Panoz Auto-Development Company; Receipt of Application for a Temporary Exemption From the Advanced Air Bag Requirements of FMVSS No. 208, 62038-62041 [E6-17605]
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Federal Register / Vol. 71, No. 203 / Friday, October 20, 2006 / Notices
PM1 vehicle. These functional checks
include verifying proper operation of
PM1’s actuators, and that all valves,
regulators, and avionics function
normally. During these tests, the PM1
will contain no H2O2. Blue Origin will
pressurize the PM1 helium tanks in the
VPF before moving the PM1 to a test
landing pad. A separate test, called the
‘‘flight readiness test’’, will be
performed after helium pressurization
gas has been loaded on the vehicle, just
before the vehicle is transported to the
test landing pad. At the test landing
pad, Blue Origin will load the PM1 with
H2O2 and prepare it for flight. After
landing, the PM1 and any support
equipment will be returned to a safe
condition. In accordance with this
waiver, under Blue Origin’s
experimental permit, launch begins
with pressurization of gaseous helium
bottles of the PM1 in the VPF and
includes all preparation until flight of
the vehicle.
By statute, for a suborbital rocket,
‘‘launch’’ means to place or try to place
a launch vehicle in a suborbital
trajectory, and includes activities
involved in the preparation of a launch
vehicle or payload for launch, when
those activities take place at a launch
site in the United States. 49 U.S.C.
70102(3). Chapter 701 requires FAA
authorization of Blue Origins’ launch
processing activities, by license or
permit, unless waived by the FAA. 49
U.S.C. 70104, 70105. By regulation,
launch begins with the arrival of a
launch vehicle at a U.S. launch site. 14
CFR 401.5.1
Waiver Criteria
jlentini on PROD1PC65 with NOTICES
Chapter 701 allows the FAA to waive
the requirement to obtain a license for
an individual license or experimental
permit applicant if the waiver is in the
public interest and will not jeopardize
public health and safety, safety of
property, national security and foreign
policy interests of the United States. 49
U.S.C. 70105(b)(3). 2 To assess the
impact on public health and safety and
safety of property, the FAA utilizes a
four-prong test. The FAA also addresses
any aspects of granting a waiver that
1 Under current FAA policy, the FAA does not
require Blue Origin to obtain a part 420 license for
the operation of West Texas Launch Site.
Nonetheless, although not licensed, West Texas
Launch Site is still a launch site. To the extent that
the FAA has previously suggested that a license was
required for a launch site to be a launch site, see
Waiver of License Requirement for Scaled
Composites’ Pre-flight Preparatory Activities
Conducted at a U.S. Launch Site, 69 FR 48549,
48550 (Aug. 10, 2004), that reasoning was incorrect.
2 Chapter 701 does not provide the FAA authority
to waive a permit. See id; see also 70105a(i).
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15:52 Oct 19, 2006
Jkt 211001
may have national security or foreign
policy implications.
Four-Prong Test
The four-prong test used by the FAA
was originally raised by the House
Science Committee in 1995, as guidance
to the FAA to assist it in defining
‘‘launch’’ under chapter 701. H.R. Rep.
No. 233, 104th Cong., 1st Sess., at 60
(1995). The guidance suggested that preflight activities that should be regulated
as part of a ‘‘launch’’, are those that:
1. Are closely proximate in time to
ignition or lift-off,
2. Entail critical steps preparatory to
initiating flight,
3. Are unique to space launch, and
4. Are inherently so hazardous as to
warrant AST’s regulatory oversight
under 49 U.S.C. chapter 701.
As the FAA noted in the Scaled
Waiver and in a Notice of Proposed
Rulemaking, Experimental Permits for
Reusable Suborbital Rockets, 71 FR
16251 (Mar. 31, 2006), the four-prong
test provides a rational approach to
determining whether to waive the
license requirement for launch
processing. The many hazards involved
in the processing of expendable launch
vehicles led the FAA to define launch
to begin with the arrival of a vehicle at
the launch site. Commercial Space
Transportation Licensing Regulations,
64 FR 19586, 19592 (Apr. 21, 1999);
Scaled Waiver, 69 FR at 48550. With
new technologies involving different
hazards, however, the FAA is willing to
entertain requests for waivers. There
should be no concerns if the license
requirement is waived because the
nature and existence of hazards are
addressed as part of the waiver process.
The Four-Prong Test Applied to PM1
Launch Processing
Prior to pressurization of the helium
tanks, no launch processing activities
meet all four prongs of the test. In
particular, no inherently hazardous
activities take place until pressurization.
Therefore, the FAA finds no activities
prior to pressurizing the vehicle helium
tanks require oversight by the FAA.
Storage of the helium is not hazardous
because it is inert and will not react
with any other elements or compounds
under ordinary conditions. The
unfueled PM1 presents no risk of fire,
explosion, debris, or unintended motor
flight.
National Security and Foreign Policy
Implications of PM1 Launch Processing
The FAA evaluation conducted in
support of Blue Origins’ experimental
permit concluded that there are no
issues relating to U.S. national security
PO 00000
Frm 00093
Fmt 4703
Sfmt 4703
or foreign policy interests that would
require the FAA to prevent launches of
PM1. Thus, there are no national
security or foreign policy issues
associated with the launch processing of
PM1.
Summary and Conclusion
A waiver is in the public interest
because it accomplishes the goals of
Chapter 701 and avoids unnecessary
regulation. The waiver will not
jeopardize public health and safety or
safety of property because launch
processing activities for PM1 up to
helium pressurization conducted at
West Texas Launch Site are benign to
the public. A waiver will not jeopardize
national security and foreign policy
interests of the United States.
For the foregoing reasons, the FAA
has waived the requirement for Blue
Origin to obtain a license for Blue
Origin’s launch processing until helium
pressurization conducted at West Texas
Launch Site.
Issued in Washington, DC, on October 13,
2006.
Stewart W. Jackson,
Manager, Systems Engineering and Training,
Office of the Associate Administrator for
Commercial Space Transportation.
[FR Doc. 06–8792 Filed 10–19–06; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety
Administration
[Docket No. NHTSA–2006–26109]
Panoz Auto-Development Company;
Receipt of Application for a Temporary
Exemption From the Advanced Air Bag
Requirements of FMVSS No. 208
National Highway Traffic
Safety Administration (NHTSA),
Department of Transportation (DOT).
AGENCY:
Notice of receipt of petition for
temporary exemption from provisions of
Federal Motor Vehicle Safety Standard
(FMVSS) No. 208, Occupant Crash
Protection.
ACTION:
SUMMARY: In accordance with the
procedures in 49 CFR part 555, Panoz
Auto-Development Company has
petitioned the agency for a temporary
exemption from certain advanced air
bag requirements of FMVSS No. 208.
The basis for the application is that
compliance would cause substantial
economic hardship to a manufacturer
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Federal Register / Vol. 71, No. 203 / Friday, October 20, 2006 / Notices
that has tried in good faith to comply
with the standard.1
This notice of receipt of an
application for temporary exemption is
published in accordance with the
statutory provisions of 49 U.S.C.
30113(b)(2). NHTSA has made no
judgment on the merits of the
application.
DATES: You should submit your
comments not later than November 6,
2006.
FOR FURTHER INFORMATION CONTACT: Ms.
Dorothy Nakama, Office of the Chief
Counsel, NCC–112, National Highway
Traffic Safety Administration, 400
Seventh Street, SW., Room 5219,
Washington, DC 20590. Telephone:
(202) 366–2992; Fax: (202) 366–3820.
Comments: We invite you to submit
comments on the application described
above. You may submit comments
identified by docket number at the
heading of this notice by any of the
following methods:
• Web site: https://dms.dot.gov.
Follow the instructions for submitting
comments on the DOT electronic docket
site by clicking on ‘‘Help and
Information’’ or ‘‘Help/Info.’’
• Fax: 1–(202)–493–2251.
• Mail: Docket Management Facility,
U.S. Department of Transportation, 400
Seventh Street, SW., Nassif Building,
Room PL–401, Washington, DC 20590.
• Hand Delivery: Room PL–401 on
the plaza level of the Nassif Building,
400 Seventh Street, SW., Washington,
DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal
Holidays.
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
online instructions for submitting
comments.
Instructions: All submissions must
include the agency name and docket
number. Note that all comments
received will be posted without change
to https://dms.dot.gov, including any
personal information provided.
Docket: For access to the docket in
order to read background documents or
comments received, go to https://
dms.dot.gov at any time or to Room PL–
401 on the plaza level of the Nassif
Building, 400 Seventh Street, SW.,
Washington, DC, between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays.
Privacy Act: Anyone is able to search
the electronic form of all comments
received into any of our dockets by the
name of the individual submitting the
1 To view the application, go to: https://
dms.dot.gov/search/searchFormSimple.cfm and
enter the docket number set forth in the heading of
this document.
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15:52 Oct 19, 2006
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comment (or signing the comment, if
submitted on behalf of an association,
business, labor union, etc.). You may
review DOT’s complete Privacy Act
Statement in the Federal Register
published on April 11, 2000 (Volume
65, Number 70; Pages 19477–78) or you
may visit https://dms.dot.gov.
We shall consider all comments
received before the close of business on
the comment closing date indicated
above. To the extent possible, we shall
also consider comments filed after the
closing date.
I. Advanced Air Bag Requirements and
Small Volume Manufacturers
In 2000, NHTSA upgraded the
requirements for air bags in passenger
cars and light trucks, requiring what are
commonly known as ‘‘advanced air
bags.’’ 2 The upgrade was designed to
meet the goals of improving protection
for occupants of all sizes, belted and
unbelted, in moderate-to-high-speed
crashes, and of minimizing the risks
posed by air bags to infants, children,
and other occupants, especially in lowspeed crashes.
The advanced air bag requirements
were a culmination of a comprehensive
plan that the agency announced in 1996
to address the adverse effects of air bags.
This plan also included an extensive
consumer education program to
encourage the placement of children in
rear seats. The new requirements were
phased in beginning with the 2004
model year.
Small volume manufacturers were not
subject to the advanced air bag
requirements until September 1, 2006,
but their efforts to bring their respective
vehicles into compliance with these
requirements began several years ago.
However, because the new requirements
were challenging, major air bag
suppliers concentrated their efforts on
working with large volume
manufacturers, and thus, until recently,
small volume manufacturers had
limited access to advanced air bag
technology. Because of the nature of the
requirements for protecting out-ofposition occupants, ‘‘off-the-shelf’’
systems could not be readily adopted.
Further complicating matters, because
small volume manufacturers build so
few vehicles, the costs of developing
custom advanced air bag systems
compared to potential profits
discouraged some air bag suppliers from
working with small volume
manufacturers.
The agency has carefully tracked
occupant fatalities resulting from air bag
deployment. Our data indicate that the
2 See
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62039
agency’s efforts in the area of consumer
education and manufacturers’ providing
depowered air bags were successful in
reducing air bag fatalities even before
advanced air bag requirements were
implemented.
As always, we are concerned about
the potential safety implication of any
temporary exemptions granted by this
agency. In the present case, we are
seeking comments on a petition for a
temporary exemption from the
advanced air bag requirements
submitted by a manufacturer of very
expensive, low volume, exotic sports
cars.
II. Overview of Petition for Economic
Hardship Exemption
In accordance with 49 U.S.C. 30113
and the procedures in 49 CFR part 555,
Panoz Auto-Development Company
(Panoz) has petitioned the agency for a
temporary exemption from certain
advanced air bag requirements of
FMVSS No. 208 Occupant Crash
Protection for the Panoz Esperante only.
The basis for the application is that
compliance would cause substantial
economic hardship to a manufacturer
that has tried in good faith to comply
with the standard. A copy of the
petition 3 is available for review and has
been placed in the docket for this
notice.
III. Statutory Background for Economic
Hardship Exemptions
A manufacturer is eligible to apply for
a hardship exemption if its total motor
vehicle production in its most recent
year of production did not exceed
10,000 vehicles, as determined by the
NHTSA Administrator (49 U.S.C.
30113).
In determining whether a
manufacturer of a vehicle meets that
criterion, NHTSA considers whether a
second vehicle manufacturer also might
be deemed the manufacturer of that
vehicle. The statutory provisions
governing motor vehicle safety (49
U.S.C. Chapter 301) do not include any
provision indicating that a manufacturer
might have substantial responsibility as
manufacturer of a vehicle simply
because it owns or controls a second
manufacturer that assembled that
vehicle. However, the agency considers
the statutory definition of
‘‘manufacturer’’ (49 U.S.C. 30102) to be
sufficiently broad to include sponsors,
depending on the circumstances. Thus,
3 In an e-mail message of August 17, 2006 to Otto
Matheke, Esq. of NHTSA’s Chief Counsel’s office,
the company waived confidential treatment under
49 CFR part 512 for certain business and financial
information submitted as part of its petition for
temporary exemption.
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NHTSA has stated that a manufacturer
may be deemed to be a sponsor and thus
a manufacturer of a vehicle assembled
by a second manufacturer if the first
manufacturer had a substantial role in
the development and manufacturing
process of that vehicle.
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IV. Petition of Panoz Auto-Development
Company
Panoz states that it seeks a temporary
exemption from the advanced air bag
requirements of FMVSS No. 208 only
for the Panoz Esperante, a two seat
convertible sports car. Panoz states that
‘‘[t]he Esperante is the only passenger
car currently being produced by Panoz,
a small volume manufacturer.’’ Panoz
states that it is an independent company
with no affiliation with other
automobile manufacturers.
Panoz began to sell the Esperante in
2001. The Esperante is equipped with a
driver and passenger side air bag. The
driver side air bag is supplied by Breed
and the passenger side air bag is
supplied by Ford. Panoz states that it
spent a ‘‘significant’’ amount of money
in order to comply with the ‘‘inflatable
restraint requirements’’ of FMVSS No.
208. Panoz was able to achieve
compliance with ‘‘extensive technical
support’’ from Visteon, who performed
all the calibration work on the air bag
restraint module necessary for
compliance.
Panoz stated that as a small volume
manufacturer with limited financial and
technical resources, Panoz must use
components produced by large volume
manufacturers in order to meet safety
and emissions requirements. Panoz
stated that it uses components
developed by Ford for the Ford Mustang
‘‘in order to meet the stringent
regulations.’’ Panoz’s center tub and
chassis design is based on the previous
generation Ford Mustang which Panoz
referred to as the ‘‘SN95 platform.’’ The
front chassis structure is engineered to
closely simulate the Ford Mustang crash
pulse, so that the same air bag restraint
module could be used in the Esperante,
with some calibration changes, as was
used in the Mustang. The interior space
in the Esperante was designed to be
similar to the Mustang so that the
Mustang’s relationship of the air bags to
the occupants was simulated in the
Esperante.
Panoz cited the following issues as
contributing to its inability to meet the
advanced air bag requirements of
FMVSS No. 208 by September 1, 2006:
1. Actual sales of the Esperante have
been below projected sales;
2. In Model Year 2005, a complete
change was made to the Mustang
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platform, resulting in a new S197 Ford
platform;
3. A delay in Panoz’s receiving the
necessary information from Ford
regarding the new chassis delayed
Panoz’s design and development of an
Esperante that can meet the advanced
air bag requirements;
4. Visteon declared bankruptcy and
eliminated their air bag system division;
and
5. Advanced air bag systems
components and technology are not
readily available to small volume
manufacturers. Most vendors continue
to concentrate on large volume
manufacturers.
How these issues have affected
Panoz’s inability to manufacture the
Esperante to meet the advanced air bag
requirements are discussed in the
following sections on Panoz’s
statements of economic hardship and
good faith efforts to comply.
Panoz states that while its petition is
under consideration, it will continue the
design and development of the
advanced air bag system. Panoz has
assigned engineering personnel and test
vehicles to this project and Panoz will
continue to pursue full compliance with
the requirements of FMVSS No. 208.
Panoz estimates that full compliance
with FMVSS No. 208 requirements will
be achieved before July 2009.
V. Panoz’s Statement of Economic
Hardship
Panoz has estimated that the addition
of an advanced air bag system adds
approximately $6,129 to the cost of each
vehicle. The impact of the cost increase
could reduce vehicle sales by
approximately 8 percent. Panoz stated
that as a result of development efforts
necessary to comply with the ‘‘airbag
mandate’’ 4 and with Environmental
Protection Agency and California Air
Resources Board requirements, the
manufacturer’s suggested retail price
(MSRP) of the Esperante was increased
to $121,326. As a result of the price
increase and ‘‘prevailing market
conditions,’’ Panoz stated that:
actual sales were 35 units below projections
in 2001, 30 units below projections in 2002,
72 units below projections in 2003, 77 units
below projections in 2004, 73 units below
projections in 2005, and 43 units below
projections in 2006.5
Panoz also stated: ‘‘The total
production of Panoz Esperante vehicles
4 Panoz did not specify whether it meant the
advanced air bag requirements or other FMVSS No.
208 air bag requirements.
5 Panoz did not provide actual sales figures or
production figures for the Esperante for any of these
years.
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Frm 00095
Fmt 4703
Sfmt 4703
during the past 12 months was 12 units.
The 2006 calendar-year production to
date is 10 vehicles.’’
Panoz stated that the reduced sales
revenue forced it to slow the advanced
air bag system and other programs and
decrease staff by approximately 30
percent.
Panoz cited the following
development work and modifications
related to the installation of an
advanced air bag system in the
Esperante. Panoz estimated the total
cost to adapt an advanced driver and
passenger-side air bag system within
one or two years to be $1,928,000:
1. Develop a new chassis that would
generate the same crash pulse as the
S197 Mustang ($380,000);
2. Chassis tooling ($300,000);
3. Design a new firewall and
surrounding structure in order to install
the passenger side air bag from the
Mustang ($187,000);
4. Interior tooling ($150,000);
5. Installation of the Mustang steering
column and driver side air bag
($85,000);
6. Installation of a new passenger side
seat with built-in sensors ($49,000);
7. Modifications to the vehicle wiring
harness ($65,000);
8. Low (8 mph), medium (14 mph)
and high (30 and 35 mph) speed barrier
crash testing, including the cost of test
vehicles and engineering support
(estimated at $235,000);
9. Undercarriage snag, pole snag,
rough-road testing, and engineering
support, including the cost of test
vehicles (estimated at $98,000);
10. Barrier crash tests with 3 and 6
year old dummies, including the cost of
test vehicles ($228,000);
11. Testing for out-of-position
occupant sensing ($46,000);
12. ‘‘Compliance-level’’ frontal barrier
crash tests at 30 mph, including the cost
of vehicles (estimated at $68,000); and
13. Continued evaluation of
production vehicles under varying
ambient and road conditions (estimated
at $37,000).
Panoz stated that this $1,928,000
expenditure represents a ‘‘significant
sum.’’ Panoz stated it must continue the
sale of the existing Esperante in order to
generate the revenue necessary to fund
this project. The three year extension
will provide Panoz the time necessary to
properly develop the advanced air bag
system.
If the exemption is not granted by
NHTSA, Panoz stated that it will lose:
approximately $4,226,120.00 in sales
revenues in 2006 based on the projected
annual sales of 53 units, $6,339,180.00 in
2007 based on the projected sales of 60 units,
$10,565,300.00 in 2008 based on the
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projected sale of 100 units, and
$15,847,950.00 in 2009 based on the
projected sale of 150 units.
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Panoz further stated that denial of the
petition would cause substantial
economic hardship and would keep it
from meeting the advanced air bag
requirements of FMVSS No. 208,
removing the Esperante from the U.S.
market and jeopardizing the existence of
the company. Panoz stated that a threeyear exemption would spread the
necessary expenditures to
approximately $1,928,000 divided by
thirty-six months or $53,556 per month,
which would be sustained through the
sales of Esperante vehicles.
VI. Panoz’s Statement of Good Faith
Efforts To Comply
Panoz states that the delay in the
implementation of the advanced air bag
system has mostly been due to
‘‘circumstances beyond the control of
Panoz.’’ Panoz states its intent to
‘‘provide the safest vehicles possible to
the public.’’ The three year exemption
from air bag requirements is necessary
to develop and test the ‘‘most up-to-date
airbag technology available.’’ Panoz
states that the Esperante will ‘‘remain
fully compliant with all FMVSS
standards during the extended
exemption periods with the sole
exception of the advanced air bag
requirements of standard 208.’’ Panoz
cited the following changes that must be
made to the Esperante in order to meet
the advanced air bag requirements:
1. Modify the chassis in order to
simulate the S197 Mustang crash pulse;
2. Modify the interior in order to
simulate the interior space of the S197
Mustang and the relationship between
the occupants and air bag system;
3. ‘‘Package’’ 6 the new Mustang seats
which are equipped with sensors;
4. ‘‘Package’’ the air bag system
sensors, restraint control module and
wiring harness;
5. Modify the dashboard and support
structure to install the new passenger
side air bag;
6. Install new driver side air bag;
7. Perform crash tests to determine
compliance with the Federal motor
vehicle safety standards; and
8. Validate the advanced air bag
system.
Panoz cited the following as a factor
in ‘‘significantly’’ delaying its ability to
develop an Esperante model that meets
advanced air bag requirements. Ford
introduced the new Mustang in Model
Year 2005. Panoz was scheduled to
receive a preproduction Mustang for
6 Panoz did not explain what it means by the term
‘‘package.’’
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15:52 Oct 19, 2006
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development purposes in 2004.
However, Panoz did not receive an S197
Mustang until March 2005, a delay of
approximately a year.
Panoz states that between October
2003 and July 2006, it spent 6,292 manhours and $630,000 to develop an
advanced air bag system for the
Esperante. A large portion of these
resources went into designing a new
‘‘compliant’’ chassis, with assistance
from Multimatic Corporation. The new
chassis project began before Panoz
received a new Mustang from Ford.
Development of this chassis is ongoing.
Panoz states that in addition to
expenditures relating to the installation
of an advanced air bag system, ‘‘during
this period’’ Panoz spent approximately
$1,910,000 towards compliance with
other Federal motor vehicle safety
standards and with Environmental
Protection Agency and California Air
Resources Board emissions standards.
Panoz noted that Visteon developed
and calibrated the restraint control
module installed in the Esperante.
Panoz intended to enter into a contract
with Visteon to develop the advanced
air bag system and recalibrate the air bag
restraint module for use with the
advanced air bag system. Panoz was
unable to use this option when Visteon
eliminated its air bag development
group.
Panoz stated that it began the process
of complying with advanced air bag
requirements in October 2003 by
entering into a contract with Multimatic
Corporation to develop a chassis that
simulates the crash pulse and duplicates
the interior packaging of the ‘‘S197
Mustang.’’ Panoz stated that a large
portion of the work has been
accomplished, but because of financial
constraints and inability to obtain the
necessary S197 crash pulse information,
the work has not been completed. Panoz
stated that the new chassis design
dictates that it must develop a
proprietary fuel tank that is able to work
properly with the Ford On-BoardDiagnostic system, since the new
Mustang fuel tank will not fit in the
Esperante. The new chassis also
required redesign of the suspension
system.
VII. Panoz’s Statement of Public
Interest
The petitioner put forth several
arguments in favor of a finding that the
requested exemption is consistent with
the public interest and would not have
a significant adverse impact on safety.
Specifically, Panoz states that the
Esperante is a ‘‘unique’’ car produced in
the U.S. using ‘‘100 percent U.S.
components.’’ The powertrain, climate
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Fmt 4703
Sfmt 4703
62041
control system, wiper/washer system,
and other major components are
purchased from Ford Motor Company.
Other parts are purchased from
approximately 469 different companies.
Panoz currently provides direct
employment to ‘‘35 full time employees
and one part time employee.’’ The
Panoz Esperante is currently being sold
through 20 dealers in the U.S. Panoz
states that in addition to providing
direct employment to 36 employees, ‘‘at
least 500 employees from over 469
different companies remain involved in
the Panoz project.’’
Panoz states that the Esperante
remains as the only vehicle developed
and sold in the U.S. which uses
extensive aluminum technology. Panoz
states that the Esperante is the only
vehicle to currently use molded
aluminum body panels for the entire
car. Application of aluminum
technology continues to gain strength in
the U.S. automotive industry. Several
new manufacturers have introduced
new models equipped with a large
number of aluminum components.
Panoz asserts that ‘‘[w]ith the probable
mandate for greater fuel efficiency, the
use of aluminum technology should
continue to escalate.’’ Panoz states that
the Esperante is a ‘‘showcase’’ for
aluminum technology. Several
companies have used some of the
Esperante technology in their products.
Panoz states that it is an innovator in
vehicle technology. Panoz further states
that it continues to provide the public
with ‘‘a classic alternative’’ to current
production vehicles.
VIII. Request for Comments
We are providing a 15-day comment
period, since the advanced air bag
requirements became effective for small
volume manufacturers on September 1,
2006. After considering public
comments and other available
information, we will publish a notice of
final action on the application in the
Federal Register.
Issued on: October 17, 2006.
Stephen R. Kratzke,
Associate Administrator for Rulemaking.
[FR Doc. E6–17605 Filed 10–19–06; 8:45 am]
BILLING CODE 4910–59–P
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]]>Agencies
[Federal Register Volume 71, Number 203 (Friday, October 20, 2006)]
[Notices]
[Pages 62038-62041]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-17605]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
[Docket No. NHTSA-2006-26109]
Panoz Auto-Development Company; Receipt of Application for a
Temporary Exemption From the Advanced Air Bag Requirements of FMVSS No.
208
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).
ACTION: Notice of receipt of petition for temporary exemption from
provisions of Federal Motor Vehicle Safety Standard (FMVSS) No. 208,
Occupant Crash Protection.
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SUMMARY: In accordance with the procedures in 49 CFR part 555, Panoz
Auto-Development Company has petitioned the agency for a temporary
exemption from certain advanced air bag requirements of FMVSS No. 208.
The basis for the application is that compliance would cause
substantial economic hardship to a manufacturer
[[Page 62039]]
that has tried in good faith to comply with the standard.\1\
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\1\ To view the application, go to: https://dms.dot.gov/search/
searchFormSimple.cfm and enter the docket number set forth in the
heading of this document.
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This notice of receipt of an application for temporary exemption is
published in accordance with the statutory provisions of 49 U.S.C.
30113(b)(2). NHTSA has made no judgment on the merits of the
application.
DATES: You should submit your comments not later than November 6, 2006.
FOR FURTHER INFORMATION CONTACT: Ms. Dorothy Nakama, Office of the
Chief Counsel, NCC-112, National Highway Traffic Safety Administration,
400 Seventh Street, SW., Room 5219, Washington, DC 20590. Telephone:
(202) 366-2992; Fax: (202) 366-3820.
Comments: We invite you to submit comments on the application
described above. You may submit comments identified by docket number at
the heading of this notice by any of the following methods:
Web site: https://dms.dot.gov. Follow the instructions for
submitting comments on the DOT electronic docket site by clicking on
``Help and Information'' or ``Help/Info.''
Fax: 1-(202)-493-2251.
Mail: Docket Management Facility, U.S. Department of
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401,
Washington, DC 20590.
Hand Delivery: Room PL-401 on the plaza level of the
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9
a.m. and 5 p.m., Monday through Friday, except Federal Holidays.
Federal eRulemaking Portal: Go to https://
www.regulations.gov. Follow the online instructions for submitting
comments.
Instructions: All submissions must include the agency name and
docket number. Note that all comments received will be posted without
change to https://dms.dot.gov, including any personal information
provided.
Docket: For access to the docket in order to read background
documents or comments received, go to https://dms.dot.gov at any time or
to Room PL-401 on the plaza level of the Nassif Building, 400 Seventh
Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
Privacy Act: Anyone is able to search the electronic form of all
comments received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit
https://dms.dot.gov.
We shall consider all comments received before the close of
business on the comment closing date indicated above. To the extent
possible, we shall also consider comments filed after the closing date.
I. Advanced Air Bag Requirements and Small Volume Manufacturers
In 2000, NHTSA upgraded the requirements for air bags in passenger
cars and light trucks, requiring what are commonly known as ``advanced
air bags.'' \2\ The upgrade was designed to meet the goals of improving
protection for occupants of all sizes, belted and unbelted, in
moderate-to-high-speed crashes, and of minimizing the risks posed by
air bags to infants, children, and other occupants, especially in low-
speed crashes.
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\2\ See 65 FR 30680 (May 12, 2000).
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The advanced air bag requirements were a culmination of a
comprehensive plan that the agency announced in 1996 to address the
adverse effects of air bags. This plan also included an extensive
consumer education program to encourage the placement of children in
rear seats. The new requirements were phased in beginning with the 2004
model year.
Small volume manufacturers were not subject to the advanced air bag
requirements until September 1, 2006, but their efforts to bring their
respective vehicles into compliance with these requirements began
several years ago. However, because the new requirements were
challenging, major air bag suppliers concentrated their efforts on
working with large volume manufacturers, and thus, until recently,
small volume manufacturers had limited access to advanced air bag
technology. Because of the nature of the requirements for protecting
out-of-position occupants, ``off-the-shelf'' systems could not be
readily adopted. Further complicating matters, because small volume
manufacturers build so few vehicles, the costs of developing custom
advanced air bag systems compared to potential profits discouraged some
air bag suppliers from working with small volume manufacturers.
The agency has carefully tracked occupant fatalities resulting from
air bag deployment. Our data indicate that the agency's efforts in the
area of consumer education and manufacturers' providing depowered air
bags were successful in reducing air bag fatalities even before
advanced air bag requirements were implemented.
As always, we are concerned about the potential safety implication
of any temporary exemptions granted by this agency. In the present
case, we are seeking comments on a petition for a temporary exemption
from the advanced air bag requirements submitted by a manufacturer of
very expensive, low volume, exotic sports cars.
II. Overview of Petition for Economic Hardship Exemption
In accordance with 49 U.S.C. 30113 and the procedures in 49 CFR
part 555, Panoz Auto-Development Company (Panoz) has petitioned the
agency for a temporary exemption from certain advanced air bag
requirements of FMVSS No. 208 Occupant Crash Protection for the Panoz
Esperante only. The basis for the application is that compliance would
cause substantial economic hardship to a manufacturer that has tried in
good faith to comply with the standard. A copy of the petition \3\ is
available for review and has been placed in the docket for this notice.
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\3\ In an e-mail message of August 17, 2006 to Otto Matheke,
Esq. of NHTSA's Chief Counsel's office, the company waived
confidential treatment under 49 CFR part 512 for certain business
and financial information submitted as part of its petition for
temporary exemption.
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III. Statutory Background for Economic Hardship Exemptions
A manufacturer is eligible to apply for a hardship exemption if its
total motor vehicle production in its most recent year of production
did not exceed 10,000 vehicles, as determined by the NHTSA
Administrator (49 U.S.C. 30113).
In determining whether a manufacturer of a vehicle meets that
criterion, NHTSA considers whether a second vehicle manufacturer also
might be deemed the manufacturer of that vehicle. The statutory
provisions governing motor vehicle safety (49 U.S.C. Chapter 301) do
not include any provision indicating that a manufacturer might have
substantial responsibility as manufacturer of a vehicle simply because
it owns or controls a second manufacturer that assembled that vehicle.
However, the agency considers the statutory definition of
``manufacturer'' (49 U.S.C. 30102) to be sufficiently broad to include
sponsors, depending on the circumstances. Thus,
[[Page 62040]]
NHTSA has stated that a manufacturer may be deemed to be a sponsor and
thus a manufacturer of a vehicle assembled by a second manufacturer if
the first manufacturer had a substantial role in the development and
manufacturing process of that vehicle.
IV. Petition of Panoz Auto-Development Company
Panoz states that it seeks a temporary exemption from the advanced
air bag requirements of FMVSS No. 208 only for the Panoz Esperante, a
two seat convertible sports car. Panoz states that ``[t]he Esperante is
the only passenger car currently being produced by Panoz, a small
volume manufacturer.'' Panoz states that it is an independent company
with no affiliation with other automobile manufacturers.
Panoz began to sell the Esperante in 2001. The Esperante is
equipped with a driver and passenger side air bag. The driver side air
bag is supplied by Breed and the passenger side air bag is supplied by
Ford. Panoz states that it spent a ``significant'' amount of money in
order to comply with the ``inflatable restraint requirements'' of FMVSS
No. 208. Panoz was able to achieve compliance with ``extensive
technical support'' from Visteon, who performed all the calibration
work on the air bag restraint module necessary for compliance.
Panoz stated that as a small volume manufacturer with limited
financial and technical resources, Panoz must use components produced
by large volume manufacturers in order to meet safety and emissions
requirements. Panoz stated that it uses components developed by Ford
for the Ford Mustang ``in order to meet the stringent regulations.''
Panoz's center tub and chassis design is based on the previous
generation Ford Mustang which Panoz referred to as the ``SN95
platform.'' The front chassis structure is engineered to closely
simulate the Ford Mustang crash pulse, so that the same air bag
restraint module could be used in the Esperante, with some calibration
changes, as was used in the Mustang. The interior space in the
Esperante was designed to be similar to the Mustang so that the
Mustang's relationship of the air bags to the occupants was simulated
in the Esperante.
Panoz cited the following issues as contributing to its inability
to meet the advanced air bag requirements of FMVSS No. 208 by September
1, 2006:
1. Actual sales of the Esperante have been below projected sales;
2. In Model Year 2005, a complete change was made to the Mustang
platform, resulting in a new S197 Ford platform;
3. A delay in Panoz's receiving the necessary information from Ford
regarding the new chassis delayed Panoz's design and development of an
Esperante that can meet the advanced air bag requirements;
4. Visteon declared bankruptcy and eliminated their air bag system
division; and
5. Advanced air bag systems components and technology are not
readily available to small volume manufacturers. Most vendors continue
to concentrate on large volume manufacturers.
How these issues have affected Panoz's inability to manufacture the
Esperante to meet the advanced air bag requirements are discussed in
the following sections on Panoz's statements of economic hardship and
good faith efforts to comply.
Panoz states that while its petition is under consideration, it
will continue the design and development of the advanced air bag
system. Panoz has assigned engineering personnel and test vehicles to
this project and Panoz will continue to pursue full compliance with the
requirements of FMVSS No. 208.
Panoz estimates that full compliance with FMVSS No. 208
requirements will be achieved before July 2009.
V. Panoz's Statement of Economic Hardship
Panoz has estimated that the addition of an advanced air bag system
adds approximately $6,129 to the cost of each vehicle. The impact of
the cost increase could reduce vehicle sales by approximately 8
percent. Panoz stated that as a result of development efforts necessary
to comply with the ``airbag mandate'' \4\ and with Environmental
Protection Agency and California Air Resources Board requirements, the
manufacturer's suggested retail price (MSRP) of the Esperante was
increased to $121,326. As a result of the price increase and
``prevailing market conditions,'' Panoz stated that:
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\4\ Panoz did not specify whether it meant the advanced air bag
requirements or other FMVSS No. 208 air bag requirements.
actual sales were 35 units below projections in 2001, 30 units below
projections in 2002, 72 units below projections in 2003, 77 units
below projections in 2004, 73 units below projections in 2005, and
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43 units below projections in 2006.\5\
\5\ Panoz did not provide actual sales figures or production
figures for the Esperante for any of these years.
Panoz also stated: ``The total production of Panoz Esperante
vehicles during the past 12 months was 12 units. The 2006 calendar-year
production to date is 10 vehicles.''
Panoz stated that the reduced sales revenue forced it to slow the
advanced air bag system and other programs and decrease staff by
approximately 30 percent.
Panoz cited the following development work and modifications
related to the installation of an advanced air bag system in the
Esperante. Panoz estimated the total cost to adapt an advanced driver
and passenger-side air bag system within one or two years to be
$1,928,000:
1. Develop a new chassis that would generate the same crash pulse
as the S197 Mustang ($380,000);
2. Chassis tooling ($300,000);
3. Design a new firewall and surrounding structure in order to
install the passenger side air bag from the Mustang ($187,000);
4. Interior tooling ($150,000);
5. Installation of the Mustang steering column and driver side air
bag ($85,000);
6. Installation of a new passenger side seat with built-in sensors
($49,000);
7. Modifications to the vehicle wiring harness ($65,000);
8. Low (8 mph), medium (14 mph) and high (30 and 35 mph) speed
barrier crash testing, including the cost of test vehicles and
engineering support (estimated at $235,000);
9. Undercarriage snag, pole snag, rough-road testing, and
engineering support, including the cost of test vehicles (estimated at
$98,000);
10. Barrier crash tests with 3 and 6 year old dummies, including
the cost of test vehicles ($228,000);
11. Testing for out-of-position occupant sensing ($46,000);
12. ``Compliance-level'' frontal barrier crash tests at 30 mph,
including the cost of vehicles (estimated at $68,000); and
13. Continued evaluation of production vehicles under varying
ambient and road conditions (estimated at $37,000).
Panoz stated that this $1,928,000 expenditure represents a
``significant sum.'' Panoz stated it must continue the sale of the
existing Esperante in order to generate the revenue necessary to fund
this project. The three year extension will provide Panoz the time
necessary to properly develop the advanced air bag system.
If the exemption is not granted by NHTSA, Panoz stated that it will
lose:
approximately $4,226,120.00 in sales revenues in 2006 based on the
projected annual sales of 53 units, $6,339,180.00 in 2007 based on
the projected sales of 60 units, $10,565,300.00 in 2008 based on the
[[Page 62041]]
projected sale of 100 units, and $15,847,950.00 in 2009 based on the
projected sale of 150 units.
Panoz further stated that denial of the petition would cause
substantial economic hardship and would keep it from meeting the
advanced air bag requirements of FMVSS No. 208, removing the Esperante
from the U.S. market and jeopardizing the existence of the company.
Panoz stated that a three-year exemption would spread the necessary
expenditures to approximately $1,928,000 divided by thirty-six months
or $53,556 per month, which would be sustained through the sales of
Esperante vehicles.
VI. Panoz's Statement of Good Faith Efforts To Comply
Panoz states that the delay in the implementation of the advanced
air bag system has mostly been due to ``circumstances beyond the
control of Panoz.'' Panoz states its intent to ``provide the safest
vehicles possible to the public.'' The three year exemption from air
bag requirements is necessary to develop and test the ``most up-to-date
airbag technology available.'' Panoz states that the Esperante will
``remain fully compliant with all FMVSS standards during the extended
exemption periods with the sole exception of the advanced air bag
requirements of standard 208.'' Panoz cited the following changes that
must be made to the Esperante in order to meet the advanced air bag
requirements:
1. Modify the chassis in order to simulate the S197 Mustang crash
pulse;
2. Modify the interior in order to simulate the interior space of
the S197 Mustang and the relationship between the occupants and air bag
system;
3. ``Package'' \6\ the new Mustang seats which are equipped with
sensors;
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\6\ Panoz did not explain what it means by the term ``package.''
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4. ``Package'' the air bag system sensors, restraint control module
and wiring harness;
5. Modify the dashboard and support structure to install the new
passenger side air bag;
6. Install new driver side air bag;
7. Perform crash tests to determine compliance with the Federal
motor vehicle safety standards; and
8. Validate the advanced air bag system.
Panoz cited the following as a factor in ``significantly'' delaying
its ability to develop an Esperante model that meets advanced air bag
requirements. Ford introduced the new Mustang in Model Year 2005. Panoz
was scheduled to receive a preproduction Mustang for development
purposes in 2004. However, Panoz did not receive an S197 Mustang until
March 2005, a delay of approximately a year.
Panoz states that between October 2003 and July 2006, it spent
6,292 man-hours and $630,000 to develop an advanced air bag system for
the Esperante. A large portion of these resources went into designing a
new ``compliant'' chassis, with assistance from Multimatic Corporation.
The new chassis project began before Panoz received a new Mustang from
Ford. Development of this chassis is ongoing.
Panoz states that in addition to expenditures relating to the
installation of an advanced air bag system, ``during this period''
Panoz spent approximately $1,910,000 towards compliance with other
Federal motor vehicle safety standards and with Environmental
Protection Agency and California Air Resources Board emissions
standards.
Panoz noted that Visteon developed and calibrated the restraint
control module installed in the Esperante. Panoz intended to enter into
a contract with Visteon to develop the advanced air bag system and
recalibrate the air bag restraint module for use with the advanced air
bag system. Panoz was unable to use this option when Visteon eliminated
its air bag development group.
Panoz stated that it began the process of complying with advanced
air bag requirements in October 2003 by entering into a contract with
Multimatic Corporation to develop a chassis that simulates the crash
pulse and duplicates the interior packaging of the ``S197 Mustang.''
Panoz stated that a large portion of the work has been accomplished,
but because of financial constraints and inability to obtain the
necessary S197 crash pulse information, the work has not been
completed. Panoz stated that the new chassis design dictates that it
must develop a proprietary fuel tank that is able to work properly with
the Ford On-Board-Diagnostic system, since the new Mustang fuel tank
will not fit in the Esperante. The new chassis also required redesign
of the suspension system.
VII. Panoz's Statement of Public Interest
The petitioner put forth several arguments in favor of a finding
that the requested exemption is consistent with the public interest and
would not have a significant adverse impact on safety. Specifically,
Panoz states that the Esperante is a ``unique'' car produced in the
U.S. using ``100 percent U.S. components.'' The powertrain, climate
control system, wiper/washer system, and other major components are
purchased from Ford Motor Company. Other parts are purchased from
approximately 469 different companies. Panoz currently provides direct
employment to ``35 full time employees and one part time employee.''
The Panoz Esperante is currently being sold through 20 dealers in the
U.S. Panoz states that in addition to providing direct employment to 36
employees, ``at least 500 employees from over 469 different companies
remain involved in the Panoz project.''
Panoz states that the Esperante remains as the only vehicle
developed and sold in the U.S. which uses extensive aluminum
technology. Panoz states that the Esperante is the only vehicle to
currently use molded aluminum body panels for the entire car.
Application of aluminum technology continues to gain strength in the
U.S. automotive industry. Several new manufacturers have introduced new
models equipped with a large number of aluminum components. Panoz
asserts that ``[w]ith the probable mandate for greater fuel efficiency,
the use of aluminum technology should continue to escalate.'' Panoz
states that the Esperante is a ``showcase'' for aluminum technology.
Several companies have used some of the Esperante technology in their
products. Panoz states that it is an innovator in vehicle technology.
Panoz further states that it continues to provide the public with ``a
classic alternative'' to current production vehicles.
VIII. Request for Comments
We are providing a 15-day comment period, since the advanced air
bag requirements became effective for small volume manufacturers on
September 1, 2006. After considering public comments and other
available information, we will publish a notice of final action on the
application in the Federal Register.
Issued on: October 17, 2006.
Stephen R. Kratzke,
Associate Administrator for Rulemaking.
[FR Doc. E6-17605 Filed 10-19-06; 8:45 am]
BILLING CODE 4910-59-P
