Import Administration
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last update: September 2002 


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, 

    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]