FTC: Made In The USA Comments Concerning Automotive Parts Rebuilders Association--P894219
September 17, 1997
Office of the Secretary
Re: Made In USA Policy Comment
This firm represents the Automotive Parts Rebuilders Association (APRA), the trade association for those companies which rebuild or remanufacture non-functioning motor vehicle parts and equipment for resale and reuse. It also represents the firms which provide used parts, called cores, to rebuilders and those which supply new parts, machinery and equipment to them. APRA has over 2,000 members worldwide, most of whom are located in the United States.
APRA submitted detailed comments on January 16, 1996 on how the "Made in the USA" issue affects motor vehicle parts rebuilders in response to FTC's October 18, 1995 request for comments on this issue. Unfortunately, the proposed guides do not address how the "Made in the USA" appellation may be used with any products which have been renewed by refurbishing or rebuilding processes to be used again. As a result, members of the motor vehicle parts rebuilding industry have no guidance on whether they can use the "Made in USA" phrase on their products or in their marketing.
As previously discussed in the January 16, 1996 letter, for most U.S. motor vehicle parts rebuilders, the entire rebuilding process occurs in the United States. The cores are obtained from U.S. sources and the rebuilder's facility is located in this country. Therefore, there is no question that the most significant processes in rebuilding, i.e. disassembling the old core, cleaning it, repairing or replacing damaged parts, assembly and inspection, all take place in the United States. The problem arises with the components used in rebuilding and in particular how to determine the source of those components.
For new and replacement components incorporated in rebuilt parts, there is no problem. In practically all cases the rebuilder can easily determine the country of origin of those parts.
However, for cores, making that determination is nearly impossible. The core, whether originally made for a domestic vehicle manufacturer like Ford, GM or Toyota, or for a foreign manufacturer, like Volvo or Hyundai, may have been made for the vehicle manufacturer in several different countries, including the United States. Thus, even before its use, identifying exactly where an individual part is produced would be difficult for anyone who does not have access to the vehicle manufacturer's records. After use, however, when the core has been in service for many years, there is no way to make that determination.
Moreover, because all cores are disassembled for cleaning and inspection and the various components stored in large holding bins where they are mixed with similar components from other cores, the components lose all of their identity as a separate unit. This intermingling of parts from numerous cores further precludes any possibility of determining the original country of origin for the components eventually used in a rebuilt part.
Furthermore, neither of the two tests enumerated in Section VIII of the proposed guides which would allow a "Made in USA" designation if less than all of the components are U.S. made, apply to a rebuilder because no "substantial transformation" of the product occurs from core to completed rebuilt part.
Therefore, unless rebuilders are to be denied using the "Made in USA" designation, the only logical step is to consider used parts as originating in the country of their use not their manufacture. The country of use can be readily determined and does not violate the intent of the "Made in the USA" designation. Because the designation is designed to inform consumers of the source for the components and services which go into a product, using the original country of manufacture for a core is actually more misleading. The original product no longer exists. The product became a "core" because it was no longer useable and was discarded. In the accounting sense, its value has been completely exhausted. The rebuilder, in effect, mines the cores from salvage yards, installers and others who would probably throw the core into the trash if the rebuilding industry did not exist. Therefore, the source of a core is its country of use not its country of original manufacture.
APRA strongly suggests that the FTC acknowledge this fact and amend the guides to deal with used parts, i.e., cores, so that they are both realistic and practical for those in recycling industries, such as motor vehicle parts rebuilders.
APRA is also uncertain whether Section X regarding U.S. origin claims for specific processes or parts has any application to rebuilding/remanufacturing. First, a rebuilder has no way of knowing if a reasonable consumer would understand the claim "Remanufactured in the USA" to refer to a specific process and not to the general manufacture of the product. While remanufacturing is a specific process and is so recognized by the industry, we do not know whether that awareness extends to the consumer.
Moreover, remanufacturing refers to all of the processes applied to the core to make it a rebuilt part and therefore is the equivalent of a general "manufacture" of a rebuild product. Therefore by saying a product is "Remanufactured in the USA" you are saying that it is made in the USA. If this is so, using the term "Remanufactured in the USA" would appear to run afoul of the proscription in Section X that consumers not understand such claims as synonymous with "Made in the USA". Indeed, by using the phrase "Remanufactured in the USA" a rebuilder would want its customer to know that the process of renewing the core does make the part one which is "Made in the USA."
APRA believes that the guides are seriously deficient in dealing with rebuilt/remanufactured products and that the FTC must address these issues in the final version of the guides (possibly be reference to FTC's guides for used and reconditioned vehicle parts (16 CFR Part 20)). APRA would be more than willing to assist in this effort.
If we can provide any further information, please do not hesitate to contact me.
Very truly yours,
Michael J. Conlon