should the need to do so arise.

I thank you for your anticipated cooperation in this regard.

Thomas W. Elkins Secretary