02-32727. Foreign-Trade Zone 98-Birmingham, AL, Application for Expansion of Manufacturing Authority, Subzone 98A-Mercedes-Benz U.S. International, Inc. (Motor Vehicles); Tuscaloosa County, AL

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the City of Birmingham, Alabama, grantee of FTZ 98, on behalf of Mercedes-Benz U.S. International, Inc. (MBUSI), operator of Subzone 98A at the MBUSI motor vehicle manufacturing plant in Tuscaloosa County, Alabama, requesting an expansion of the scope of manufacturing authority to include new manufacturing 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 the regulations of the Board (15 CFR part 400). It was formally filed on December 17, 2002.

Subzone 98A was approved in 1996 for the manufacture of up to 80,000 light-duty passenger vehicles annually at the MBUSI plant (2,000 employees/900 acres/1.7 million sq.ft.) in Tuscaloosa County (Board Order 803, 61 FR 8237, March 4, 1996).

The applicant currently requests that the scope of FTZ manufacturing authority be extended to include additional production capacity (to a total of 250,000 vehicles annually) to be added within the existing boundaries of Subzone 98A.

Parts and materials that are sourced from abroad (approximately 15-20% of total purchases) include: oil, synthetic paint, glue/adhesives, chemical products/preparations, articles of plastic and rubber tubes/hoses/plates/sheets/film/profiles/fittings, handles/knobs, gaskets/seals, o-rings, rubber belts, tires, fasteners, gasoline and diesel engines, parts of engines (cylinder heads, short blocks, connecting rods), turbo/superchargers, compressors, pumps, fans, air conditioner components, filters, fire extinguishers, pulleys, flywheels, ignition parts, bushings, dampeners, textile cases, carpet sets, glass, mirrors, catalytic converters, steel flanges/fittings, springs, brake cables, articles of copper, aluminum fasteners, clamps, locks, hinges, pneumatic cylinders, clutches (and related parts), electronic controlling apparatus, resistors, transceivers, am-fm radio/cd receivers, compact disc players, navigational systems, alarms, electric motors, generators, valves, actuators, bearings, thermostats, transmission shafts/gears/sprockets, torque converters, hubs, universal joints, drive shafts, batteries, fuses, relays, voltage regulators, conductors, fiberoptic cables, switches, printed circuit assemblies, telephonic equipment, electrical control apparatus, starters, lighting/signaling equipment, windshield wipers, defrosters, parts of infrared lamps, bumpers, seat belts, airbags and modules, body stampings, wheels, radiators, exhaust systems, steering wheels/boxes, flat panel displays, pyrometers, flow/pressure/supply meters, oxygen sensors, speedometers, tachometers, and seats (duty rate range: free—20%). The list represents an expanded scope of MBUSI's existing scope of sourcing authority.

Expanded zone procedures would continue to exempt MBUSI from Customs duty payments on the foreign components used in production for export. On its domestic sales and exports to NAFTA countries, the company can choose the lower duty rate that applies to finished passenger vehicles (2.5%) for the foreign inputs noted above. The application indicates that the savings from FTZ procedures would help improve the MBUSI plant's international competitiveness.

In accordance with the Board's regulations, a member of the FTZ Staff has been designated examiner to investigate the application and report to the Board.

Public comment on the application is invited from interested parties. Submissions (original and three copies) shall be addressed to the Board's Executive Secretary at the following addresses:

1. Submissions via Express/Package Delivery Services: Foreign-Trade Zones Board, U.S. Department of Commerce, Franklin Court Building, Suite 4100W, 1099 14th Street, NW., Washington, DC 20005; or,

2. Submissions via the U.S. Postal Service: Foreign-Trade Zones Board, U.S. Department of Commerce, FCB-4100W, 1401 Constitution Ave., NW., Washington, DC 20230.

The closing period for their receipt is February 25, 2003. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period (to March 12, 2003).

A copy of the application will be available for public inspection at the Office of the Foreign-Trade Zones Board's Executive Secretary at address No. 1 listed above.

Dated: December 17, 2002.

Dennis Puccinelli,

Executive Secretary.