Morgan Motor Company Limited; Denial of Application for a Temporary Exemption From Air Bag Provisions of Federal Motor Vehicle Safety Standard No. 208, 5099-5103 [E7-1735]

Download as PDF Federal Register / Vol. 72, No. 22 / Friday, February 2, 2007 / Notices 2000 (65 FR 19477, Apr. 11, 2000). This statement is also available at https:// dms.dot.gov. FOR FURTHER INFORMATION CONTACT: Mr. Thomas Yager, Chief, Driver and Carrier Operations Division, Office of Bus and Truck Standards and Operations, MC– PSD, Federal Motor Carrier Safety Administration, 400 Seventh Street, SW., Washington, DC 20590–0001. Telephone: 202–366–4009. E-mail: MCPSD@fmcsa.dot.gov. SUPPLEMENTARY INFORMATION: sroberts on PROD1PC70 with NOTICES Background Section 4007 of the Transportation Equity Act for the 21st Century (Pub. L. 105–178, 112 Stat. 107, June 9, 1998) amended 49 U.S.C. 31315 and 31136(e) to provide authority to grant exemptions from motor carrier safety regulations. Under its regulations, FMCSA must publish a notice of each exemption request in the Federal Register (49 CFR 381.315(a)). The Agency must provide the public an opportunity to inspect the information relevant to the application, including the conducting of any safety analyses. The Agency must also provide an opportunity for public comment on the request. The Agency reviews the safety analyses and the public comments, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the Federal Register (49 CFR 381.315(b)) with the reason for denying or, in the alternative, the specific person or class of persons receiving the exemption, and the regulatory provision or provisions from which exemption is granted. The notice must also specify the effective period of the exemption (up to 2 years), and explain the terms and conditions of the exemption. The exemption may be renewed (49 CFR 381.300(b)). Request for Exemption Quality Driveaway, Inc. (Quality) is a registered motor carrier whose principal office is located in Goshen, Indiana. It provides extensive transportation services to manufacturers of various types of motor vehicles, including motor homes, tractors, trucks, and buses, and has more than 750 drivers delivering vehicles in a driveaway-towaway operation. A ‘‘driveaway-towaway operation’’ is defined in 49 CFR 390.5 as ‘‘an operation in which an empty or unladen motor vehicle with one or more sets of wheels on the surface of the roadway is being transported: VerDate Aug<31>2005 16:13 Feb 01, 2007 Jkt 211001 (1) Between vehicle manufacturer’s facilities; (2) Between a vehicle manufacturer and a dealership or purchaser; (3) Between a dealership, or other entity selling or leasing the vehicle, and a purchaser or lessee; (4) To a motor carrier’s terminal or repair facility for the repair of disabling damage (as defined in § 390.5) following a crash; or (5) To a motor carrier’s terminal or repair facility for repairs associated with the failure of a vehicle component or system; or (6) By means of a saddle-mount or tow-bar.’’ Quality was recently awarded a contract to transport buses in a driveaway-towaway operation from a manufacturing facility in Lafayette, Georgia, to purchasers. Quality uses approximately 300 experienced drivers to meet its contractual requirements. The Federal hours-of-service (HOS) regulations for commercial motor vehicle (CMV) drivers in 49 CFR 395.5 apply to motor carriers and drivers operating passenger-carrying vehicles. According to FMCSA’s regulatory guidance, a driver of a CMV ‘‘designed or used to transport * * * passengers* * *’’ (49 CFR 390.5 definition of CMV) would be considered to be passenger-carrying regardless of whether there were actually any passengers in the vehicle. This prevents a requirement for drivers to switch to the HOS rules for property-carrying vehicles each time the bus becomes empty. However, this also means that drivers of the empty buses Quality delivers (drives) from the manufacturer to the dealer are always subject to the HOS rules for passenger vehicles. Quality states that, given the variety of vehicles it delivers, its drivers are currently required to be familiar with HOS regulations applicable to property and passenger-carrying vehicles. Not only is compliance with these two sets of regulations difficult for the drivers, it is also extremely complex for Quality to audit the drivers’ records of duty status (RODS) to ensure compliance because the applicable regulatory standard could change on every trip. Quality submits that it does not make any ‘‘regulatory common sense’’ to apply the passenger-carrying HOS rule when the new bus is being delivered in a driveaway-towaway operation from a point of manufacture to a dealer, because there are never any passengers on the vehicle. Furthermore, unless the request for an exemption is granted, Quality will continue to be confronted with having to comply with two different sets of HOS regulations for a PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 5099 significant class of its drivers, and also have to audit two different sets of RODS. Quality therefore requests that the ‘‘described class’’ of drivers be granted an exemption from 49 CFR 395.5 when these drivers are delivering new buses without passengers from a point of manufacture in a driveaway-towaway operation. A copy of Quality’s exemption application is in the docket identified at the beginning of this notice. Request for Comments In accordance with 49 U.S.C. 31315(b)(4) and 31136(e), FMCSA requests public comment on Quality’s application an exemption from 49 CFR 395.5. The Agency will consider all comments received by close of business on March 5, 2007. Comments will be available for examination in the docket at the location listed under the ‘‘ADDRESSES’’ section of this notice. The Agency will file comments received after the comment closing date in the public docket, and will consider them to the extent practicable. In addition to late comments, FMCSA will also continue to file, in the public docket, relevant information that becomes available after the comment closing date. Interested persons should monitor the public docket for new material. Issued on: January 26, 2007. John H. Hill, Administrator. [FR Doc. E7–1750 Filed 2–1–07; 8:45 am] BILLING CODE 4910–EX–P DEPARTMENT OF TRANSPORTATION National Highway Traffic Safety Administration [Docket No. NHTSA–2006–25592] Morgan Motor Company Limited; Denial of Application for a Temporary Exemption From Air Bag Provisions of Federal Motor Vehicle Safety Standard No. 208 National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT). ACTION: Denial of application for a temporary exemption from air bag provisions of Federal Motor Vehicle Safety Standard No. 208, Occupant Crash Protection. AGENCY: SUMMARY: This notice denies the petition of Morgan Motor Company, Limited (Morgan) for a temporary exemption from the air bag requirements of Federal Motor Vehicle Safety Standard (FMVSS) No. 208, E:\FR\FM\02FEN1.SGM 02FEN1 5100 Federal Register / Vol. 72, No. 22 / Friday, February 2, 2007 / Notices Occupant Crash Protection, for the Morgan ‘‘traditional roadster’’ from September 2006 through September 2009. The basis of the application is that compliance would cause substantial economic hardship to a manufacturer that states it has tried in good faith to comply with the standard. NHTSA notes that Morgan has known since 1997 that it could not procure more air bags, but provided no evidence of attempts to secure an alternate source of air bags. In accordance with the requirements of 49 U.S.C. 30113(b)(2), we published a Federal Register document on August 15, 2006 announcing receipt of Morgan’s application. Ms. Dorothy Nakama in the Office of Chief Counsel, NCC–112, (Phone: 202–366– 2992; Fax 202–366–3820). FOR FURTHER INFORMATION CONTACT: SUPPLEMENTARY INFORMATION: I. Background sroberts on PROD1PC70 with NOTICES Founded in 1909, Morgan is a small, privately-owned vehicle manufacturer producing approximately 600 specialty sports cars per year.1 Morgan manufactures several models, but at present, only sells the Aero 8 in the U.S. Morgan intended to produce a vehicle line specific to the U.S. market, with Ford supplying the engine and transmission. However, for technical reasons, the project did not come to fruition, and Morgan temporarily stopped selling vehicles in the U.S. in 2004. In May 2005, Morgan obtained a temporary exemption from this agency’s bumper standard and began selling the Aero 8 in the U.S. On July 12, 2006 (71 FR 39386), NHTSA published a notice of receipt of five applications for temporary exemptions from the advanced air bag requirements 2 of Federal Motor Vehicle Safety Standard (FMVSS) No. 208, Occupant Crash Protection. Among these petitions was an October 4, 2005 one from Morgan, for the Aero 8, which is discussed at pages 39390–39391. Morgan’s petition is included in the 1 A manufacturer is eligible to apply for a hardship exemption if its total motor vehicle production in its most recent year of production does not exceed 10,000, as determined by the NHTSA Administrator (15 U.S.C. 1410(d)(1)). 2 In 2000, NHTSA upgraded the requirements for air bags in passenger cars and light trucks, requiring what are commonly known as ‘‘advanced air bags.’’ 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. See 65 FR 30680 (May 12, 2000) (Docket No. NHTSA–2000–7013). VerDate Aug<31>2005 16:13 Feb 01, 2007 Jkt 211001 docket for that notice, i.e., Docket NHTSA–2006–25324. That notice of receipt did not address a second request by Morgan. In correspondence dated February 6, 2006, Morgan petitioned for an exemption for a different vehicle, its ‘‘traditional roadster,’’ from all air bag requirements in FMVSS No. 208 (i.e., the standard’s requirement that vehicles be equipped with air bags as well as the advanced air bag requirements) from September 2006 through September 2009. That company titled this correspondence ‘‘Supplement to Pending Morgan Part 555 Temporary Exemption.’’ Morgan explained that it did not file a petition for the traditional roadster at the same time as it petitioned for the Aero 8 because in October 2005 (when the Aero 8 petition was filed), Morgan planned to sell only the Aero 8 in the U.S. from September 2006– September 2009. The company did not plan to sell the traditional roadster during that period because the Rover engine used in the U.S. version of the traditional roadster for 35 years was no longer able to meet more stringent U.S. emissions standards. In late 2005, Morgan found a U.S.certified Ford V6 engine for the U.S. traditional roadster and built a limited production run of 80 vehicles. The traditional roadster ‘‘immediately sold out.’’ In order to maintain U.S. sales and to produce revenue, Morgan then decided to continue to sell the U.S. traditional roadster. However, while the traditional roadster had had a mechanical Breed standard air bag system (i.e., non-advanced air bag system) since 1996, those air bags are now out of production and are no longer available. Morgan indicated that the final limited production run of 80 vehicles using the Ford V6 engine used the last of these air bag systems. In addition, Morgan stated that the Aero 8 standard air bag system cannot be fitted to the traditional roadster because the interiors and chassis are completely different. We note that in its February 2006 correspondence, Morgan asked that its exemption requests for the traditional roadster and Aero 8 be considered independently. On September 7, 2006 (71 FR 52851), NHTSA issued its determinations of five manufacturers petitioning for temporary exemptions from the advanced air bag requirements of Standard No. 208. Morgan’s Aero 8 petition was addressed at pages 52862– 52865. As noted above, NHTSA upgraded the requirements for air bags in 2000 to require advanced air bags in passenger cars and light trucks. The advanced air bag requirements were a culmination of PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 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 (i.e., original vehicle manufacturers producing or assembling fewer than 5,000 vehicles annually for sale in the United States) 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 complex 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 indicated above, for its traditional roadster, Morgan is requesting an exemption not only from the advanced air bag requirements, but also from the standard’s requirements for air bags altogether. As always, we are concerned about the potential safety implications of any temporary exemptions granted by this agency. II. Morgan’s Statement of Economic Hardship In accordance with 49 U.S.C. 30113 and the procedures in 49 CFR Part 555, Morgan petitioned NHTSA for a temporary exemption from standard and advanced air bag requirements of FMVSS No. 208. The basis for its application is that compliance would cause substantial economic hardship to a manufacturer that has tried in good faith to comply with the standard. The agency closely examines and considers the information provided by E:\FR\FM\02FEN1.SGM 02FEN1 Federal Register / Vol. 72, No. 22 / Friday, February 2, 2007 / Notices sroberts on PROD1PC70 with NOTICES manufacturers in support of these factors and in addition, pursuant to 49 U.S.C. 30113(b)(3)(A), determines whether an exemption is in the public interest and consistent with 49 U.S.C. Chapter 301. Morgan stated that without the sales of the U.S. traditional roadster from September 2006–September 2009, it would lose an additional $315,000 on top of the losses estimated in the October 2005 petition for the Aero.3 It further stated that if it were able to sell the traditional roadster in the U.S. during that period, ‘‘the resulting revenues would also be critical to funding the development of the new advanced air bag for use in all Morgan vehicles destined for the U.S. after September 2009.’’ Morgan’s previous financial submission indicates that the company’s losses over the last 5 years have totaled more than $3,600,000. In 2004, Morgan made a small profit for the first time in three years. Morgan predicted a net loss for fiscal year 2005. Morgan stated that even adding the projected sales of the traditional roadster, the total U.S. ‘‘exempted-car sales’’ forecast for September 2006– September 2009 remain about the same: for 2006, 50 vehicles; for 2007, 250 vehicles; for 2008, 250 vehicles; and for 2009, 250 vehicles. Morgan also provided information on the sales of the 80 model year 2005 traditional roadsters (with the Ford V6 engine). We note that in commenting on the agency’s July 2006 notice concerning its request for a temporary exemption for the Aero 8, Morgan indicated that the temporary exemptions it was seeking would involve 400 Aero 8s over three years, and 400 traditional roadsters over three years. III. Morgan’s Statement of Good Faith Efforts to Comply In its October 2005 submission, Morgan stated that it has been working with the air bag supplier Siemens to develop an advanced air bag system for the Aero 8. However, a lack of funds and technical problems precluded the implementation of an advanced air bag system for the Aero 8. It said that the minimum time needed to develop an advanced air bag system (provided that there is a source of revenue) is 2 years. Specific technical challenges include the following matters. Morgan does not have access to the necessary sensor technology to pursue the ‘‘full suppression’’ passenger air bag option. 3 Estimated to be between $3,196,179 and $5,066,938. When costs for interior redesign, crash cars, and tooling are included, the estimate rises to between $5,648,679 and $7,519,438. (See 71 FR at 39391.) VerDate Aug<31>2005 16:13 Feb 01, 2007 Jkt 211001 Due to the design of the Aero 8 platform dashboard, an entirely new interior solution and design must be developed. Chassis modifications are anticipated due to the originally stiff chassis design. In its February 2006 petition, Morgan stated that it cannot install air bags in the U.S. traditional roadsters expected to be built between September 2006 and September 2009, even though the Aero 8 vehicles built during that period will have standard air bags. Morgan provided two reasons why the traditional roadster ‘‘cannot have air bags’’ even though the Aero 8 can. First, since 1996, the traditional roadsters have had a mechanical Breed standard air bag system. In 1997, Breed stopped production of the air bags fitted to the traditional roadsters. Thus, these bags are no longer available. Morgan states that it cannot obtain any more components. The final run of the 80 traditional roadsters with the Ford V6 engine used the last of the air bag systems. Second, the Aero 8 standard air bag system cannot be fitted into the traditional roadster because the interiors and chassis are completely different. Morgan asserts that it would not be possible to integrate the Aero 8 air bag components into the traditional roadster’s design because of both physical and operational differences. The Aero 8 air bag steering wheel will not fit in the traditional roadster’s design, and the Aero 8 passenger air bag will not fit into the traditional roadster’s instrument panel. In terms of air bag operation, to use the Aero 8 system in the traditional roadster, there would have to be a new deployment control/ trigger system developed due to the significantly different crash pulses between the Aero 8 aluminum tub and the traditional roadster steel chassis. Morgan stated that the traditional roadster will have an advanced air bag system at the same time that the Aero 8 will. At present, the traditional roadster uses the same design as it has had since 1936, a steel chassis with a wooden frame for the body panels. As part of the development of the advanced air bag system, Morgan plans to switch the traditional roadster onto the aluminum tub chassis used by the Aero 8. In this way, the advanced air bag program (through Siemens) that Morgan outlined in its Part 555 exemption petition for the Aero 8 will also be applicable to the traditional roadster. Morgan believes that when its advanced air bag system is ready in 2009, the air bag system will simultaneously be installed in both the Aero and traditional roadster models. Morgan asserts that it ‘‘obviously cannot expend PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 5101 the resources to develop an air bag system—advanced or standard’’ for the traditional roadster that is separate from the air bag system being developed for the Aero 8. Morgan cites this inability as the reason why there cannot be an interim standard air bag system for the traditional roadster during the period September 2006–September 2009. IV. Morgan’s Statement of Public Interest In its original petition, which concerned the Aero 8, Morgan made several arguments supporting its view that the requested exemption is consistent with the public interest. According to Morgan, if the exemption were denied and Morgan stopped U.S. sales, Morgan’s U.S. dealers would unavoidably have numerous lay-offs, resulting in some loss of jobs in the U.S. Denial of an exemption would reduce consumer choice in the specialty sports car market sector in which Morgan cars compete. That company argued further that the Morgan vehicles would not be used extensively by owners, and would be unlikely to carry small children. Finally, according to Morgan, granting an exemption would assure the continued availability of proper parts and service support for existing Morgan owners. Without an exemption, Morgan would be forced out of the U.S. market, making it difficult for Morgan dealers to support existing customers. We note that in its February 2006 correspondence requesting an exemption for the traditional roadster, Morgan generally did not discuss whether or how these arguments would apply to its request concerning the traditional roadster. We invited Morgan to address this issue. As indicated above, Morgan did argue that revenues from selling the traditional roadster would be critical to funding the development of the new advanced air bag for use in all Morgan vehicles destined for the U.S. after September 2009. V. Notice of Receipt of Petition and Public Comments On August 15, 2006 (71 FR 46974) (Docket No. NHTSA–2006–25592), NHTSA published a Notice of Receipt of Application for a Temporary Exemption from Air Bag Provisions of Federal Motor Vehicle Safety Standard No. 208, and asked for public comment. In response, NHTSA received two sets of comments, both from Morgan and both undated. In the first set of comments, Morgan compared its petition with the grant of a Part 555 advanced air bag exemption to Ferrari (see 71 FR 29389, May 22, E:\FR\FM\02FEN1.SGM 02FEN1 5102 Federal Register / Vol. 72, No. 22 / Friday, February 2, 2007 / Notices sroberts on PROD1PC70 with NOTICES 2006). Morgan stated that, like Ferrari, its product cycles must last longer than those typical in the industry. Morgan also stated that, as did Ferrari, it made a good faith effort, but could not find a practicable way to meet the air bag requirements. Morgan stated that its air bag supplier went out of business, which resulted in a lack of components. Morgan concluded that it needed the exemption in order to implement a new advanced air bag system on a new chassis. Morgan also commented on the safety implications of granting the petition and provided additional points on why granting Morgan’s petitions would be ‘‘in the public interest.’’ Finally, Morgan updated its 2004 and 2005 financial statements as follows. Morgan’s original submission indicated that in 2004, Morgan made a ‘‘profit of 372,504 pounds.’’ It was subsequently determined that Morgan showed a loss of 11,207 pounds (approximately $21,000). Morgan explained that the difference resulted from ‘‘certain vehicle sales that in fact did not materialize.’’ Morgan further stated that although it earlier stated that ‘‘the results predicted * * * for 2005 were a small loss of £3,248’’ (approximately $6,000), the final accounts showed a larger loss of £386,140 (approximately $723,000). Morgan explained that the difference arises out of the amortization of additional R & D costs. In the second set of comments, Morgan compared its petition to that of Saleen, which recently received a oneyear extension of a complete air bag exemption, which was a partial grant of Saleen’s petition for extension for three more years. Morgan stated that its petition differed from that of Saleen, which already had five years under a complete air bag exemption when it asked for an initial exemption. Morgan stressed that it was petitioning for an initial exemption, not an extension, and for a period of time that is ‘‘half the total number of exemption years that Saleen has now received.’’ Morgan also once again emphasized that it made good faith efforts to meet the air bag requirements, citing again that it used an air bag system that was in production for eight years, which can no longer be used because the supplier went out of business. Morgan also stated that the fact that it can no longer source components for its already existing air bag system further distinguishes Morgan from Saleen. VI. Agency Decision NHTSA denies Morgan’s petition for the ‘‘traditional roadster.’’ Morgan has informed NHTSA that the traditional roadster will have the same advanced VerDate Aug<31>2005 16:13 Feb 01, 2007 Jkt 211001 air bag system as the Aero 8 in 2009, when the traditional roadster’s chassis will be modified to accommodate the advanced air bag system. In the following discussion, NHTSA focuses on Morgan’s attempts to secure a standard air bag for its traditional roadsters for September 2006– September 2009. In the background information regarding Morgan’s attempts to secure both the standard and advanced air bags, Morgan states that its last source of standard air bags was in 1997 from Breed. Since Breed no longer manufactures the standard air bags, they are no longer available. In late 2005, after it found a U.S.-certified Ford V6 engine for the U.S. traditional roadster, Morgan built a limited production run of 80 traditional roadsters, installing in them the last of the Breed standard air bags. Morgan informs us that the standard air bag system on its Aero 8 cannot be fitted to the traditional roadster because the interiors and chassis are completely different. In its petition, Morgan simply states that it ‘‘obviously cannot expend the resources to develop an air bag system— advanced or standard’’ for the traditional roadster that is separate from the air bag system being developed for the Aero 8. It appears that Morgan had no plans to sell the traditional roadster in the U.S. after 1997. It appears that it was only in late 2005, when Morgan equipped U.S.-certified engine vehicles with the last of the standard air bags and had better than expected sales that it decided to attempt to reintroduce the traditional roadster into the U.S. market. However, the agency has no information indicating that Morgan attempted to find a new source for the standard air bag. Although Morgan may not have been able to develop its own standard air bag system for the traditional roadster, it did not describe any contacts it made with potential suppliers of standard air bags, or provide quotations (even on a confidential basis) from possible sources that would be qualified to develop standard air bags for the traditional roadster. Without this information, NHTSA is unable to determine the extent of the economic hardship it would cause Morgan to procure standard air bags in the Aero 8. In its comments, Morgan compared its petition with those of Ferrari and Saleen (which received a one year temporary exemption out of the three years for which it petitioned). The major difference between Morgan’s petition and those of Ferrari and Saleen is that Morgan’s petition lacks the detail provided by Ferrari and Saleen describing how each company attempted to secure alternate sources of PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 air bags, and how much it would cost each company, if a source were available. In its petition, Ferrari provided the following: 1. Chronological analysis of Ferrari’s efforts to comply, showing the relationship to the rulemaking history of the advanced air bag requirements. 2. Itemized costs of each component that would have to be modified in order to achieve compliance. 3. Discussion of alternative means of compliance and reasons for rejecting these alternatives. 4. List of air bag suppliers that were approached in hopes of procuring necessary components. * * * 6. Corporate balance sheets for the past 3 years, and projected balance sheets if the petition is denied.4 In its petition dated January 24, 2006, Saleen cited by name the air bag developers and suppliers it approached about assisting Saleen in developing an advanced air bag system (see page 3 of the petition). Saleen also provided pursuant to 49 CFR Part 555.6(a)(1), ‘‘Engineering and financial information demonstrating in detail how compliance or failure to obtain an exemption would cause substantial economic hardship,’’ and included information such as the vehicle components that would have to be modified to accommodate an air bag system (pages 3–4), and the itemized costs to modify each component (page 4). Because Morgan did not provide a similar level of detail about the efforts it undertook to find alternative sources of a standard air bag and costs that would be entailed in modifying the traditional roadster to accommodate a standard air bag, NHTSA was unable to conclude that meeting the air bag requirements for Morgan would ‘‘cause substantial economic hardship to a manufacturer that has tried to comply with the standard in good faith.’’ Finally, NHTSA notes that in the August 15, 2006 notice of receipt of Morgan’s application for a temporary exemption for the traditional roadster, we invited Morgan to address the issue of how granting Morgan’s petition for exemption for the traditional roadster would be in the public interest. We noted that all the public interest arguments raised in the August 2006 notice were taken from Morgan’s petition for the Aero 8. Morgan did not respond to NHTSA’s request on this 4 See Ferrari S.p.A. and Ferrari North America, Inc. Grant of Application for a Temporary Exemption from S14.2. of Federal Motor Vehicle Safety Standard No. 208 (71 FR 29389, May 22, 2006) (Docket No. NHTSA–2005–23093), at page 29390. E:\FR\FM\02FEN1.SGM 02FEN1 Federal Register / Vol. 72, No. 22 / Friday, February 2, 2007 / Notices issue, and did not provide an independent basis for the agency’s determining how granting Morgan’s petition for the traditional roadster would be in the public interest. Authority: 49 U.S.C. 30113; delegations of authority at 49 CFR 1.50. and 501.8. Issued on: January 30, 2007. Nicole R. Nason, Administrator. [FR Doc. E7–1735 Filed 2–1–07; 8:45 am] BILLING CODE 4910–59–P DEPARTMENT OF THE TREASURY Submission for OMB Review; Comment Request January 26, 2007. sroberts on PROD1PC70 with NOTICES The Department of the Treasury has submitted the following public information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104–13. Copies of the submission(s) may be obtained by calling the Treasury Bureau Clearance Officer listed. Comments regarding this information collection should be addressed to the OMB reviewer listed and to the Treasury Department Clearance Officer, Department of the Treasury, Room 11000, 1750 Pennsylvania Avenue, NW., Washington, DC 20220. DATES: Written comments should be received on or before March 5, 2007 to be assured of consideration. Internal Revenue Service (IRS) OMB Number: 1545–1566. Type of Review: Extension. Title: Notice 97–66, Certain Payments Made Pursuant to a Securities Lending Transaction. Description: Notice 97–66 modifies final regulations which are effective November 14, 1997. The Notice relaxes the statement requirement with respect to substitute interest payments relating to securities loans and repurchased transactions. It also provides a withholding mechanism to eliminate excessive withholding on multiple payments in a chain of substitute dividend payments. Respondents: Businesses and other for-profit institutions. Estimated Total Burden Hours: 61,750 hours. OMB Number: 1545–1224. Type of Review: Extension. Title: INTL–112–88 (Final) Allocation and Apportionment of Deduction for State Income Taxes. Description: This regulation provides guidance on when and how the VerDate Aug<31>2005 16:13 Feb 01, 2007 Jkt 211001 deduction for state income taxes is to be allocated and apportioned between gross income from sources within and without the United States in order to determine the amount of taxable income from those sources. The reporting requirements in the regulation affect those taxpayers claiming foreign tax credits who elect to use an alternative method from that described in the regulation to allocate and apportion deductions for state income taxes. Respondents: Businesses and other for-profit institutions. Estimated Total Burden Hours: 1,000 hours. OMB Number: 1545–0159. Title: Annual Return To Report Transactions With Foreign Trusts and Receipts of Certain Foreign Gifts. Type of Review: Extension. Form: 352. Description: Form 3520 is filed by U.S. persons who create a foreign trust, transfer property to a foreign trust, receive a distribution from a foreign trust, or receive a large gift from a foreign source. IRS uses the form to identify the U.S. persons who may have transactions that may trigger a taxable event in the future. Respondents: Businesses and other for-profit institutions. Estimated Total Burden Hours: 71,742 hours. OMB Number: 1545–1458. Title: REG–209835–86 (formerly INTL–933–86) (Final) Computation of Foreign Taxes Deemed Paid Under Section 902 Pursuant to a Pooling Mechanism for Undistributed Earnings and Foreign Taxes. Type of Review: Extension. Description: These regulations provide rules for computing foreign taxes deemed paid under section 902. The regulations affect foreign corporations and their U.S. corporate shareholders. Respondents: Businesses or other forprofit institutions. Estimated Total Burden Hours: 1 hour. OMB Number: 1545–1856. Title: Consent To Disclosure of Return Information. Type of Review: Extension. Form: 13362. Description: The Consent Form is provided to external applicant that will allow the Service the ability to conduct tax checks to determine if an applicant is suitable for employment once they are determined qualified and within reach to receive an employment offer. Respondents: Federal Government. Estimated Total Burden Hours: 7,664 hours. PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 5103 OMB Number: 1545–1093. Title: IA–56–87 and IA–53–87 Final Minimum Tax—Tax Benefit Rule. Type of Review: Extension. Description: Section 58(h) of the 1954 Internal Revenue Code provides that the Secretary shall provide for adjusting tax preference items where such items provided no tax benefit for any taxable year. This regulation provides guidance for situations where tax preference items provided no tax benefit because of available credits and describes how to claim a credit or refund of minimum tax paid on such preferences. Respondents: Businesses and other for-profit institutions. Estimated Total Burden Hours: 40 hours. OMB Number: 1545–1871. Title: REG–122379–02 Regulations Governing Practice Before the Internal Revenue Service. Type of Review: Extension. Description: These disclosures will ensure that taxpayers are provided with adequate information regarding the limits of tax shelter advice that they receive, and also ensure that practitioners properly advise of taxpayers of relevant information with respect to tax shelter opinions. Respondents: Businesses and other for-profit institutions. Estimated Total Burden Hours: 13,333 hours. Clearance Officer: Glenn P. Kirkland, (202) 622–3428, Internal Revenue Service, Room 6516, 1111 Constitution Avenue, NW., Washington, DC 20224. OMB Reviewer: Alexander T. Hunt, (202) 395–7316, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503. Robert Dahl, Treasury PRA Clearance Officer. [FR Doc. E7–1687 Filed 2–1–07; 8:45 am] BILLING CODE 4830–01–P DEPARTMENT OF THE TREASURY Internal Revenue Service Quarterly Publication of Individuals, Who Have Chosen To Expatriate, as Required by Section 6039G Internal Revenue Service (IRS), Treasury. ACTION: Notice. AGENCY: SUMMARY: This notice is provided in accordance with IRC section 6039G, as amended, by the Health Insurance Portability and Accountability Act (HIPPA) of 1996. This listing contains E:\FR\FM\02FEN1.SGM 02FEN1

Agencies

[Federal Register Volume 72, Number 22 (Friday, February 2, 2007)]
[Notices]
[Pages 5099-5103]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-1735]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2006-25592]


Morgan Motor Company Limited; Denial of Application for a 
Temporary Exemption From Air Bag Provisions of Federal Motor Vehicle 
Safety Standard No. 208

AGENCY: National Highway Traffic Safety Administration (NHTSA), 
Department of Transportation (DOT).

ACTION: Denial of application for a temporary exemption from air bag 
provisions of Federal Motor Vehicle Safety Standard No. 208, Occupant 
Crash Protection.

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SUMMARY: This notice denies the petition of Morgan Motor Company, 
Limited (Morgan) for a temporary exemption from the air bag 
requirements of Federal Motor Vehicle Safety Standard (FMVSS) No. 208,

[[Page 5100]]

Occupant Crash Protection, for the Morgan ``traditional roadster'' from 
September 2006 through September 2009. The basis of the application is 
that compliance would cause substantial economic hardship to a 
manufacturer that states it has tried in good faith to comply with the 
standard. NHTSA notes that Morgan has known since 1997 that it could 
not procure more air bags, but provided no evidence of attempts to 
secure an alternate source of air bags.
    In accordance with the requirements of 49 U.S.C. 30113(b)(2), we 
published a Federal Register document on August 15, 2006 announcing 
receipt of Morgan's application.

FOR FURTHER INFORMATION CONTACT: Ms. Dorothy Nakama in the Office of 
Chief Counsel, NCC-112, (Phone: 202-366-2992; Fax 202-366-3820).

SUPPLEMENTARY INFORMATION:

I. Background

    Founded in 1909, Morgan is a small, privately-owned vehicle 
manufacturer producing approximately 600 specialty sports cars per 
year.\1\ Morgan manufactures several models, but at present, only sells 
the Aero 8 in the U.S. Morgan intended to produce a vehicle line 
specific to the U.S. market, with Ford supplying the engine and 
transmission. However, for technical reasons, the project did not come 
to fruition, and Morgan temporarily stopped selling vehicles in the 
U.S. in 2004. In May 2005, Morgan obtained a temporary exemption from 
this agency's bumper standard and began selling the Aero 8 in the U.S.
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    \1\ A manufacturer is eligible to apply for a hardship exemption 
if its total motor vehicle production in its most recent year of 
production does not exceed 10,000, as determined by the NHTSA 
Administrator (15 U.S.C. 1410(d)(1)).
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    On July 12, 2006 (71 FR 39386), NHTSA published a notice of receipt 
of five applications for temporary exemptions from the advanced air bag 
requirements \2\ of Federal Motor Vehicle Safety Standard (FMVSS) No. 
208, Occupant Crash Protection. Among these petitions was an October 4, 
2005 one from Morgan, for the Aero 8, which is discussed at pages 
39390-39391. Morgan's petition is included in the docket for that 
notice, i.e., Docket NHTSA-2006-25324.
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    \2\ In 2000, NHTSA upgraded the requirements for air bags in 
passenger cars and light trucks, requiring what are commonly known 
as ``advanced air bags.'' 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. See 65 FR 30680 (May 12, 2000) 
(Docket No. NHTSA-2000-7013).
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    That notice of receipt did not address a second request by Morgan. 
In correspondence dated February 6, 2006, Morgan petitioned for an 
exemption for a different vehicle, its ``traditional roadster,'' from 
all air bag requirements in FMVSS No. 208 (i.e., the standard's 
requirement that vehicles be equipped with air bags as well as the 
advanced air bag requirements) from September 2006 through September 
2009. That company titled this correspondence ``Supplement to Pending 
Morgan Part 555 Temporary Exemption.'' Morgan explained that it did not 
file a petition for the traditional roadster at the same time as it 
petitioned for the Aero 8 because in October 2005 (when the Aero 8 
petition was filed), Morgan planned to sell only the Aero 8 in the U.S. 
from September 2006-September 2009. The company did not plan to sell 
the traditional roadster during that period because the Rover engine 
used in the U.S. version of the traditional roadster for 35 years was 
no longer able to meet more stringent U.S. emissions standards.
    In late 2005, Morgan found a U.S.-certified Ford V6 engine for the 
U.S. traditional roadster and built a limited production run of 80 
vehicles. The traditional roadster ``immediately sold out.'' In order 
to maintain U.S. sales and to produce revenue, Morgan then decided to 
continue to sell the U.S. traditional roadster. However, while the 
traditional roadster had had a mechanical Breed standard air bag system 
(i.e., non-advanced air bag system) since 1996, those air bags are now 
out of production and are no longer available. Morgan indicated that 
the final limited production run of 80 vehicles using the Ford V6 
engine used the last of these air bag systems. In addition, Morgan 
stated that the Aero 8 standard air bag system cannot be fitted to the 
traditional roadster because the interiors and chassis are completely 
different.
    We note that in its February 2006 correspondence, Morgan asked that 
its exemption requests for the traditional roadster and Aero 8 be 
considered independently. On September 7, 2006 (71 FR 52851), NHTSA 
issued its determinations of five manufacturers petitioning for 
temporary exemptions from the advanced air bag requirements of Standard 
No. 208. Morgan's Aero 8 petition was addressed at pages 52862-52865.
    As noted above, NHTSA upgraded the requirements for air bags in 
2000 to require advanced air bags in passenger cars and light trucks. 
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 (i.e., original vehicle manufacturers 
producing or assembling fewer than 5,000 vehicles annually for sale in 
the United States) 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 complex 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 indicated above, for its traditional roadster, Morgan is 
requesting an exemption not only from the advanced air bag 
requirements, but also from the standard's requirements for air bags 
altogether. As always, we are concerned about the potential safety 
implications of any temporary exemptions granted by this agency.

II. Morgan's Statement of Economic Hardship

    In accordance with 49 U.S.C. 30113 and the procedures in 49 CFR 
Part 555, Morgan petitioned NHTSA for a temporary exemption from 
standard and advanced air bag requirements of FMVSS No. 208. The basis 
for its application is that compliance would cause substantial economic 
hardship to a manufacturer that has tried in good faith to comply with 
the standard. The agency closely examines and considers the information 
provided by

[[Page 5101]]

manufacturers in support of these factors and in addition, pursuant to 
49 U.S.C. 30113(b)(3)(A), determines whether an exemption is in the 
public interest and consistent with 49 U.S.C. Chapter 301.
    Morgan stated that without the sales of the U.S. traditional 
roadster from September 2006-September 2009, it would lose an 
additional $315,000 on top of the losses estimated in the October 2005 
petition for the Aero.\3\ It further stated that if it were able to 
sell the traditional roadster in the U.S. during that period, ``the 
resulting revenues would also be critical to funding the development of 
the new advanced air bag for use in all Morgan vehicles destined for 
the U.S. after September 2009.'' Morgan's previous financial submission 
indicates that the company's losses over the last 5 years have totaled 
more than $3,600,000. In 2004, Morgan made a small profit for the first 
time in three years. Morgan predicted a net loss for fiscal year 2005.
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    \3\ Estimated to be between $3,196,179 and $5,066,938. When 
costs for interior redesign, crash cars, and tooling are included, 
the estimate rises to between $5,648,679 and $7,519,438. (See 71 FR 
at 39391.)
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    Morgan stated that even adding the projected sales of the 
traditional roadster, the total U.S. ``exempted-car sales'' forecast 
for September 2006-September 2009 remain about the same: for 2006, 50 
vehicles; for 2007, 250 vehicles; for 2008, 250 vehicles; and for 2009, 
250 vehicles. Morgan also provided information on the sales of the 80 
model year 2005 traditional roadsters (with the Ford V6 engine).
    We note that in commenting on the agency's July 2006 notice 
concerning its request for a temporary exemption for the Aero 8, Morgan 
indicated that the temporary exemptions it was seeking would involve 
400 Aero 8s over three years, and 400 traditional roadsters over three 
years.

III. Morgan's Statement of Good Faith Efforts to Comply

    In its October 2005 submission, Morgan stated that it has been 
working with the air bag supplier Siemens to develop an advanced air 
bag system for the Aero 8. However, a lack of funds and technical 
problems precluded the implementation of an advanced air bag system for 
the Aero 8. It said that the minimum time needed to develop an advanced 
air bag system (provided that there is a source of revenue) is 2 years. 
Specific technical challenges include the following matters. Morgan 
does not have access to the necessary sensor technology to pursue the 
``full suppression'' passenger air bag option. Due to the design of the 
Aero 8 platform dashboard, an entirely new interior solution and design 
must be developed. Chassis modifications are anticipated due to the 
originally stiff chassis design.
    In its February 2006 petition, Morgan stated that it cannot install 
air bags in the U.S. traditional roadsters expected to be built between 
September 2006 and September 2009, even though the Aero 8 vehicles 
built during that period will have standard air bags. Morgan provided 
two reasons why the traditional roadster ``cannot have air bags'' even 
though the Aero 8 can. First, since 1996, the traditional roadsters 
have had a mechanical Breed standard air bag system. In 1997, Breed 
stopped production of the air bags fitted to the traditional roadsters. 
Thus, these bags are no longer available. Morgan states that it cannot 
obtain any more components. The final run of the 80 traditional 
roadsters with the Ford V6 engine used the last of the air bag systems.
    Second, the Aero 8 standard air bag system cannot be fitted into 
the traditional roadster because the interiors and chassis are 
completely different. Morgan asserts that it would not be possible to 
integrate the Aero 8 air bag components into the traditional roadster's 
design because of both physical and operational differences. The Aero 8 
air bag steering wheel will not fit in the traditional roadster's 
design, and the Aero 8 passenger air bag will not fit into the 
traditional roadster's instrument panel. In terms of air bag operation, 
to use the Aero 8 system in the traditional roadster, there would have 
to be a new deployment control/trigger system developed due to the 
significantly different crash pulses between the Aero 8 aluminum tub 
and the traditional roadster steel chassis.
    Morgan stated that the traditional roadster will have an advanced 
air bag system at the same time that the Aero 8 will. At present, the 
traditional roadster uses the same design as it has had since 1936, a 
steel chassis with a wooden frame for the body panels. As part of the 
development of the advanced air bag system, Morgan plans to switch the 
traditional roadster onto the aluminum tub chassis used by the Aero 8. 
In this way, the advanced air bag program (through Siemens) that Morgan 
outlined in its Part 555 exemption petition for the Aero 8 will also be 
applicable to the traditional roadster. Morgan believes that when its 
advanced air bag system is ready in 2009, the air bag system will 
simultaneously be installed in both the Aero and traditional roadster 
models. Morgan asserts that it ``obviously cannot expend the resources 
to develop an air bag system--advanced or standard'' for the 
traditional roadster that is separate from the air bag system being 
developed for the Aero 8. Morgan cites this inability as the reason why 
there cannot be an interim standard air bag system for the traditional 
roadster during the period September 2006-September 2009.

IV. Morgan's Statement of Public Interest

    In its original petition, which concerned the Aero 8, Morgan made 
several arguments supporting its view that the requested exemption is 
consistent with the public interest. According to Morgan, if the 
exemption were denied and Morgan stopped U.S. sales, Morgan's U.S. 
dealers would unavoidably have numerous lay-offs, resulting in some 
loss of jobs in the U.S. Denial of an exemption would reduce consumer 
choice in the specialty sports car market sector in which Morgan cars 
compete. That company argued further that the Morgan vehicles would not 
be used extensively by owners, and would be unlikely to carry small 
children. Finally, according to Morgan, granting an exemption would 
assure the continued availability of proper parts and service support 
for existing Morgan owners. Without an exemption, Morgan would be 
forced out of the U.S. market, making it difficult for Morgan dealers 
to support existing customers.
    We note that in its February 2006 correspondence requesting an 
exemption for the traditional roadster, Morgan generally did not 
discuss whether or how these arguments would apply to its request 
concerning the traditional roadster. We invited Morgan to address this 
issue. As indicated above, Morgan did argue that revenues from selling 
the traditional roadster would be critical to funding the development 
of the new advanced air bag for use in all Morgan vehicles destined for 
the U.S. after September 2009.

V. Notice of Receipt of Petition and Public Comments

    On August 15, 2006 (71 FR 46974) (Docket No. NHTSA-2006-25592), 
NHTSA published a Notice of Receipt of Application for a Temporary 
Exemption from Air Bag Provisions of Federal Motor Vehicle Safety 
Standard No. 208, and asked for public comment. In response, NHTSA 
received two sets of comments, both from Morgan and both undated.
    In the first set of comments, Morgan compared its petition with the 
grant of a Part 555 advanced air bag exemption to Ferrari (see 71 FR 
29389, May 22,

[[Page 5102]]

2006). Morgan stated that, like Ferrari, its product cycles must last 
longer than those typical in the industry. Morgan also stated that, as 
did Ferrari, it made a good faith effort, but could not find a 
practicable way to meet the air bag requirements. Morgan stated that 
its air bag supplier went out of business, which resulted in a lack of 
components. Morgan concluded that it needed the exemption in order to 
implement a new advanced air bag system on a new chassis. Morgan also 
commented on the safety implications of granting the petition and 
provided additional points on why granting Morgan's petitions would be 
``in the public interest.''
    Finally, Morgan updated its 2004 and 2005 financial statements as 
follows. Morgan's original submission indicated that in 2004, Morgan 
made a ``profit of 372,504 pounds.'' It was subsequently determined 
that Morgan showed a loss of 11,207 pounds (approximately $21,000). 
Morgan explained that the difference resulted from ``certain vehicle 
sales that in fact did not materialize.'' Morgan further stated that 
although it earlier stated that ``the results predicted * * * for 2005 
were a small loss of [pound]3,248'' (approximately $6,000), the final 
accounts showed a larger loss of [pound]386,140 (approximately 
$723,000). Morgan explained that the difference arises out of the 
amortization of additional R & D costs.
    In the second set of comments, Morgan compared its petition to that 
of Saleen, which recently received a one-year extension of a complete 
air bag exemption, which was a partial grant of Saleen's petition for 
extension for three more years. Morgan stated that its petition 
differed from that of Saleen, which already had five years under a 
complete air bag exemption when it asked for an initial exemption. 
Morgan stressed that it was petitioning for an initial exemption, not 
an extension, and for a period of time that is ``half the total number 
of exemption years that Saleen has now received.'' Morgan also once 
again emphasized that it made good faith efforts to meet the air bag 
requirements, citing again that it used an air bag system that was in 
production for eight years, which can no longer be used because the 
supplier went out of business. Morgan also stated that the fact that it 
can no longer source components for its already existing air bag system 
further distinguishes Morgan from Saleen.

VI. Agency Decision

    NHTSA denies Morgan's petition for the ``traditional roadster.'' 
Morgan has informed NHTSA that the traditional roadster will have the 
same advanced air bag system as the Aero 8 in 2009, when the 
traditional roadster's chassis will be modified to accommodate the 
advanced air bag system. In the following discussion, NHTSA focuses on 
Morgan's attempts to secure a standard air bag for its traditional 
roadsters for September 2006-September 2009. In the background 
information regarding Morgan's attempts to secure both the standard and 
advanced air bags, Morgan states that its last source of standard air 
bags was in 1997 from Breed. Since Breed no longer manufactures the 
standard air bags, they are no longer available. In late 2005, after it 
found a U.S.-certified Ford V6 engine for the U.S. traditional 
roadster, Morgan built a limited production run of 80 traditional 
roadsters, installing in them the last of the Breed standard air bags. 
Morgan informs us that the standard air bag system on its Aero 8 cannot 
be fitted to the traditional roadster because the interiors and chassis 
are completely different.
    In its petition, Morgan simply states that it ``obviously cannot 
expend the resources to develop an air bag system--advanced or 
standard'' for the traditional roadster that is separate from the air 
bag system being developed for the Aero 8. It appears that Morgan had 
no plans to sell the traditional roadster in the U.S. after 1997. It 
appears that it was only in late 2005, when Morgan equipped U.S.-
certified engine vehicles with the last of the standard air bags and 
had better than expected sales that it decided to attempt to 
reintroduce the traditional roadster into the U.S. market. However, the 
agency has no information indicating that Morgan attempted to find a 
new source for the standard air bag. Although Morgan may not have been 
able to develop its own standard air bag system for the traditional 
roadster, it did not describe any contacts it made with potential 
suppliers of standard air bags, or provide quotations (even on a 
confidential basis) from possible sources that would be qualified to 
develop standard air bags for the traditional roadster. Without this 
information, NHTSA is unable to determine the extent of the economic 
hardship it would cause Morgan to procure standard air bags in the Aero 
8.
    In its comments, Morgan compared its petition with those of Ferrari 
and Saleen (which received a one year temporary exemption out of the 
three years for which it petitioned). The major difference between 
Morgan's petition and those of Ferrari and Saleen is that Morgan's 
petition lacks the detail provided by Ferrari and Saleen describing how 
each company attempted to secure alternate sources of air bags, and how 
much it would cost each company, if a source were available.
    In its petition, Ferrari provided the following:

    1. Chronological analysis of Ferrari's efforts to comply, 
showing the relationship to the rulemaking history of the advanced 
air bag requirements.
    2. Itemized costs of each component that would have to be 
modified in order to achieve compliance.
    3. Discussion of alternative means of compliance and reasons for 
rejecting these alternatives.
    4. List of air bag suppliers that were approached in hopes of 
procuring necessary components.
    * * *
    6. Corporate balance sheets for the past 3 years, and projected 
balance sheets if the petition is denied.\4\

    \4\ See Ferrari S.p.A. and Ferrari North America, Inc. Grant of 
Application for a Temporary Exemption from S14.2. of Federal Motor 
Vehicle Safety Standard No. 208 (71 FR 29389, May 22, 2006) (Docket 
No. NHTSA-2005-23093), at page 29390.
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    In its petition dated January 24, 2006, Saleen cited by name the 
air bag developers and suppliers it approached about assisting Saleen 
in developing an advanced air bag system (see page 3 of the petition). 
Saleen also provided pursuant to 49 CFR Part 555.6(a)(1), ``Engineering 
and financial information demonstrating in detail how compliance or 
failure to obtain an exemption would cause substantial economic 
hardship,'' and included information such as the vehicle components 
that would have to be modified to accommodate an air bag system (pages 
3-4), and the itemized costs to modify each component (page 4).
    Because Morgan did not provide a similar level of detail about the 
efforts it undertook to find alternative sources of a standard air bag 
and costs that would be entailed in modifying the traditional roadster 
to accommodate a standard air bag, NHTSA was unable to conclude that 
meeting the air bag requirements for Morgan would ``cause substantial 
economic hardship to a manufacturer that has tried to comply with the 
standard in good faith.''
    Finally, NHTSA notes that in the August 15, 2006 notice of receipt 
of Morgan's application for a temporary exemption for the traditional 
roadster, we invited Morgan to address the issue of how granting 
Morgan's petition for exemption for the traditional roadster would be 
in the public interest. We noted that all the public interest arguments 
raised in the August 2006 notice were taken from Morgan's petition for 
the Aero 8. Morgan did not respond to NHTSA's request on this

[[Page 5103]]

issue, and did not provide an independent basis for the agency's 
determining how granting Morgan's petition for the traditional roadster 
would be in the public interest.

    Authority: 49 U.S.C. 30113; delegations of authority at 49 CFR 
1.50. and 501.8.

    Issued on: January 30, 2007.
Nicole R. Nason,
Administrator.
[FR Doc. E7-1735 Filed 2-1-07; 8:45 am]
BILLING CODE 4910-59-P