Date: March 10, 2008

DEALER RESPONSIBILITY FOR NEW VEHICLE ALTERATIONS AND INCOMPLETE VEHICLES

Overview
This letter is to remind all GM Dealers and Saturn Retailers (herein after “Dealers”) in the U.S. of the dealer’s responsibilities and requirements for certifying and labeling a new motor vehicle relative to its compliance with applicable U.S. Federal Motor Vehicle Safety Standards (FMVSS).

This information is relevant to all new vehicles on which further work (manufacturing) is to be performed, or a new vehicle that is “altered” between the time it is certified as a completed vehicle by GM, and the time that it is delivered to the first retail, fleet, or commercial customer.

According to the National Highway Traffic Safety Administration (NHTSA), these regulations are applicable to all new vehicles intended for sale in the U.S. or its territories, which include the District of Columbia, Puerto Rico, the Northern Mariana Islands, Guam, the Virgin Islands and American Samoa.

These U.S. new vehicle safety certification requirements are found in Title 49, Code of Federal Regulations (CFR), Part 567, “Certification”, and Part 568, “Vehicles Manufactured in Two or More Stages — All Incomplete, Intermediate and Final-Stage Manufacturers of Vehicles Manufactured in Two or More Stages.” Many public libraries keep a complete, up-to-date set of the CFR on file. The CFR are also available on the internet at the NHTSA website (www.nhtsa.dot.gov).

Penalties for Violations
The National Traffic and Motor Vehicle Safety Act of 1966 (“Safety Act”) and its amendments (codified as Title 49, United States Code [49 U.S.C.], Chapter 301, Motor Vehicle Safety; available on the internet at the NHTSA website [www.nhtsa.dot.gov], authorize the establishment of the U.S. Federal Motor Vehicle Safety Standards (“FMVSS”) and new vehicle safety certification requirements (reference Title 49, Code of Federal Regulations [49 CFR], Parts 567, 568 and 571), as well as other related regulations.
Penalties for noncompliance are severe. A single violation of the requirements may result in a fine of up to $6,000. For a series of related violations, the maximum possible fine is $16,375,000.

These penalties are applicable to any company that knowingly:
1. Manufactures a vehicle for sale that does not comply with all applicable Motor Vehicle Safety Standards in effect at the time the vehicle was manufactured; or
2. Offers a vehicle for sale that does not comply with all applicable Motor Vehicle Safety Standards in effect at the time the vehicle was manufactured; or
3. Sells a vehicle that does not comply with all applicable Motor Vehicle Safety Standards in effect at the time the vehicle was manufactured; or
4. Fails to provide the proper certification labels and documents for a vehicle, in the manner required; or
5. Installs or provides the required certification labels and documents in spite of knowing that the vehicle does not comply with all applicable Motor Vehicle Safety Standards.

Categories of Work Being Performed
For any dealer modifications involving permanently installed vehicle equipment on completed or incomplete vehicles, whether performed directly by the dealer, or under the contract of the dealer, the dealer should determine which category of work is being performed (see DEFINITIONS section for further details):

Vehicle Alterer: a company that alters a vehicle that was in conformity to the regulations, in such a manner that its stated weight ratings are no longer accurate, or where the company alters the vehicle otherwise than by the addition, substitution or removal of readily attachable components such as mirrors, or tire and rim assemblies, or by minor finishing operations, prior to sale. It is the responsibility of an Alterer to ensure that the “Altered Vehicle” still fully complies with all applicable safety standards and regulations.

 Incomplete Vehicle Manufacturer: a company that manufactures an incomplete vehicle by assembling components (engines, transmissions) none of which, taken separately, constitutes an incomplete vehicle;

 Intermediate Manufacturer: a company, other than an incomplete vehicle manufacturer or final-stage manufacturer, that performs manufacturing operations on an incomplete vehicle;

 Final Stage Manufacturer: a company that performs the manufacturing operations on an incomplete vehicle that turn the incomplete vehicle into a completed vehicle.

Please read each section of this letter to help identify your role and responsibility with respect to the product if you are changing it.

Complete Vehicle
The Safety Act provides in part that a person may not sell vehicles or equipment that do not comply with the applicable safety standards. All General Motors new complete motor vehicles and equipment are engineered, validated and certified to comply with these federal requirements prior to the sale and delivery of such new vehicles to your dealership (“Complete Vehicles”). Each COMPLETE vehicle leaves the GM assembly plant with a COMPLETED VEHICLE SAFETY CERTIFICATION LABEL affixed to the rear of the driver’s door, or in some cases the driver’s B-pillar.
This label is permanently affixed and provides General Motors (and /or its affiliates) as the manufacturer, the date of manufacture, the vehicle identification number (VIN), vehicle type, GAWR, GVWR, as well as the “certification statement” that the vehicle conforms to all applicable FMVSS requirements in effect on the date of the vehicle’s manufacture, at the time the vehicle left the assembly plant. Unless such a vehicle is “altered” prior to being sold, no further certification is required.

Altered Vehicle
Given the market place and the consumer demands to personalize vehicles, the purpose of this section is to highlight a few of the existing General Motors policies and procedures related to the alteration of new vehicles by dealers prior to first sale, and to remind the dealer of certain requirements and federal statutes that apply to the sale of new vehicles by manufacturers and dealers.

Some dealers are altering new vehicles and installing equipment, parts and accessories obtained from sources not authorized by General Motors. Please remember that the dealership is solely responsible for any such changes, and as explained above, the dealership selling these vehicles is responsible for making sure such vehicles still comply with the Safety Act and other applicable legal requirements.

Certain non-approved parts or assemblies, installed by the dealer or its agent not authorized by General Motors, may result in a change to the vehicle’s design characteristics and may affect the vehicle’s ability to conform to federal law in the areas of braking, tire/wheel load restrictions, ground clearances, pass-by noise, fuel economy, and emissions, just to mention a few.

As required by the Safety Act, and according to the FMVSS Regulations, if a company alters a vehicle, other than by the addition, substitution or removal of readily attachable components or by minor finishing operations, the company must ensure that the compliance label and any information labels remain on the vehicle, certify that the vehicle conforms to all applicable standards with respect to the work carried out by the company, and apply an “ALTERED” vehicle label on the vehicle. Any corporation or individual found to be contravening the Safety Act is subject to potential fines and/or imprisonment (as referenced above).

Additionally, as provided in Article 5.1.1 of the GM Dealer Sales and Service Agreement ("Dealer Agreement"), if a dealer modifies (alters) or sells a modified (altered) new Motor Vehicle, or installs any equipment, accessory, or part not supplied by General Motors, the dealer must disclose this fact on the purchase order and bill of sale, indicating that the modification, equipment, accessory or part is not warranted by General Motors. With respect to vehicle repairs, Article 7.2 of the Dealer Agreement provides that dealer will only use genuine GM or GM approved Parts and Accessories in performing warranty repairs, special policy repairs, and any other repairs paid for by General Motors. This is also addressed in the GM Service Policies and Procedures Manual, in section 1.2.4 (e). All of these existing procedures are in place to ensure the safety and satisfaction of our customers.

Incomplete Vehicle
These are traditionally provided to support the commercial and fleet customers with Chassis Cab/Incomplete Vehicles, Cargo Vans, Cutaway Vans, and specific Vans used for customization, just to mention a few. This section relates to work done on INCOMPLETE vehicles by dealers/manufacturers and outlines the requirements governing vehicles manufactured in two or more stages in order to ensure that once completed, the vehicles will conform to all applicable regulatory requirements (FMVSS).

Each INCOMPLETE vehicle is supplied from the GM Assembly Plant with a federally mandated INCOMPLETE VEHICLE DOCUMENT (IVD), which specifies the safety standards that are applicable to that INCOMPLETE vehicle, and to what extent the INCOMPLETE vehicle complies with those standards. The IVD lists the VIN, the applicable GVWR and GAWRs, and corresponding tire and rim information. This information must be entered on the INTERMEDIATE MANUFACTURER’S INFORMATION LABEL (if applicable) and the FINAL-STAGE MANUFACTURER’S VEHICLE SAFETY CERTIFICATION LABEL when the vehicle is completed, assuming that there have been no changes to the applicable components or additions to the vehicle that changed any GAWR or GVWR values.

All the information contained within the IVD document, as provided by GM, applies only to the INCOMPLETE VEHICLE as it left the GM Assembly Plant. The IVD must remain with INCOMPLETE VEHICLE (so that it is available to subsequent manufacturers) until the FINAL-STAGE MANUFACTURER affixes an appropriate VEHICLE SAFETY CERTIFICATION LABEL and should retain the original IVD document its files. If applicable, the INTERMEDIATE MANUFACTURER should make and keep a copy of the IVD document for its files.

Each INCOMPLETE vehicle leaves the GM assembly plant with an INCOMPLETE VEHICLE INFORMATION LABEL affixed to the rear of the driver’s door, or in some cases the driver’s B-pillar. This label is permanently affixed and provides GM as the INCOMPLETE VEHICLE MANUFACTURER, the date of its manufacture, the vehicle identification number (VIN), vehicle type is INC VEH, and the GAWR and GVWRs of the INCOMPLETE VEHICLE. There is no “certification statement” by GM included on this label. This label must not be removed or covered up at any time during the vehicle safety certification process.

Final Stage Manufacturer
GM Dealers ordering INCOMPLETE VEHICLES from GM will be considered the FINAL-STAGE MANUFACTURER of record, whether the vehicle is shipped directly to the dealership or “drop shipped” to a different location at the request of the dealer. The dealer must certify that the COMPLETED VEHICLE conforms to all applicable safety and federal requirements BEFORE the vehicle can be delivered to the first retail or fleet customer. If the dealer is having the work performed, then these requirements need to be passed along to their manufacturer responsible as the FINAL-STAGE MANUFACTURER.

Part of the certification includes affixing to the vehicle a FINAL-STAGE MANUFACTURER’S VEHICLE SAFETY CERTIFICATION LABEL. All other VEHICLE SAFETY CERTIFICATION LABELS and INFORMATION LABELS previously affixed by other manufacturers must not be obscured by another label or removed from the vehicle. The FINAL-STAGE MANUFACTURER should remove the IVD document and any ADDENDUM(s) documents, if applicable, from the vehicle and retain them in its permanent file.

In summary, the stages of the manufacturing process are the incomplete stage, intermediate-stage (where the vehicle remains incomplete) and the final stage, where the vehicle is completed and certified as complying with all applicable standards. The intermediate-stage may not exist if the next work performed on an incomplete vehicle is done by the final stage manufacturer to complete the vehicle.
The incomplete vehicle manufacturer must affix an information label to each incomplete vehicle. The label is to state the manufacturer’s name, month, and year, when the last manufacturing operation was performed, the vehicle identification number, the maximum GVWR intended for the completed vehicle, and the GAWR intended for each axle.
All intermediate manufacturers that perform work on the same vehicle must also affix an information label which provides the same type of information as well as a statement that it is an intermediate manufacturer. The ratings set out on the label applied by the previous manufacturer must be repeated, if there are no changes to GVWR or GAWR. The intermediate manufacturer must provide revised information on the label if changes occur.
The final-stage manufacturer is responsible for affixing the compliance label to the completed vehicle which provides the required information.
Any dealer who does work on an incomplete vehicle manufactured by General Motors may be considered an intermediate stage manufacturer under these regulations and is responsible for the requirements prescribed by these regulations. Any dealer who completes an incomplete vehicle will be considered a final stage manufacturer under these regulations and is responsible for the requirements prescribed by these regulations.


Government Safety Ratings - “Stars on Cars”
Additionally, 49 C.F.R. 375.301 requires manufacturers of vehicles with a GVWR of 10,000 pounds, or less, to include NHTSA New Car Assessment Program (NCAP) safety ratings in the "Government Safety Ratings" section of the Monroney label.

Known as “Stars on Cars,” NHTSA assigns star ratings based on NCAP test performance conducted on a rolling basis throughout the model year. For vehicles that have not been rated in one or more of the categories, "Not Rated" or "To be Rated" statements are shown in the safety ratings section of the label. Vehicles not subject to the regulation do not have a "Government Safety Ratings" section. Throughout the model year, manufacturers are required to add safety label information to Monroney labels within 30 days of receiving NCAP test results.

The Act prohibits the Monroney label from being removed or altered prior to sale to a consumer and penalties exist. For these reasons, NHTSA requires dealerships that alter covered vehicles to attach a second label adjacent to the Monroney label stating, "This vehicle has been altered. The stated star ratings on the safety label may no longer be applicable."

The rule does not specify the size or form of this label, only that it be placed as close as possible to Monroney labels on automobiles that (1) have been altered by the dealership and (2) have test results posted. Altered vehicles are previously certified completed vehicles that are modified, added to, or altered before the first retail sale or lease in a manner that affects compliance with the FMVSS, the vehicle type, or the weight rating. (See ALTERED VEHICLE section).

Disclosure of Non-GM Products & Services
Finally, this letter is to remind dealers of the importance to ensure that all retail and fleet customers, who purchase products or services, are fully informed when any or all are not supplied, authorized, marketed, or warranted by GM:

According to the Dealer Sales and Service Agreement:

“If dealer modifies or sells a modified new motor vehicle, or installs any equipment, accessory, recycled part or part not supplied by General Motors, or sells any non-General Motors service contract for a motor vehicle, dealer will disclose this fact on the purchase order and bill of sale, indicating that the modification, equipment, accessory or part is not warranted by General Motors or, in the case of a service contract, the coverage is not provided by General Motors or an affiliate.”

The dealer is required to disclose to the customer any modifications made, or parts and/or accessories installed on the vehicle that are not GM approved. To comply with these obligations, dealers should provide a copy of the DISCLOSURE OF NON-GM PRODUCTS form, to properly disclose any of the above situations for ALTERED or FINAL-STAGE MANUFACTURER vehicles. The disclosure form should be presented to the customer during the sales or service process, signed, and a copy must be kept in the dealer’s sale or service file along with copies of the purchase order and bill of sale.

In those cases where the vehicle alterations/modifications, non-GM parts and/or accessories are warranted by the installer, manufacturer, or upfitter, it is recommended that a copy of the third party warranty be presented to the customer at the time of vehicle sale or with the invoice or repair order.

Please refer to the GM Service Policies and Procedures for additional information, or contact your regional GM Sales or Service representative.


Conclusion
In conclusion, it is vitally important to General Motors and its dealers to continue to build and maintain consumer confidence in our products and services, while meeting all the applicable legal requirements. You are encouraged to seek the advice of your own legal counsel with respect to any incomplete or altered vehicle changes being performed by your dealership.

DEFINITIONS

ADDENDUM - for the purposes of U.S. regulations, means a document that contains the
INTERMEDIATE MANUFACTURER’s name and mailing address and an indication of all changes that should be made to the INCOMPLETE VEHICLE DOCUMENT to reflect changes that the INTERMEDIATE MANUFACTURER made to the INCOMPLETE VEHICLE. The ADDENDUM shall also contain a certification by the INTERMEDIATE MANUFACTURER that the statements contained in the ADDENDUM are accurate as of the date of manufacture by the INTERMEDIATE MANUFACTURER and can be used and relied on by any subsequent INTERMEDIATE MANUFACTURER(S) and the FINAL-STAGE MANUFACTURER as a basis for certification.

ALTERED VEHICLE - for the purposes of U.S. regulations, means a COMPLETED VEHICLE previously certified that has been altered other than by the addition, substitution or removal of readily attachable components, such as mirrors or tire assemblies, or by minor finishing operations such as painting, before the first purchase of the vehicle other than for resale, in such a manner as may affect the conformity of the vehicle with one or more Federal Motor Vehicle Safety Standard(s) or the validity of the vehicle’s stated weight ratings or VEHICLE TYPE classification.

ALTERER - for the proposes of U.S. regulations, means a person who alters by addition,
substitution or removal of components (other than readily attachable components) a certified vehicle before the first sale of the vehicle other than for resale. (Also see ALTERED VEHICLE.)

COMPLETED VEHICLE - for the purposes of U.S. regulations, means a vehicle that requires no further manufacturing operations to perform its intended function.

FINAL-STAGE MANUFACTURER - for the purposes of U.S. regulations, means a person who performs the manufacturing operations on an INCOMPLETE VEHICLE that it becomes a COMPLETED VEHICLE.

GROSS AXLE WEIGHT RATING (GAWR) - means the value specified by a vehicle
manufacturer as the load-carrying capacity of a single axle system (comprised of the axle,
suspension, tires, rims/wheels and other components, such as the frame rails, as
applicable), as measured at the tire-ground interface.

GROSS VEHICLE WEIGHT RATING (GVWR) - means the value (usually the sum of the GAWRs, but not necessarily) specified by a vehicle manufacturer as the loaded weight of a single vehicle, as measured at the tire-ground interface.

INCOMPLETE VEHICLE - for the purposes of U.S. regulations, means an assemblage consisting, at a minimum, of chassis (including the frame) structure, powertrain, steering system, suspension system, and braking system, in the state that those systems are to be part of the COMPLETED VEHICLE, but requires further manufacturing operations to become a COMPLETED VEHICLE.

INCOMPLETE VEHICLE DOCUMENT (IVD) - means a multiple-page document supplied by the INCOMPLETE VEHICLE MANUFACTURER that contains specific statements with regard to the vehicle safety certification status of the INCOMPLETE VEHICLE as it left the control of the INCOMPLETE VEHICLE MANUFACTURER. The IVD is used by INTERMEDIATE and/or FINAL-STAGE MANUFACTURERS during the completion of further certification procedures. The IVD should not be removed from the INCOMPLETE VEHICLE until final certification as a COMPLETED VEHICLE takes place, i.e., the FINAL-STAGE MANUFACTURER should keep the IVD.

INCOMPLETE VEHICLE MANUFACTURER - for the purposes of U.S. regulations, means a person who manufactures an INCOMPLETE VEHICLE by assembling components, none of which, taken separately, constitute an INCOMPLETE VEHICLE.

INFORMATION LABEL - means a label required by U.S. Code of Federal Regulations
Section 49 DFR 567.5. Such labels must be permanently affixed to the passenger cab of applicable vehicles in specific locations (listed later in this bulletin), and must contain specific information, in the English language, lettered in block capital letters and numerals not less than 2.4 millimeters (3/32 of an inch) high, in a color that contrasts with the label background. The labels must be of such construction that they cannot be removed without destroying or defacing them.

INTERMEDIATE MANUFACTURER - for the purposes of U.S. regulations, means a person, other than the INCOMPLETE VEHICLE MANUFACTURER or FINAL-STAGE MANUFACTURER, who performs manufacturing operations on a vehicle manufactured in two or more stages.

VEHICLE SAFETY CERTIFICATION LABEL - means the general term given to all labels used to signify vehicle compliance with the various safety certification requirements of Title 49, Code of Federal Regulations, Parts 567 and 568, in the U.S. Such labels must be permanently affixed to the passenger cab of applicable vehicles in specific locations (listed later in this bulletin), and must contain explicit statements, in the English language, lettered in block capital letters and numerals not less than 2.4 millimeters (3/32 of an inch) high, in a color that contrasts with the label background. The labels must be of such construction that they cannot be removed without destroying or defacing them.