01-4773. Foreign-Trade Zone 39-Dallas/Fort Worth, TX; Application for Expansion of Manufacturing Authority-Subzone 39C Sanden International (USA), Inc., Facilities Wylie, Texas (Motor Vehicle Air-Conditioner Components)

A application has been submitted to the Foreign-Trade Zones Board (the Board) by the Dallas/Fort Worth International Airport Board, grantee of FTZ 39, requesting an expansion of the scope of manufacturing authority to include new manufacturing capacity under FTZ procedures and requesting authority to expand Subzone 39C at the Sanden International (USA), Inc. (Sanden), facility in Wylie, Texas. It was formally filed on February 14, 2001.

Subzone 39C was approved by the Board in 1993 with authority granted for the manufacture of air-conditioner compressors, evaporator coils, and related components (1.3 million units/year) for use in motor vehicles, trucks and heavy equipment at Sanden's manufacturing plant (95 acres/437,000 sq. ft.) in Wylie, Texas (Board Order 666, 59 FR 60, 1-3-94).

The applicant is now requesting authority to expand the subzone to include a new 13-acre site (“Miller Road” facility) with an additional 178,000 square feet of manufacturing/warehouse space located at 10710 Sanden Drive in Dallas, Texas. Under Sanden's current expansion plan, the production and warehousing area under FTZ procedures would be increased to a total of 615,000 square feet. Activity at the facilities (841 employees) involves machining and assembly of compressors, clutches, and evaporator coils. Components sourced from abroad include: clutch assemblies, crankshafts, pistons, castings, gears, heat insulators, rotor shafts/assemblies, centering balls, rings, electrical switches, coil covers, housings, fan/motor assemblies, gaskets, armature plates, rubber seals and dampers, bearings, plugs, pulleys, valves and retainers, fasteners, springs, sleeves, clamps, bushings, dust covers, caps, coil rings and windings, felt rings, and labels (duty rate range: free-9.9%), representing some 40 percent of total purchases.

FTZ procedures exempt Sanden from Customs duty payments on the foreign components used in export production (some 450,000 units/year, about 19% of total U.S. production). On its domestic sales, the company is able to choose the duty rate that applies to finished air-conditioner compressors and related components (duty free) for the foreign components noted above. Foreign status and domestic status merchandise destined for export would be exempt from certain local ad valorem inventory taxes. The request indicates that the savings from FTZ procedures will continue to help improve the facilities' 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 address below. The closing period for their receipt is April 30, 2001. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to May 14, 2001.

A copy of the application will be available for public inspection at the following location:

Office of the Executive Secretary, Foreign-Trade Zones Board, Room 4008, U.S. Department of Commerce, 14th Street & Constitution Avenue, NW, Washington, DC 20230.

Dated: February 14, 2001.

Dennis Puccinelli,

Executive Secretary.