E8-25168. Expansion of Manufacturing Authority; Subzone 15E; Kawasaki Motors Manufacturing Corp., U.S.A.; Maryville, MO (Internal Combustion Engines)

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the Greater Kansas City Foreign-Trade Zone, Inc., grantee of FTZ 15, requesting on behalf of Kawasaki Motors Manufacturing Corp., U.S.A. (KMMC), operator of FTZ Subzone 15E, KMMC plant, Maryville, Missouri, to expand the scope of KMMC's manufacturing authority to include new engine production capacity under FTZ procedures. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and section 400.28(a)(2) of the Board's regulations (15 CFR Part 400). It was formally filed on October 14, 2008.

Subzone 15E (114 acres/1.13 million sq.ft./1,100 employees) was approved by the Board in 1989 with authority granted for the manufacture of internal-combustion engines and transmissions for motorcycles, personal water craft, and all-terrain vehicles (Board Order 454, 54 FR 50257, 12-5-89). In 1991, the Board authorized an expansion of the scope of manufacturing authority under FTZ procedures to include engines for lawn/garden equipment and for additional production capacity to 500,000 units annually (Board Order 1014, 64 FR 5765, 2-5-99). The Board subsequently approved an expansion of the scope of authority to include the manufacture of diesel engines (up to 150,000 annually) and parts of industrial robots (up to 900 units annually) in 2002 (Board Order 1239 67 FR 51535, 8-8-2002) .

The applicant is now requesting authority to expand KMMC's scope of authority to include additional engine production capacity. Under the current expansion plan, production capacity at the KMMC plant will increase to 1.1 million units per year within the existing designated subzone. KMMC's manufacturing activity involves die-casting, machining, assembly, finishing, and quality control using domestic and foreign-origin materials and components. Foreign-sourced components and materials (about 8% of finished engine value) include: Tubes/pipes/hoses of plastic and rubber, spark plugs, belts, electrical components, tube/pipe fittings, fuel pumps, housings, fasteners, gaskets, flywheels, chain, rocker arms, pistons, crankshafts, connecting rods, cylinder heads, balancer shafts, manifolds, crankcases, intake/exhaust valves, flanges/spacers/grommets, starter motors, breathers, pulleys, exhaust components, carburetors, pumps, resins, cements, adhesives, plates/sheets/film of plastic, paper packaging, filters, base metal mountings, netting, articles of aluminum and zinc, fabricated steel and copper tube/wire/chain/springs, turbojets/props/turbines and parts, parts of transmissions, gears, instruments, gauges, bearings, hoses, o-rings, articles of plastic/rubber, electrical motors, and generators (duty rate range: free-12.5%, 25 ea. +3.9%).

The expanded operations will involve a continuation of KMMC's utilization of foreign-sourced materials and components. Expanded FTZ procedures could continue to exempt KMMC from customs duty payments on the foreign-origin inputs used in production for export (about 22% of shipments). On its domestic shipments, the company would be able to elect the duty free rate that applies to finished engines for the foreign-sourced components listed above. Customs duties also could possibly be deferred or reduced on foreign status production equipment.

Public comment is invited from interested parties. Submissions (original and 3 copies) shall be addressed to the Board's Executive Secretary at the following address: Office of the Executive Secretary, Room 2111, U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230-0002. The closing period for receipt of comments is December 22, 2008. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to January 5, 2009.

A copy of the application will be available for public inspection at each of the following locations: U.S. Department of Commerce Export Assistance Center, 2509 Commerce Tower, 911 Main Street, Kansas City, MO 64105; and, at the Office of the Foreign-Trade Zones Board's Executive Secretary at the address listed above. For further information, contact Pierre Duy, examiner, at: [e-mail], or [phone].

Dated: October 14, 2008.

Andrew McGilvray,

Executive Secretary.