WASHINGTON-The National Highway Traffic Safety Administration has issued a proposed rule implementing a Congressional mandate for domestic content labeling of cars and light trucks. According to the American Automobile Labeling Act passed last year, all cars and light trucks sold in the U.S. must bear prominent labels containing the following information:
The percentage of the value of the car's components that is of U.S./Canadian origin;
The names of the two countries-if other than the U.S. or Canada-that contributed at least 15 percent each of a car's total value;
The city, state (where applicable) and country of final assembly;
The country of origin for the engine; and
The country of origin for the transmission.
Japanese auto firms transplanted to the U.S. must have at least 70 percent U.S/Canadian content in the vehicles they sell in the U.S., or else have their cars labeled as having zero domestic content.
Parts suppliers must provide automakers with relevant information including the price of the component, the percentage of U.S./Canadian content and the percentage of content from other countries.
This labeling requirement is separate from that of the recently passed North American Free Trade Agreement, which phases in a requirement for all automakers to have at least 62.5 percent U.S., Canadian or Mexican content.
Although they had not closely studied the proposal itself, which appeared in the Nov. 19 Federal Register, domestic auto and auto parts makers are generally pleased with the labeling law.
The requirement ``will help gauge U.S. content levels in all vehicles sold here,'' said Lee Kadrich, government relations director of the Automotive Parts & Accessories Association. ``It will signal sales and job growth prospects in the huge U.S. parts aftermarket,'' he added, ``and predict the future health of the U.S.-owned auto industry and economy.''
Under the Congressional mandate, the law officially takes effect Oct. 1.