Interpretation ID: nht91-6.9

DATE: September 25, 1991

FROM: Gordon W. Didier --Butzel Long

TO: Paul Jackson Rice -- Chief Counsel, NHTSA

COPYEE: Barry Felrice; Ed Glancy

TITLE: None

ATTACHMT: Attached to letter dated 10-9-91 from Paul Jackson Rice to Gordon W. Didier (A38; CSA S501(8))

TEXT:

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decision denying ASC's petition on July 29, 1991. In that decision, the NHTSA stated that it was concerned to avoid establishing a precedent by which a major manufacturer (in this case, General Motors) could potentially transfer significant numbers of low fuel economy vehicles out of its production otherwise subject to the industry-wide fuel economy standard.

Subsequent to the NHTSA's decision, ASC has evaluated the various alternatives available. In the course of these considerations, ASC discussed with General Motors the alternative of including ASC's total 1989 and 1990 production of 4,500 of these automobiles in General Motors' corporate average fuel economy. As you may recall, the agency's correspondence to ASC on February 20, 1990, suggested that, due to the relationship between General Motors and ASC in connection with the production of these automobiles, all of ASC's production could or should be included in General Motors' calculation of its corporate average fuel economy. Further, both the proposal for decision issued by the agency on January 28, 1991, and the final decision in this matter confirm the NHTSA's position that it would allow the manufacturers under these circumstances to determine, by agreement, which of them would count a vehicle as its own.

As I advised both Barry Felrice and Ed Glancy yesterday, General Motors Corporation has now agreed to include ASC's production of the Turbo Grand Prix and Grand Prix STE Turbo four-door sedan during 1989 and 1990 in its production and corporate average fuel economy for these model years, subject to the acceptance of the NHTSA. A copy of the letter of September 25, 1991, from General Motors Corporation setting forth this agreement is enclosed. Ed Glancy confirmed to me yesterday afternoon that the NHTSA has no objection to this arrangement and will agree to an amendment of General Motors' production for model years 1989 and 1990 to include ASC's production of these automobiles and a recalculation of the corporate average fuel economy for General Motors Corporation.

Pursuant to my discussion with Ed Glancy, ASC and General Motors are communicating directly with the Environmental Protection Agency to arrange for the EPA to amend its data base and include ASC's production in the calculations for General Motors for model years 1989 and 1990. We are requesting the EPA to conclude this amendment of its records as soon as possible and make an appropriate report to the NHTSA. In this regard, the

EPA has requested a copy of a letter confirming the NHTSA approval of this arrangement. We would, therefore, appreciate receiving your written confirmation as soon as possible.

On the basis of this understanding and agreement with the NHTSA, ASC will not be filing a petition for review of the agency's decision with the U.S. court of Appeals at the end of this week. As I indicated in my telephone conversations yesterday, we appreciate your consideration and agreement to this arrangement which, ASC believes, represents a reasonable resolution under all of the circumstances.

Thank you again for your cooperation. Please call me immediately if you have any questions or if the foregoing does not correctly set forth the understanding and agreement of the NHTSA in this matter.

ATTACHMENT

September 25, 1991

Mr. Joseph D. Bator ASC, Inc. One Sunroof Center Southgate, MI 48195

Dear Mr. Bator:

Re: GM - ASC Turbo Master Production Agreement - Possible Inclusion of ASC Turbo Grand Prix Vehicles in GM's CAFE

This is to confirm that General Motors is willing to accept the transfer from ASC, Inc. to General Motors of responsibility under the CAFE law for the 1989 and 1990 Turbo Grand Prix vehicles produced pursuant to the referenced production agreement, provided that the National Highway Traffic Safety Administration (NHTSA) does not object to this transfer of CAFE responsibility. If NHTSA indicates its acceptance of such transfer, General Motors anticipates that it would submit to NHTSA a supplementary CAFE report for model years 1989 and 1990 noting the inclusion of the Turbo Grand Prix vehicles in its domestic passenger car fleets. We anticipate that the inclusion would have no effect on General Motors final CAFE numbers for those model years.

Very truly yours,

David W. Schrumpf Attorney General Motors Legal Staff