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DEPARTMENT OF COMMERCE
Foreign-Trade Zones Board
[Docket 41-97]
Foreign-Trade Zone 15--Kansas City, MO; Expansion of
Manufacturing Authority--Subzone 15E; Kawasaki Motors Manufacturing
Corp., U.S.A., Plant; (Internal-Combustion Engines); Maryville,
Missouri
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 the Kawasaki Motors
Manufacturing Corp., U.S.A. (KMM), operator of FTZ Subzone 15E, KMM
plant, Maryville, Missouri, an expansion of the scope of manufacturing
authority to include new small, internal-combustion engine
manufacturing capacity under FTZ procedures within Subzone 15E. It was
formally filed on May 14, 1997.
Subzone 15E was approved by the Board in 1989 with activity granted
for the manufacture of small internal-combustion engines and
transmissions for motorcycles, personal water craft, all-terrain
vehicles, subject to certain conditions (Board Order 454, 54 FR 50257,
12-5-89). The Board authorized KMM's request for removal of the
conditions in 1992 (Board Order 560, 57 FR 4862, 2-10-92).
KMM is now constructing additional manufacturing facilities at the
Maryville plant (370 employees) and requests that its FTZ manufacturing
authority be extended to include the increased capacity. The company
plans to approximately double capacity for the manufacture of small
internal-combustion engines (up to 1,400 cc's in size), transmissions,
and related drive train components for outdoor power equipment,
motorcycles, and personal water craft. Most of the finished engines and
powertrain components are shipped to KMM's Lincoln, Nebraska, plant to
equip vehicles assembled there. The application states that the
additional production at the Maryville plant will supplant engine
production currently conducted abroad. The plant's manufacturing space
will be increased from 359,880 to 607,080 square feet within the 114-
acre plant site. The new engine manufacturing activity will involve
casting, machining, finishing, and assembly using domestic and foreign
materials and components.
The expanded operations will involve a continuation of the current
level of foreign-sourced materials and components (up to 81% of the
finished engines' ex-plant value). Components that will be sourced from
abroad include: spark plugs, belts, electrical components, fuel pumps,
housings, fasteners, gaskets, flywheels, 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,
turbojets/props/turbines and parts, parts of transmissions, gauges,
bearings, hoses, o-rings, articles of plastic/rubber, steel tube/wire/
chain/springs (HTSUS Ch. 73) (duty rate range: free--12.5%). The
application indicates that the extent of domestic sourcing of materials
and components will increase in the future.
FTZ procedures would exempt KMM from Customs duty payments on the
foreign components used in export activity (about 13% of shipments). On
its domestic sales, the company would be able to elect the duty rate
that applies to finished engines (duty free) for the foreign components
noted above. No duties would be paid on the foreign components of
finished engines and powertrain components shipped in-bond to KMM's
plant in Nebraska (Subzone 59A) until the finished ATVs are processed
for Customs entry. The application indicates that the savings from FTZ
procedures help improve KMM's international competitiveness.
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 July 28, 1997. Rebuttal comments in
response to material submitted during the foregoing period may be
submitted during the subsequent 15-day period (to August 12, 1997).
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 3716, U.S. Department of Commerce, 14th Street
& Pennsylvania Avenue, NW., Washington, DC 20230.
Dated: May 20, 1997.
John J. Da Ponte, Jr.,
Executive Secretary.
[FR Doc. 97-14081 Filed 5-28-97; 8:45 am]
BILLING CODE 3510-DS-P