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DEPARTMENT OF COMMERCE
Foreign-Trade Zones Board
[Docket 13-96]


Foreign-Trade Subzone 78A--Nissan Motor Manufacturing Corporation
U.S.A. (Motor Vehicles and Components); Expansion of Subzone; Smyrna,
TN

    An application has been submitted to the Foreign-Trade Zones Board
(the Board) by the Metropolitan Nashville-Davidson County Port
Authority, grantee of FTZ 78, Nashville, Tennessee, requesting
authority to expand FTZ Subzone 78A (Nissan Motor Manufacturing
Corporation U.S.A. (NMMC) plant, Smyrna, Tennessee), to include a site
in Decherd, Tennessee. 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 February 21, 1996.

    Subzone 78A was approved in 1982 for the manufacture of pickup
trucks (Board Order 190, 47 FR 16191, 4-12-82), and the scope of
manufacturing authority was expanded to include automobiles, engines
and transaxles in 1984 (Board Order 272, 49 FR 35395, 9-7-84). In 1993,
the subzone boundaries were expanded, as was the scope of authority to
manufacture under zone procedures (Board Order 632, 58 FR 18850, 3-30-
93).

    NMMC now requests that the subzone status be extended to include
its new engine/powertrain plant (currently under construction) in
Decherd (Franklin County), Tennessee, some 65 miles west of
Chattanooga. The new manufacturing facility (200,000 sq. ft. on 958
acres) will be used to produce 200,000 engines and 300,000 transaxles
annually. The engines will equip autos manufactured at NMMC's Smyrna
plant. The transaxles will be used to equip autos manufactured in
NMMC's Smyrna plant and minivans (a Ford/Nissan joint-venture vehicle)
manufactured at
Ford's Avon Lake, Ohio, plant (Subzone 40C). The application states
that the powertrain components produced at the new Decherd plant (471
employees) will displace imports of finished Nissan engines and
transaxles. Actually, NMMC already has authority to produce these items
under zone procedures within FTZ Subzone 78A (450,000 engines, 270,000
transaxles annually) for vehicles assembled at Smyrna and Avon Lake, so
this proposed subzone expansion will allow some of these items to be
produced under zone procedures at the new plant site.

    Parts and materials that would initially be sourced from abroad
include: gaskets/seals, articles of plastic and rubber, hoses, roller
chain, steel studs, fasteners, cylinder heads, connecting rods, water
pumps, filters, valves, camshafts, crankshafts, bearings, flywheels,
pulleys, spark plugs, distributors, ignition parts, clutches (and
related parts), electronic controlling apparatus, thermostats, other
parts of internal combustion engines, lubricating pumps, valve bodies,
and electronic controlling apparatus (duty rate range: free-10.8%). The
application indicates that the projected level of domestic parts
sourcing at the Decherd facility will be similar to the pattern for
motor vehicles manufactured at NMMC's Smyrna plant.

    Zone procedures would continue to exempt NMMC from Customs duty
payments on the foreign components used in production for export. On
its domestic sales, the company would be able to continue to choose the
lower duty rate that applies to finished autos (2.5%) for the foreign
inputs noted above. On finished engines and transaxles transferred to
other auto assembly subzones, duties on their foreign components could
be paid when those finished vehicles are withdrawn for Customs entry.
The application indicates that the savings from zone procedures would
help improve the Decherd 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 address below. The closing
period for their receipt is April 30, 1996. Rebuttal comments in
response to material submitted during the foregoing period may be
submitted during the subsequent 15-day period (to May 15, 1996).

    A copy of the application and the accompanying exhibits will be
available for public inspection at each of the following locations:

Office of the Port Director, U.S. Customs Service, Post Office Box
270008, 939 Airport Service Road, Nashville, TN 37227; and
Office of the Executive Secretary, Foreign-Trade Zones Board, U.S.
Department of Commerce, Room 3716, 14th Street & Pennsylvania
Avenue, NW., Washington, DC 20230

    Dated: February 22, 1996.
John J. Da Ponte, Jr.,
Executive Secretary.
[FR Doc. 96-4753 Filed 2-29-96; 8:45 am]