ID: 10-001391 217

ID: nht92-9.45

DATE: January 21, 1992

FROM: William F. Russo -- Margolis, Sakayan & Holtz

TO: Steven P. Wood -- Assistant Chief Counsel for Rulemaking, NHTSA

TITLE: None

ATTACHMT: Attached to letter dated 2/18/92 from Paul Jackson Rice to William F. Russo (A39; Std. 210)

TEXT:

I am an attorney practicing in the area of automobile products liability, who is in need of your assistance in interpreting one of your agency's regulations. Specifically, I have a question concerning the definition of "Seat belt anchorage," as contained in 49 C.F.R. S 571.210 S3.

According to this provision, the definition "means the provision for transferring seat belt assembly loads to the vehicle structure." Basically, I need to know if this definition requires a motor vehicle manufacturer to include anchorage plates or similar devices in the car during the manufacturing process, or if it would be sufficient for the manufacturer to simply provide instructions to its customers and dealers on how to punch holes in a certain spot in the vehicle interior to create an anchorage location, should they wish to install the optional shoulder harness kit.

I hope I have stated my question clearly, but please feel free to call if you have any questions. Thank you for your assistance and I look forward to hearing from you.

ID: 15926.drn

Mr. Jacques Schalckens
Auto Leasing Lines, Inc., U.S.A.
2717 Seville Blvd.
Clearwater, FL 34624

Dear Mr. Schalckens:

This responds to your request for information on registering as an agent for service of process for a foreign manufacturer that wishes to import motorcycles and buses. You also wish to know about Corporate Average Fuel Economy (CAFE) requirements for the imported vehicles. The information you seek is provided below.

In a telephone conversation with Dorothy Nakama of my staff, you explained that the buses to be imported are designed to seat at least nineteen persons. Your letter requested information on "manufacturer status from D.O.T. under the small Volume Manufacturer program," which you explained refers to low volume manufacturers' exemptions from generally applicable CAFE standards.

NHTSA has established CAFE standards only for passenger cars and light trucks. Since there are no CAFE standards for motorcycles or for buses, manufacturers of motorcycles or buses need not meet CAFE standards.

I will now describe how to register as an agent for service of process for a foreign manufacturer. Prior to the assignment of a DOT identification number, the manufacturer must designate in writing, an agent who is a permanent resident of the United States upon whom all processes, notices, orders, decisions and requirements may be made. This designation and its acceptance must comply with 49 C.F.R. 551.45. The required designation should be mailed to the Office of Chief Counsel, National Highway Traffic Safety Administration, Room 5219, 400 Seventh Street, SW, Washington, DC 20590, and must include, in addition to the information already submitted, the following:

1. A certification that the designation is valid in form and binding on the manufacturer under the laws, corporate by-laws, or other requirements governing the making of the designation at the time and place where it is made;

2. The full legal name, principal place of business, and mailing address of the manufacturer;

3. Marks, trade names, or other designations of origin of any of the manufacturer's products which do not bear its name;

4. A statement that the designation shall remain in effect until withdrawn or replaced by the manufacturer;

5. A declaration of acceptance duly signed by the agent appointed, which must be a permanent resident of the United States and may be an individual, a firm, or a U.S. corporation;

6. The full legal name and address of the designated agent; and

7. The signature of one with authority to appoint the agent.

The signer's name and title should be clearly indicated beneath the signature.

I have enclosed a copy of 49 CFR 551.45 and a sample of a properly executed designation of agent for your reference. Also included is information for new manufacturers of motor vehicles and motor vehicle equipment. If you have any questions about the requirements for the appointment of an agent, please do not hesitate to contact Ms. Sharon Vaughn of my staff at (202) 366-1834.

I hope this information is helpful. If you have any questions on motor vehicle matters other than the appointment of an agent, please contact Dorothy Nakama of my staff at (202) 366-2992.

Sincerely,
John Womack
Acting Chief Counsel
Enclosure
ref:571# 531
d.10/30/97

ID: nht90-1.61

TYPE: INTERPRETATION-NHTSA

DATE: MARCH 5, 1990

FROM: R. W. SCHREYER -- SR. SALES ENGINEER, TRANSPORTATION MANUFACTURING CORP. TO: HARRY THOMPSON -- U.S. DEPARTMENT OF TRANSPORTATION, NHTSA

TITLE: NONE

ATTACHMT: ATTACHED TO LETTER DATED 4-9-90 TO R. W. SCHREYER FROM STEPHEN P. WOOD; (A35; STD. 210). ALSO ATTACHED TO LETTER DATED 12-11-89 TO FRANK BERNDT FROM JOE DABROWSKI, LETTER DATED 3-22-89 TO KEITH A. MCDOWELL FROM ERIKA Z. JONES, AND LETTER DATED 3-25-77 TO ROBERT B. KURRE, WAYNE CORPORATION, FROM FRANK BERNDT. TEXT:

Mr. Max Montgomery (State of Nevada, Dept. of Prisons) will, be procuring some prison coaches. He will be specing a Type I lap belt for passengers. Since there is no Federal Safety Standard requiring this, can you provide direction on what course of ac tion we should take. (i.e. Do we design to FMVSS Section 571.210?)

Also, please clarify test procedure in Section 571.210. Do all seats in the coach have to be tested simultaneously or can a single seat be tested at one time?

If you have any questions, please give me a call at (505) 347-2011 extension 7511.

Thank you.

ID: nht90-4.90

TYPE: Interpretation-NHTSA

DATE: December 21, 1990

FROM: Paul Jackson Rice -- Chief Counsel, NHTSA

TO: Satoshi Nishibori -- Vice President, Industry-Government Affairs, Nissan Research and Development

TITLE: None

ATTACHMT: Attached to letter dated 4-24-90 from Satoshi Nishibori to Stephen P. Wood (OCC 4709)

TEXT:

This responds to your letter seeking to confirm your understanding of the scope and application of the "captive import definition set forth at 49 CFR 533.4(b)(2), and used in specifying light truck CAFE standards.

NHTSA's regulations define a "captive import" as a light truck which is "not domestically manufactured but which is imported in the 1980 model year or thereafter by a manufacturer whose principal place of business is in the United States. The agency ado pted this definition beginning with the 1980 model year in order to prevent the standards from encouraging the increased importation of these vehicles and exportation of domestic jobs. See 43 FR 11996, March 23, 1978.

Your letter explains that you do not believe that the light trucks manufactured in the U.S. by Nissan's U.S. manufacturing subsidiary (NMM, which is jointly-owned by the parent Nissan Motor Co. Ltd. (NML) in Japan and its wholly-owned U.S. importation an d distribution subsidiary (NMC)), should be classified as captive imports. Your letter also states that light trucks imported by NMC should not be classified as captive imports. As explained below, I have concluded that neither the light trucks imported by your U.S. subsidiary, nor trucks manufactured by your U.S. manufacturing operation should be considered "captive imports."

Section 501(8) of the Motor Vehicle Information and Cost Savings Act (the Act) defines the term "manufacturer" as meaning "any person engaged in the business of manufacturing automobiles. . . ." The term "manufacture" is then defined in section 501(9) a s meaning to "produce or assemble in the customs territory of the United States, or to import."

Under these definitions, which are also used in Part 533, NMC is a manufacturer of light trucks imported for the parent company. Since NMC's principal place of business is in the U.S., one might initially conclude that all of Nissan's imported light tru cks should be classified as captive imports. However, that is not a necessary conclusion since there may be more than one manufacturer of these vehicles.

NHTSA has concluded in the past that a second person may be regarded as a manufacturer of a vehicle manufactured by another person if that second person has a sufficient role in the manufacturing process that it can be deemed the "sponsor" of the vehicle . See, for example, the enclosed February 19, 1987 interpretation to a confidential addressee.

For Nissan's imported light trucks, the act of importation is the key manufacturing activity under the statute. While NMC does the actual importing, NML is responsible for the creation and production of the vehicles imported to the U.S. It designs mode ls specifically for the U.S. market, and created NMC for the purpose of importing and marketing these vehicles. NML can be seen as "sponsoring" the importation of Nissan light trucks. Moreover, applying basic principles of the law of agency, NML, as sp onsor, may be considered the principal. It is therefore our opinion that NML and NMC are both importers of the Nissan vehicles being brought into the U.S., and hence both are manufacturers under the statute. This situation is obviously distinguished fr om circumstances where the importer is not connected with the foreign manufacturer, e.g., so called grey market importers.

NHTSA believes it is appropriate, in determining whether the vehicles are "captive imports" to look at the totality of the circumstances surrounding the production, importation and marketing of the vehicles. In this case, NML controls all aspects of the Nissan light trucks imported into the U.S. Further, NML exercises complete control over NMC, and created NMC for the purpose of importing and marketing NML's products in the U.S. Indeed, NMC exists primarily to serve NML as a conduit into the U.S. mark et.

I note that this relationship is clearly distinguished from the circumstances of the typical captive import. In lieu of producing certain vehicles in this country, a domestic manufacturer imports and markets in this country vehicles (captive imports) su pplied by a foreign manufacturer with which it has a special relationship. In such a case, the domestic manufacturer is not under control of the foreign company. Moreover, the domestic manufacturer does not serve primarily as a conduit to the U.S. mark et for the imported vehicles.

Since NML has its principal place of business in Japan, and exercises complete control over NMC, I conclude that vehicles manufactured by NML and imported into the U.S. by NMC are not captive imports. Moreover, since almost all foreign manufacturers uti lize U.S. subsidiaries to import vehicles into the U.S., any other conclusion would have the effect of making virtually all imports "captive imports," a result which would clearly be inconsistent with the agency's intent in establishing the captive impor t category.

I also agree with the statement in your letter that light trucks manufactured in the U.S. by NMM are not captive imports. While we understand that these vehicles are not "domestically manufactured" as that term is defined in the statute, neither are the y imported. The term "import" is defined in section 502(10) of the Act as meaning "to import into the customs territory of the United States." Since these vehicles are not imported, it is impossible for them to be considered captive imports.

Your letter also enclosed a copy of a letter you sent to EPA, requesting that agency's interpretation of portions of EPA'S fuel economy calculation regulations at 40 CFR Part 600. You sought clarification from EPA on the apparent inconsistency between E PA's regulations, which provide separate treatment for "domestically

produced" and "not domestically produced" light trucks, and NHTSA'S classification regulations, which distinguish only between "captive imports" and "others." You requested this agency's comments on the issues raised in the letter to EPA.

I am not in a position to comment on EPA's regulations, or on that agency's interpretation of its regulations. I will confirm, however, that NHTSA intended for different procedures to be applied to the determination of CAFE for light trucks than those f or passenger cars. The primary distinction is that under the statute, passenger cars are divided into "domestically manufactured" and "not domestically manufactured" fleets. The statute contains no comparable distinction for light trucks. However, unde r NHTSA's regulations, light trucks are divided into captive imports and "others" which encompasses all light trucks which are not captive imports. This issue is discussed in some detail in the final rule establishing the captive import definition. See , 43 FR 11995, 11998-9, March 23, 1978.

I hope you have found this information helpful. Please do not hesitate to contact this office if you have any further questions.

ID: 2779y

Satoshi Nishibori, Vice President
Industry-Government Affairs
Nissan Research and Development
Suite 902
750 17th St., N.W.
Washington, D.C. 20006

Dear Mr. Nishibori:

This responds to your letter seeking to confirm your understanding of the scope and application of the "captive import" definition set forth at 49 CFR 533.4(b)(2), and used in specifying light truck CAFE standards.

NHTSA's regulations define a "captive import" as a light truck which is "not domestically manufactured but which is imported in the 1980 model year or thereafter by a manufacturer whose principal place of business is in the United States." The agency adopted this definition beginning with the 1980 model year in order to prevent the standards from encouraging the increased importation of these vehicles and exportation of domestic jobs. See 43 FR ll996, March 23, l978.

Your letter explains that you do not believe that the light trucks manufactured in the U.S. by Nissan's U.S. manufacturing subsidiary (NMM, which is jointly-owned by the parent Nissan Motor Co. Ltd. (NML) in Japan and its wholly-owned U.S. importation and distribution subsidiary (NMC)), should be classified as captive imports. Your letter also states that light trucks imported by NMC should not be classified as captive imports. As explained below, I have concluded that neither the light trucks imported by your U.S. subsidiary, nor trucks manufactured by your U.S. manufacturing operation should be considered "captive imports."

Section 501(8) of the Motor Vehicle Information and Cost Savings Act (the Act) defines the term "manufacturer" as meaning "any person engaged in the business of manufacturing automobiles. . . ." The term "manufacture" is then defined in section 50l(9) as meaning to "produce or assemble in the customs territory of the United States, or to import."

Under these definitions, which are also used in Part 533, NMC is a manufacturer of light trucks imported for the parent company. Since NMC's principal place of business is in the U.S., one might initially conclude that all of Nissan's imported light trucks should be classified as captive imports. However, that is not a necessary conclusion since there may be more than one manufacturer of these vehicles.

NHTSA has concluded in the past that a second person may be regarded as a manufacturer of a vehicle manufactured by another person if that second person has a sufficient role in the manufacturing process that it can be deemed the "sponsor" of the vehicle. See, for example, the enclosed February 19, 1987 interpretation to a confidential addressee.

For Nissan's imported light trucks, the act of importation is the key manufacturing activity under the statute. While NMC does the actual importing, NML is responsible for the creation and production of the vehicles imported to the U.S. It designs models specifically for the U.S. market, and created NMC for the purpose of importing and marketing these vehicles. NML can be seen as "sponsoring" the importation of Nissan light trucks. Moreover, applying basic principles of the law of agency, NML, as sponsor, may be considered the principal. It is therefore our opinion that NML and NMC are both importers of the Nissan vehicles being brought into the U.S., and hence both are manufacturers under the statute. This situation is obviously distinguished from circumstances where the importer is not connected with the foreign manufacturer, e.g., so called grey market importers.

NHTSA believes it is appropriate, in determining whether the vehicles are "captive imports," to look at the totality of the circumstances surrounding the production, importation and marketing of the vehicles. In this case, NML controls all aspects of the Nissan light trucks imported into the U.S. Further, NML exercises complete control over NMC, and created NMC for the purpose of importing and marketing NML's products in the U.S. Indeed, NMC exists primarily to serve NML as a conduit into the U.S. market.

I note that this relationship is clearly distinguished from the circumstances of the typical captive import. In lieu of producing certain vehicles in this country, a domestic manufacturer imports and markets in this country vehicles (captive imports) supplied by a foreign manufacturer with which it has a special relationship. In such a case, the domestic manufacturer is not under control of the foreign company. Moreover, the domestic manufacturer does not serve primarily as a conduit to the U.S. market for the imported vehicles.

Since NML has its principal place of business in Japan, and exercises complete control over NMC, I conclude that vehicles manufactured by NML and imported into the U.S. by NMC are not captive imports. Moreover, since almost all foreign manufacturers utilize U.S. subsidiaries to import vehicles into the U.S., any other conclusion would have the effect of making virtually all imports "captive imports," a result which would clearly be inconsistent with the agency's intent in establishing the captive import category.

I also agree with the statement in your letter that light trucks manufactured in the U.S. by NMM are not captive imports. While we understand that these vehicles are not "domestically manufactured" as that term is defined in the statute, neither are they imported. The term "import" is defined in section 502(l0) of the Act as meaning "to import into the customs territory of the United States." Since these vehicles are not imported, it is impossible for them to be considered captive imports.

Your letter also enclosed a copy of a letter you sent to EPA, requesting that agency's interpretation of portions of EPA's fuel economy calculation regulations at 40 CFR Part 600. You sought clarification from EPA on the apparent inconsistency between EPA's regulations, which provide separate treatment for "domestically produced" and "not domestically produced" light trucks, and NHTSA's classification regulations, which distinguish only between "captive imports" and "others." You requested this agency's comments on the issues raised in the letter to EPA.

I am not in a position to comment on EPA's regulations, or on that agency's interpretation of its regulations. I will confirm, however, that NHTSA intended for different procedures to be applied to the determination of CAFE for light trucks than those for passenger cars. The primary distinction is that under the statute, passenger cars are divided into "domestically manufactured" and "not domestically manufactured" fleets. The statute contains no comparable distinction for light trucks. However, under NHTSA's regulations, light trucks are divided into captive imports and "others," which encompasses all light trucks which are not captive imports. This issue is discussed in some detail in the final rule establishing the captive import definition. See, 43 FR 11995, 11998-9, March 23, 1978.

I hope you have found this information helpful. Please do not hesitate to contact this office if you have any further questions.

Sincerely,

Paul Jackson Rice Chief Counsel

Enclosure ref:CSA#533 d:12/21/90

ID: 2842o

Morris East, Assistant Director
Bureau of School Transportation
State of Louisiana
P.O. Box 94064
Baton Rouge, LA 70804-9064

Dear Mr. East:

This letter responds to your request for an interpretation of certain Federal motor vehicle safety standards that apply to school buses. I apologize for the delay in this response. In your letter, you state that one of your local school systems intends to remove a bus body from "an existing chassis, and place that body onto a new chassis." You state further that the system's school bus maintenance shop would perform the work. You ask a number of questions which I shall answer in order. My answers assume that, at a minimum, the engine, drive axles, and transmission of the new chassis are new components.

Question 1: Is it permissible under the (Vehicle Safety Act as amended) for a local school board to remove the body from one school bus chassis and place that body on another school bus chassis?

The answer to this question is "yes." The Act does not prohibit a vehicle owner from altering, modifying, or manufacturing a vehicle; nor has NHTSA established such a prohibition in its regulations.

Question 2: Would this action (in Question 1) violate bus body integrity requirements of Federal Motor Vehicle Safety Standards (FMVSS) (specifically FMVSS 208, 220, 221)?

The act of removing a school bus body from one chassis and placing that body on a different chassis does not violate any Federal safety standard. However, when a person uses a new body and mixed new and used chassis components in refurbishing a vehicle, the question arises whether the vehicle is new. In past interpretations, NHTSA has applied 571.7(e) to school buses that combine a new body and either (1) mixed new and used chassis components, or (2) used chassis components from different vehicles. If a school bus is considered "new" under the criteria set out in this provision, then the person who refurbishes the vehicle must certify that the school bus meets all applicable safety standards in effect on the date the chassis was manufactured - including Standards 208, 220, and 221 if they apply - and affix a certification label under 49 CFR Part 567.

On the other hand, if an old bus body is placed on a chassis that is completely new, a different provision applies. In this case, the chassis is an incomplete vehicle. "Incomplete vehicle" is defined in 49 CFR 568.3 as:

an assemblage consisting, as a minimum, of a frame and chassis structure, power train, steering system, suspension system, and braking system, to the extent that those systems are to be part of the completed vehicle, that requires further manufacturing operations, other than the addition of readily attachable components, such as mirrors or tire and rim assemblies, or minor finishing operations such as painting, to become a completed vehicle.

When a new bus chassis meets this description, a subsequent person who adds a body- even an old body- is a final-stage manufacturer, and must certify the completed vehicle as conforming to all applicable Federal Motor Vehicle Safety Standards as of a date no earlier than the manufacturing date of the incomplete vehicle (the new chassis). (49 CFR 567.5, Requirements for Manufacturers of Vehicles Manufactured in Two or More Stages.)

Neither 571.7(e) nor Part 568 would require a person to recertify a school bus when the body and all other vehicle components are not new.

Question 3: If permitted, can the work described in (Question) 1. above be performed in the school board's maintenance shop? Can it be contracted to an automobile dealer capable of performing such work? Can the work be contracted to other motor vehicle repair shops such as body dealers or private motor vehicle repair shops?

The answer to each of these statements is "yes." Remember, though, that if the refurbished buses are considered new under the criteria discussed in Question 2, they must meet all applicable school bus safety standards in effect on the date of manufacture, and a certification label must be affixed to each refurbished vehicle to that effect.

If the refurbished buses are not "new" under these same criteria, then there is no obligation to recertify the vehicles. However, if a manufacturer, dealer, distributor, or motor vehicle repair business works on your buses, then there is restriction on what these commercial businesses can do - even if the vehicle is used. Section 108(a)(2)(A) of the Vehicle Safety Act prohibits these persons from "knowingly rendering inoperative" any device or element of design incorporated into the vehicle in compliance with an applicable Federal safety standard. Note that this restriction does not apply when the vehicle owner (e.g., a local school system) makes a modification, or if a repair facility that does not hold itself out to the public as being in the business of motor vehicle repair (e.g.. a maintenance shop that works only for the school board) makes the modification. Question 4: If the changeover is allowed, must the new unit (new chassis with used body) be re-certified to meet FMVSS requirements? If it must be re-certified, who may provide the inspection and re-certification?

As I stated in my answers to Questions 2 and 3, under certain circumstances, the vehicle must be recertified by the refurbisher. The refurbisher is responsible for the vehicle's compliance status just as any vehicle manufacturer, and must be able to show that he exercised due care in certifying the vehicle. The agency examines issues of due care on a case-by-case basis evaluating all relevant facts. This evaluation would include assessing technological limitations, availability of test equipment, the market position of the manufacturer, and most importantly, the degree of manufacturer diligence.

I hope you find this information helpful.

Sincerely,

Erika Z. Jones Chief Counsel

ref:VSA#567#568#571 d:3/16/88

ID: 1984-2.25

TYPE: INTERPRETATION-NHTSA

DATE: 07/10/84

FROM: AUTHOR UNAVAILABLE; Frank Berndt; NHTSA

TO: Collier-Keyworth Company

TITLE: FMVSS INTERPRETATION

TEXT:

Mr. Richard L. Batt Chief Engineer, Juvenile Division Collier-Keyworth Company Gardner, Massachusetts 01440

Dear Mr. Batt:

This responds to your letter of June 19, 1984, asking how the requirements of section 5.2(d) of Standard No. 209, Seat Belt Assemblies, apply to a sample child restraint belt buckle you provided the agency. You specifically asked whether the buckle would be considered a push button-release buckle or a lever-release buckle.

Your buckle would be considered a push button-release buckle since a person opens the buckle by pushing down on a specified surface. The lever-release buckle refers to a type of buckle which is opened by lifting a portion of the buckle. For example, the buckles found on airplane safety belts and some racing safety belts are lever-release buckles.

If you have any further questions, please let me know.

Sincerely,

Frank Berndt Chief Counsel

June 19, 1984

Office of Chief Counsel Mr. Steve Kratzke National Highway Traffic Safety Admin. 400 Seventh Street, S.W., Room 5219 Washington, D.C. 20950

RE: Sample Buckle

Dear Mr. Kratzke:

Thank you for taking the time to talk with me about a child restraint belt buckle.

Enclosed is a sample buckle that is only indicative of the design that we want to know about, and how it might be covered by the regulations imposed on child restraints. Please bear in mind that structural strength, corrosion resistance, and temperature resistance properties can all be addressed with alternatives to the materials that the sample buckle is made of.

What we really want to know is, does this design conform to the lever requirements of FMVSS 209? Will this design be considered to be a push button configuration, or will it be considered to be a lever configuration?

We need to know the proper designation in order to correctly design the physical shape of a newly proposed buckle.

I thank you.

Very truly yours,

COLLIER-KEYWORTH COMPANY

Richard L. Batt

Chief Engineer Juvenile Division RLB/dlc Enclosure

ID: nht90-4.49

TYPE: Interpretation-NHTSA

DATE: October 22, 1990

FROM: Paul Jackson Rice -- Chief Counsel, NHTSA

TO: William F. Canever -- Staff Attorney, Office of General Counsel, Ford Motor Company

TITLE: None

ATTACHMT: Attached to letter dated 6-1-90 from W.F. Canever to S.P. Wood; Also attached to letter dated 8-1-90 from K. DeMeter to W.F. Canever

TEXT:

This responds to your letter concerning the implications under the Corporate Average Fuel Economy ("CAFE") program of the acquisition by Ford Motor Company ("Ford") of Jaguar plc ("Jaguar"). You stated that you believe all Ford and Jaguar vehicles produ ced and imported for model year ("MY") 1989 should be placed in Ford's fleet.

As discussed below, we have concluded that Ford's acquisition of Jaguar did not take place until MY 1990. Thus, Ford and Jaguar vehicles constituted separate fleets for MY 1989. As a consequence, while the fuel economy credits earned by the combined Fo rd/Jaguar fleet in MY 1990 may be applied to reduce (or eliminate) Jaguar's CAFE shortfall in MY 1987 and later years, the credits earned by Ford in MY 1989 may not be applied to offset any Jaguar shortfall.

According to your letter, Ford publicly announced its tender offer for Jaguar shares on November 2, 1989. This occurred after Ford had obtained the agreement of the Board of Directors of Jaguar to recommend the offer. The offer document, which constitu ted the formal legal offer, was mailed on November 8. After over 50 percent of Jaguar stock had been tendered, Ford declared the tender offer "unconditional" on December 10, 1989.

You stated that during the period of negotiation, tender offer, and acceptance, and continuing through the end of calender year 1989, Ford was "manufacturing" MY 1989 vehicles. Apparently, that statement is based on your statement that a small number of MY 1989 Jaguar and Aston Martin vehicles were imported into United States "through calendar year end 1989." You argued that because Ford controlled Jaguar and the importer of Jaguar vehicles prior to the time that the last of these MY 1989 vehicles wer e imported, and because fuel economy standards apply to particular model years as a whole and not to separate parts of a model year, all Ford and Jaguar vehicles produced and imported for MY 1989 should be placed in Ford's fleet. You contended that this treatment would be consistent with that accorded Chrysler Corporation ("Chrysler") and American Motors Corporation ("AMC") for model year 1987.

We disagree with your analysis comparing your situation to that of Chrysler/AMC, given significant differences in the timing of the respective acquisitions. In a letter to Chrysler dated April 4, 1990, NHTSA stated the following:

Another issue raised by Chrysler's memorandum is whether Chrysler and AMC became the same manufacturer for fuel economy purposes for model year

1987. According to the memorandum, Chrysler agreed to acquire AMC in the spring of 1987, and the transaction closed on August 6, 1987. . . . Since Chrysler controlled AMC prior to the end of the 1987 model year, and since fuel economy standards apply t o particular model years as a whole and not to separate parts of a model year, it is our opinion that all of the vehicles produced by both Chrysler and AMC for model year 1987 shall be treated as if manufactured by the same manufacturer, i.e., placed int o one fleet. Otherwise, one or both of the manufacturers would have two separate CAFE values, pre-acquisition (or pre-control) and post-acquisition (or post-control), for the same model year.

We continue to adhere to our view that where one manufacturer acquires another during a model year, they should be deemed as the same manufacturer, with a single CAFE value, for that model year. However, in the Chrysler/AMC acquisition, all relevant asp ects of the transaction took place during the 1987 model year.

As you know, the Motor Vehicle Information and Cost Savings Act ("Act") establishes time limits within which NHTSA must establish and/or amend fuel economy standards for a given model year that are based upon the beginning of the model year. See section s 502(b) and 502(f)(2) of the Act. In interpreting those provisions, both NHTSA and the courts have concluded that the model year is traditionally thought to start approximately October 1. See In re Center for Auto Safety, 793 F.2d 1346, 1349 (D.C. Cir . 1986); 49 Fed. Reg. 22516 (May 30, 1984); 49 Fed. Reg. 41250 (October 22, 1984). See also General Motors Corporation v. NHTSA, 898 F.2d 165, 176 (D.C. Cir. 1990); Center for Auto Safety v. NHTSA, 710 F.2d 842, 847 (D.C. Cir. 1983).

In the Chrysler/AMC case, all relevant aspects of the transaction were completed well before the completion of MY 1987, i.e., September 30, 1987. Conversely, in the Ford/Jaguar transaction, Ford made its tender offer in early November 1989 and declared t he tender offer "unconditional" on December 10, 1989. These dates and any other possible date for the acquisition are clearly within the 1990 model year, which began on approximately October 1. 1989.

We recognize that manufacturers may produce or import vehicles that are designated as belonging to a particular model year after October 1 of that year. However, for purposes of deciding the model year in which one manufacturer acquires another, we have concluded that the traditional model year is the appropriate frame of reference.

This conclusion is supported by the fact that by early November 1989, the earliest date referred to in your letter, when Ford made its tender offer, it had been selling its MY 1990 models for over a month. The fact that Ford or Jaguar may have produced or imported a small number of MY 1989 cars after the date of the acquisition is not determinative, since it has always been the case that model years can overlap for a given manufacturer, and some prior model year cars may be produced after the commencem ent of a given model year. Thus, any MY 1989 Jaguar vehicles that were imported during the last three months of 1989 should be included in Jaguar's MY 1989 fleet, as they would have been had the acquisition not occurred.

I note that your letter indicated that Ford intended to file its Final 1989 Model Year Report under the CAFE program with all MY 1989 Jaguar vehicles included in Ford's fleet. You stated, however, that you would not file that Report until you received t his agency's views on the propriety of that action. For the reasons set out above, we believe that Ford and Jaguar had separate, distinct fleets in MY 1989, and that therefore separate information should be filed for that model year.

I hope that this letter adequately explains our position on these issues. If you have any questions, please do not hesitate to contact me.

ID: nht94-4.87

TYPE: INTERPRETATION-NHTSA

DATE: November 22, 1994

FROM: Robin R. Miller -- DaRosa and Miller

TO: Mary Versailles -- U.S. DOT

TITLE: RE: Elmhurst Lincoln-Mercury, Inc. v Excalibur Automobile Corporation

ATTACHMT: Attached to 1/5/95 letter from Philip R. Recht to Robin R. Miller (A43; Std. 208)

TEXT: Dear Ms. Versailles:

Please be advised that I am an attorney representing Elmhurst Lincoln-Mercury, Inc. in the above-described matter.

Below is a list of automobiles which were purchased from Excalibur Automobile Corporation by my client, Elmhurst Lincoln-Mercury, Inc. For each vehicle I have provided you with the make of the vehicle, the vehicle identification number, the production c ompletion date (or manufacture date), and the date that the automobile was sold to Elmhurst Lincoln-Mercury, Inc. Copies of invoices are included for your review.

Please provide to me all information regarding the United States Department of Transportation's regulations in effect at the time these automobiles were manufactured, specifically referencing seat belt restraint systems and air bag systems.

1. J.A.C. Cobra (Red)

VIN# 1J9CA2312RM123027

Production Completion Date - 1/10/94

Date Automobile Sold to Elmhurst - 1/19/94

2. J.A.C. Cobra (Viper Blue)

VIN# 1J9CA2314RM123028

Production Completion Date - 1/13/94

Date Automobile Sold to Elmhurst - 1/25/94

3. Excalibur Limited Edition (Ivory)

VIN# 1XAPY4324RM940019

Production Completion Date - 4/2/94

Date Automobile Sold to Elmhurst - 4/11/94 4. J.A.C. Cobra (Black)

VIN# 1XACA2312RM123047

Production Completion Date - 5/6/94

Date Automobile Sold to Elmhurst - 5/9/94

Thank you for your cooperation in this matter. Please do not hesitate in contacting me should you require further information for the above automobiles. I look forward to hearing from you in the near future.

Very truly yours,

DA ROSA AND MILLER

Robin R. Miller

(Invoices omitted.)