Interpretation ID: GM3.crs

Via Facsimile and Regular Mail

Howard A. Silverman, Esquire
General Motors Corporation
Legal Staff
Mail Code 480-106-304
Research Engineering Building
30500 Mound Road
Warren, Michigan 49090-9055

Dear Mr. Silverman:

This is in response to your letter of June 7, 2000, requesting an interpretation of the vehicle certification regulations at 49 CFR Part 567. Section 567.4(g) of those regulations prescribes the contents of the certification label that manufacturers are required to affix to new motor vehicles. One item of information that the certification label must contain is the name of the vehicle's manufacturer. Section 567.4(g)(1) provides that the "full corporate or individual name of the actual assembler of the vehicle" must be stated on the certification label, unless any of three specified exceptions apply. The only pertinent exception is the one stated at section 567.4(g)(1)(i). That section provides that "[i]f a vehicle is assembled by a corporation that is controlled by another corporation that assumes responsibility for conformity with the standards, the name of the controlling corporation may be used."

In your letter, you have asked whether General Motors Corporation's (GM's) name can appear on the certification label of the future Hummer H2. You state that GM is solely responsible for the design of this vehicle, which is based on a current GM model. You further state that GM is solely responsible for manufacturing and purchasing all of the parts used to make the vehicle, with the exception of those that you identify as "indirect materials." As described in your letter, these parts will be shipped by GM and its suppliers to an assembly plant built and operated by AM General Corporation (AMG) as a subcontractor to GM, where the vehicles will be assembled and finished. The vehicles will then be delivered to GM for inspection, acceptance, and shipment to GM dealers, which will be exclusively responsible for their sale to the public. Pursuant to a contract that it has entered with AMG, GM will provide the new vehicle warranty to dealers and customers. Your letter states that GM is further "responsible for warranty and recall campaign administration and for representing GM and AMG in connection with any requests for information and allegations about alleged safety defects or noncompliance with safety or emissions laws and regulations."

In light of these circumstances, you contend that it is appropriate for GM's name to appear on the certification label for the Hummer H2 because "GM is the 'manufacturer,' as that term is used in the certification statute," and "the assembler is 'controlled' by GM and GM has assumed responsibility for conformity with the Federal Motor Vehicle Safety Standards, as provided in 567.4(g)(1)(i)." You observe that GM's agreement with AMG provides that GM has "responsibility for product engineering related to the [Hummer H2], including but not limited to testing, certification and compliance with applicable governmental regulations and shall be considered the Original Equipment Manufacturer of the [Hummer H2]." Noting that "GM is the final decision-maker on recalls and conducts recall campaigns," you state that with respect to this vehicle, "GM has assumed responsibility for conformity with standards and the consequences of non-conformity."

You further contend that with respect to the Hummer H2, GM "controls" AMG in the sense that is contemplated within the certification regulations. Although you acknowledge that GM owns no AMG stock, you assert that GM's "control" over AMG is evidenced by the fact that under its agreement with AMG, GM is responsible not only for product engineering, but also "has the right to approve the Vehicle Assembly Specifications and Quality Control Standards." Additionally, you note that "GM has the opportunity to inspect the vehicle assembly process and to inspect vehicles before accepting them."

You note that in an October 13, 1981 letter to Paccar, Inc., this Office stated that Paccar's name could appear on the certification labels for vehicles assembled by Kenworth Mexicana, a Mexican affiliate. The letter observed that even though Paccar owned only a 49 percent interest in Kenworth Mexicana, it was responsible for the design of the vehicles produced in Mexico and exercised control over all matters relating to their compliance with safety standards. In this circumstance, the letter concluded that Paccar's name could appear on the certification label, notwithstanding its less than majority interest in the Mexican company. The letter noted that

the agency has previously stated in one of its interpretations that the "purpose of the manufacturer's designation in the certification regulations is to identify the company that has primary technical responsibility for conformity of the design and quality control of the assembly." Particularly with respect to the design aspects, Paccar meets this test.

Applying this interpretation, you suggest that NHTSA's focus should be on whether the company that seeks to have its name appear on the certification label has "primary technical responsibility" for the vehicle. You contend that "[w]hether that responsibility is established by contract or by partial ownership is not material." You observe that "GM will have total, not just primary, responsibility for conformity of the design of [the Hummer H2]," and that "GM's responsibility for these vehicles is no less than was Paccar's even though GM does not own AMG stock."

Notwithstanding the broad responsibility that you have identified GM as assuming with respect to the Hummer H2, we have concluded that GM may not be identified as the manufacturer on the certification labels to be affixed to those vehicles. In reaching this conclusion, we are principally motivated by the fact that AMG, and not GM, will be the "actual assembler" of the Hummer H2, and that GM does not "control" AMG, in the sense that it lacks any equity interest in that company. Unless GM were the "actual assembler" of the Hummer H2, or "controlled" the actual assembler, there is no basis for its name to appear on the certification label as the vehicle manufacturer under the express requirements of 49 CFR 567.4(g)(1), or under the exception to those requirements stated at 49 CFR 567.4(g)(1)(i).

In contrast to this circumstance, we observed in our letter of October 13, 1981, permitting Paccar to be identified as the manufacturer of vehicles assembled by Kenworth Mexicana, that Paccar held a 49 percent ownership interest in Kenworth Mexicana, the maximum permitted under Mexican law. We further noted that allowing Paccar to be identified as the manufacturer in this instance was in keeping with the reasons the agency had articulated for adopting the "controlling corporation exception to the requirement that the vehicle assembler's name must appear on the certification label." The letter stated that this exception was adopted

in recognition of the fact that "particularly in some foreign countries, assembly of a vehicle may be performed by a subsidiary corporation controlled by a parent that is the generally known 'nameplate company.'" The agency determined that in such a situation, "no important purpose is served by requiring the name of a lesser-known subsidiary corporation on the label." See 34 FR 11360, July 9, 1969.

Because GM owns no stock in AMG, and because both companies are domestic entities, these factors, which influenced our decision to allow Paccar to be identified as the manufacturer of vehicles assembled by Kenworth Mexicana, are not present here.

If GM wishes its name to appear on the certification label for the Hummer H2, there is nothing to preclude the label from stating that the vehicle was manufactured by AMG for GM. We are aware of circumstances in which such wording has been used on the certification labels of vehicles manufactured by one company for another. Enclosed for your reference is a copy of such a certification label, from a 1997 Ford Aspire, which identifies the vehicle as being manufactured "by Kia Motors Co. for Ford Motor Co." Please note that if the certification label states that the vehicle was manufactured by AMG for GM, AMG would have responsibility for the vehicle with respect to all requirements imposed under the Corporate Average Fuel Economy program.

If you have any further questions regarding vehicle certification, feel free to contact Coleman Sachs of my staff at 202-366-5238.

Sincerely,

Frank Seales, Jr.
Chief Counsel

Enclosure

ref:567
d.11/15/00