Panoz Auto-Development Company; Grant of Application for a Temporary Exemption From the Advanced Air Bag Requirements of FMVSS No. 208, 28759-28763 [E7-9850]
Download as PDF
<![CDATA[
Federal Register / Vol. 72, No. 98 / Tuesday, May 22, 2007 / Notices
28759
LIST OF APA MEMBERS COVERED BY EXEMPTION FROM 14 HOUR RULE IN HOURS OF SERVICE FOR DRIVERS
REGULATION—Continued
Company name
Address
Address 2
DOT #
Wolverine Fireworks Display, Inc .....................................
Young Explosives Corp ....................................................
Zambelli Fireworks MFG, Co., Inc ....................................
205 W Seidlers ................................
P.O. Box 18653 ...............................
P.O. Box 1463 .................................
Kawkawlin, MI ..................................
Rochester, NY .................................
New Castle, PA 16103 ....................
376857
450304
033167
[FR Doc. E7–9841 Filed 5–21–07; 8:45 am]
BILLING CODE 4910–EX–P
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety
Administration
[Docket No. NHTSA–2006–26424; Notice 2]
Maxon Industry, Inc. DBA Maxonlift
Corp.; Ruling on Petition for
Determination of Inconsequential
Noncompliance
Maxon Industry Inc. DBA Maxonlift
Corp. (Maxonlift) has determined that
certain wheelchair lifts that it produced
in 2005 and 2006 do not comply with
paragraph S6.4.7.3 of 49 CFR 571.403,
Federal Motor Vehicle Safety Standard
(FMVSS) No. 403, Platform Lift Systems
for Motor Vehicles. Pursuant to 49
U.S.C. 30118(d) and 30120(h), Maxonlift
has petitioned for a determination that
this noncompliance is inconsequential
to motor vehicle safety and has filed an
appropriate report pursuant to 49 CFR
Part 573, ‘‘Defect and Noncompliance
Responsibility and Reports.’’ Notice of
receipt of the petition was published,
with a 30 day public comment period,
on December 13, 2006 in the Federal
Register (71 FR 74996). The National
Highway Traffic Safety Administration
(NHTSA) received no comments. To
view the petition and all supporting
documents, go to: https://dms.dot.gov/
search/searchFormSimple.cfm and enter
Docket No. NHTSA–2006–26424.
Affected are a total of approximately
197 Model WL–7 and WL–7A
wheelchair lifts produced by Maxon
between April 1, 2005 and May 30,
2006. Specifically, paragraph S6.4.7.3 of
FMVSS No. 403 requires:
jlentini on PROD1PC65 with NOTICES
The deployed wheelchair retention
device(s) must be capable of sustaining 7,117
N (1,600 lb force) when tested in accordance
with S7.13. No separation, fracture, or
breakage of the wheelchair retention device
may occur as a result of conducting the test
in S7.13.
On the subject wheelchair lifts, the
outer barrier wheelchair retention
device does not comply. In NHTSA’s
compliance test on the Maxon lift, the
outer barrier sustained 5,502 N (1,237
lb. force). Bending occurs on the locking
VerDate Aug<31>2005
18:21 May 21, 2007
Jkt 211001
bracket attachments and in the ramp
extrusion, and potentially the outer
barrier can unfold or break. Maxonlift
has corrected the problem that caused
these errors so that they will not be
repeated in future production.
Maxonlift believes that the
noncompliance is inconsequential to
motor vehicle safety and that no
corrective action is warranted.
Maxonlift states:
For the units built with seat belts [all
except for 63] we have an electronic feature
that does not allow the unit to travel up and
down without the seat belts fastened. The
seat belt is an added restraint that takes force
off of the outboard roll stop. If an electric
wheelchair is accidentally moved forward it
will hit the seat belt first keeping the person
in place. We have had zero failure reports or
warranty claims relating to an outboard roll
stop failure.
With respect to the lifts that were
provided with seat belts and an
associated electronic feature that
prevents lift platform up and down
travel unless the seat belt is fastened,
NHTSA agrees with Maxonlift that the
noncompliance of the outer barrier is
inconsequential to motor vehicle safety.
NHTSA does not agree with Maxonlift
with regard to the remainder of the lifts
that do not have seat belts (secondary
wheelchair retention devices). Lifts
without seatbelts would rely solely on
the inadequate noncompliant outer
barrier to prevent a wheelchair from
rolling off the lift platform. A failure of
the outer barrier would therefore
present a potential for severe injury to
both the wheelchair occupant and
attendants.
On the basis of the foregoing, NHTSA
has determined that Maxonlift has
adequately demonstrated that, under the
specific facts and circumstances
presented here, the noncompliance with
FMVSS No. 403 in the lifts with seat
belts is inconsequential to motor vehicle
safety and no further action is
warranted. Conversely, the
noncompliance in the lifts without seat
belts is not inconsequential.
Accordingly, Maxonlift’s petition for
an exemption from the duty to recall
these noncompliant lifts equipped with
seat belts is granted in part. However,
the case of the noncompliant lifts
without seat belts, the petition is denied
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
and Maxonlift must notify according to
49 U.S.C. 30118 and remedy according
to 49 U.S.C. 30120.
Authority: 49 U.S.C. 30118, 30120;
delegations of authority at 49 CFR 1.50 and
501.8.
Issued on: May 16, 2007.
Daniel C. Smith,
Associate Administrator for Enforcement.
[FR Doc. E7–9858 Filed 5–21–07; 8:45 am]
BILLING CODE 4910–59–P
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety
Administration
[Docket No. NHTSA–2006–26109]
Panoz Auto-Development Company;
Grant 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).
ACTION: Grant of application for
temporary exemption from certain
provisions of Federal Motor Vehicle
Safety Standard (FMVSS) No. 208,
Occupant Crash Protection.
AGENCY:
SUMMARY: This document grants the
application of Panoz Auto-Development
Company for a temporary exemption
from certain advanced air bag
requirements of FMVSS No. 208. The
exemption applies to the Panoz
Esperante. The basis for the grant is that
compliance would cause substantial
economic hardship to a manufacturer
that has tried in good faith to comply
with the standard, and the exemption
would have a negligible effect on motor
vehicle safety.
The notice of receipt of an application
for temporary exemption from Panoz
was published in the Federal Register
on October 20, 2006. We received no
comments in response to the
publication.
The exemption for the Panoz
Esperante from the specified provisions
of FMVSS No. 208 is effective
immediately and remains in effect
through August 31, 2009.
DATES:
E:\FR\FM\22MYN1.SGM
22MYN1
28760
Federal Register / Vol. 72, No. 98 / Tuesday, May 22, 2007 / Notices
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.
SUPPLEMENTARY INFORMATION:
jlentini on PROD1PC65 with NOTICES
FOR FURTHER INFORMATION CONTACT:
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.’’ 1 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
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.
1 See
65 FR 30680 (May 12, 2000).
VerDate Aug<31>2005
18:21 May 21, 2007
As always, we are concerned about
the potential safety implication of any
temporary exemptions granted by this
agency. In the present case, we are
addressing a petition for a temporary
exemption from the advanced air bag
requirements submitted by a
manufacturer of a low volume, exotic
sports car.
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 was that
compliance would cause substantial
economic hardship to a manufacturer
that has tried in good faith to comply
with the standard.
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,
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.
Finally, while 49 U.S.C. 30113(b)
states that exemptions from a Safety Act
standard are to be granted on a
‘‘temporary basis,’’2 the statute also
expressly provides for renewal of an
exemption on reapplication.
Manufacturers are nevertheless
2 49
Jkt 211001
PO 00000
U.S.C. 30113(b)(1).
Frm 00095
Fmt 4703
Sfmt 4703
cautioned that the agency’s decision to
grant an initial petition in no way
predetermines that the agency will
repeatedly grant renewal petitions,
thereby imparting semi-permanent
exemption from a safety standard.
Exempted manufacturers seeking
renewal must bear in mind that the
agency is directed to consider financial
hardship as but one factor, along with
the manufacturer’s on-going good faith
efforts to comply with the regulation,
the public interest, consistency with the
Safety Act, generally, as well as other
such matters provided in the statute.
IV. Petition of Panoz Auto-Development
Company
Panoz stated 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 stated that
‘‘[t]he Esperante is the only passenger
car currently being produced by Panoz,
a small volume manufacturer.’’ Panoz
stated 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 stated 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, which
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.
E:\FR\FM\22MYN1.SGM
22MYN1
Federal Register / Vol. 72, No. 98 / Tuesday, May 22, 2007 / Notices
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 Ford S197
Mustang 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 stated 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 estimated that full compliance
with FMVSS No. 208 requirements will
be achieved before July 2009.
Actual sales were 35 units below
projections in 2001, 30 units below
projections in 2002, 72 units below
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
12. 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
3 Panoz did not specify whether it meant the
advanced air bag or requirements or other FMVSS
No. 208 air bag requirements.
4 Panoz did not provide actual sales figures
orproduction figures for the Esperante for any of
these years.
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’’ 3 and with Environmental
Protection Agency and California Air
Resources Board requirements, the
manufacturers’ 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:
jlentini on PROD1PC65 with NOTICES
projections in 2003, 77 units below
projections in 2004, 73 units below
projections in 2005, and 43 units below
projections in 2006.4
VerDate Aug<31>2005
18:21 May 21, 2007
Jkt 211001
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
28761
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
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 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 is to
‘‘provide the safest vehicles possible to
the public.’’ The three year exemption
from the advanced 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’’ 5 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
5 Panoz did not explain what it means by the term
‘‘package.’’
E:\FR\FM\22MYN1.SGM
22MYN1
jlentini on PROD1PC65 with NOTICES
28762
Federal Register / Vol. 72, No. 98 / Tuesday, May 22, 2007 / Notices
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
the 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 stated 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 stated 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.
VerDate Aug<31>2005
18:21 May 21, 2007
Jkt 211001
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 stated 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
stated 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 stated that the Esperante
remains as the only vehicle developed
and sold in the U.S. which uses
extensive aluminum technology. Panoz
stated 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 asserted that ‘‘[w]ith the probable
mandate for greater fuel efficiency, the
use of aluminum technology should
continue to escalate.’’ Panoz stated that
the Esperante is a ‘‘showcase’’ for
aluminum technology. Several
companies have used some of the
Esperante technology in their products.
Panoz stated that it is an innovator in
vehicle technology. Panoz further stated
that it continues to provide the public
with ‘‘a classic alternative’’ to current
production vehicles.
VIII. Federal Register Notice of October
20, 2006
In the Federal Register of October 20,
2006 (71 FR 62038), we published a
notice announcing receipt of an
application from Panoz for a temporary
exemption from the advanced air bag
requirements of FMVSS No. 208 for the
Esperante. We invited public comment
on Panoz’s application. We received no
comments in response to this
publication.
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
IX. Final Decision
The following discussion provides
our decision regarding Panoz’s
temporary exemption request pertaining
to the advanced air bag requirement of
FMVSS No. 208.
We are granting Panoz’s petition to be
exempted from portions of the advanced
air bag regulation required by S14.2
(specifically S14.5.2, S15, S17, S19, S21,
S23, and S25). The exemption does not
extend to the provision requiring a
belted 50th percentile male barrier
impact test (S14.5.1(a)). In addition to
certifying compliance with S14.5.1(a),
Panoz must continue to certify to the
unbelted 50th percentile barrier impact
test in force prior to September 1, 2006
(S5.1.2(a)). We note that the unbelted
sled test in S13 is an acceptable option
for that requirement. The agency’s
rationale for this decision is as follows.
The advanced air bag requirements
present a unique challenge because they
would require Panoz to undertake a
major redesign of the Esperante, in order
to overcome its engineering limitations.
While the petitioner was aware of the
new requirements for some time, its
business plans to introduce a fully
compliant vehicle did not materialize
due to the fact that it has to rely on
components produced by large volume
manufacturers in order to meet safety
and emissions standards. Consequently,
Panoz had to accommodate the delivery
schedule of these large manufacturers.
Panoz explained the main engineering
challenges precluding incorporation of
advanced air bag into the Esperante at
this time, as follows. The company does
not have access to necessary sensor
technology to pursue the ‘‘full
suppression’’ passenger air bag option.
In addition, due to the redesign of the
Mustang platform, resulting in a new
S197 Ford platform, chassis
modifications are anticipated. The
petitioner stated that it would take
approximately two years to resolve
these technical issues surrounding
advanced air bags, given adequate
funding. Panoz estimated that the total
cost to adapt an advanced driver and
passenger-side air bag system within
one or two years to be $1,928,000. Panoz
has made clear that such a prospect
would pose a unique challenge to the
company, due to the high cost of
development and its extremely small
sales volumes.
Based upon the information provided
by the petitioner, we understand that
Panoz made good faith efforts to bring
the Esperante into compliance with the
applicable requirements. The company
had a difficult time in gaining access to
advanced air bag technology (which
E:\FR\FM\22MYN1.SGM
22MYN1
jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 72, No. 98 / Tuesday, May 22, 2007 / Notices
presumably reflects suppliers’ initial
focus on meeting the needs of large
volume manufacturers), and this further
reduced the lead time available for
development. Furthermore, because
Panoz is a fully independent company,
there was no possibility of technology
transfer from a larger parent company.
Consequently, no viable alternatives
remain. The petitioner was unable to
redesign its vehicle by the time the new
advanced air bag requirements went
into effect on September 1, 2006.
After review of the income statements
provided by the petitioner, the agency
notes that the company has faced
ongoing financial difficulties. Panoz has
estimated that adding the advanced air
bag system adds approximately $6,129
to the cost of each vehicle, and could
reduce vehicle sales by approximately 8
percent. Panoz stated that as a result of
development costs necessary to meet the
‘‘airbag mandate’’ and to meet Federal
and State emissions control
requirements, the manufacturer’s
suggested retail price of the Esperante
was increased to $121,326. If the
exemption is not granted by NHTSA,
Panoz stated that it will lose $6,339,180
in 2007 based on the projected sales of
60 units, $10,565,300 in 2008 based on
the projected sale of 100 units, and
$15,847,950 in 2009 based on the
projected sale of 150 units. 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.
According to Panoz, its problems
would be compounded without its
requested temporary exemption,
because it needs the revenue from sales
of the Esperante over the next three
years to finance development of a fully
compliant vehicle for sale. Granting the
exemption will allow Panoz to earn the
resources necessary to bridge the gap in
terms of development of a vehicle that
meets all U.S. requirements.
The petitioner made a comprehensive
showing of its good faith efforts to
comply with the requirements of S14.2
of FMVSS No. 208, and detailed
engineering and financial information
demonstrating that failure to obtain the
exemption would cause substantial
economic hardship. Specifically, the
petitioner provided the following:
1. Chronological analysis of Panoz’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. Cost of tooling needed to make the
vehicle meet advanced air bag
requirements.
VerDate Aug<31>2005
18:21 May 21, 2007
Jkt 211001
4. Costs of testing to ensure the
redesigned vehicle meets the advanced
air bag requirements.
5. Corporate income statements and
balance sheets for the past three years,
and projected income statements and
balance sheets if the petition is denied.
We note that reduction of sales
revenue resulting from a denial of the
company’s requested temporary
exemption would have a negative
impact not only on Panoz’s financial
circumstances, but it would also
negatively affect U.S. employment.
Specifically, reduction in sales would
also affect Panoz dealers and repair
specialists, negatively impacting their
ability to provide parts and services to
current Panoz owners. Traditionally, the
agency has concluded that the public
interest is served in affording continued
employment to the petitioner’s U.S.
work force. Furthermore, as discussed
in previous decisions on temporary
exemption applications, the agency
believes that the public interest is
served by affording consumers a wider
variety of motor vehicle choices.
We believe that this exemption will
have negligible impact on motor vehicle
safety because of the limited number of
vehicles affected (approximately 300 for
the duration of the exemption), and
because Panoz vehicles are not typically
used for daily transportation. Their
annual usage is substantially lower
compared to vehicles used for everyday
transportation.
We note that, as explained below,
prospective purchasers will be notified
that the vehicle is exempted from the
specified advanced air bag requirements
of Standard No. 208. Under § 555.9(b),
a manufacturer of an exempted
passenger car must affix securely to the
windshield or side window of each
exempted vehicle a label containing a
statement that the vehicle conforms to
all applicable Federal motor vehicle
safety standards in effect on the date of
manufacture ‘‘except for Standard Nos.
[listing the standards by number and
title for which an exemption has been
granted] exempted pursuant to NHTSA
Exemption No. llll.’’ This label
notifies prospective purchasers about
the exemption and its subject. Under
§ 555.9(c), this information must also be
included on the vehicle’s certification
label.
We note that the text of § 555.9 does
not expressly indicate how the required
statement on the two labels should read
in situations where an exemption covers
part but not all of a Federal motor
vehicle safety standard. Specifically in
the case of FMVSS No. 208, we believe
that a statement that the vehicle has
been exempted from Standard No. 208
PO 00000
Frm 00098
Fmt 4703
Sfmt 4703
28763
generally, without an indication that the
exemption is limited to the specified
advanced air bag provisions, could be
misleading. A consumer might
incorrectly believe that the vehicle has
been exempted from all of Standard No.
208’s requirements. Moreover, we
believe that the addition of a reference
to such provisions by number without
an indication of its subject matter would
be of little use to consumers, since they
would not know the subject of those
specific provisions. For these reasons,
we believe the two labels should read in
relevant part, ‘‘except for S14.5.2, S15,
S17, S19, S21, S23, and S25 (Advanced
Air Bag Requirements) of Standard No.
208, Occupant Crash Protection,
exempted pursuant to * * *.’’ We note
that the phrase ‘‘Advanced Air Bag
Requirements’’ is an abbreviated form of
the title of S14 of Standard No. 208. We
believe it is reasonable to interpret
§ 555.9 as requiring this language.
In sum, the agency concludes that
Panoz has demonstrated good faith
effort to bring the Esperante into
compliance with the advanced air bag
requirements of FMVSS No. 208 and has
also demonstrated the requisite
financial hardship. Further, we find this
exemption to be in the public interest.
In consideration of the foregoing, we
conclude that compliance with the
advanced air bag requirements of
FMVSS No. 208, Occupant Crash
Protection, would cause substantial
economic hardship to a manufacturer
that has tried in good faith to comply
with the standard. We further conclude
that granting of an exemption from these
provisions would be in the public
interest and consistent with the
objectives of traffic safety.
In accordance with 49 U.S.C.
30113(b)(3)(B)(i), the Panoz Esperante is
granted NHTSA Temporary Exemption
No. EX 07–01, from S14.5.2, S15, S17,
S19, S21, S23, and S25 of 49 CFR
571.208. The exemption is effective
immediately and continues in effect
through August 31, 2009.
Issued on: May 15, 2007.
Nicole R. Nason,
Administrator.
[FR Doc. E7–9850 Filed 5–21–07; 8:45 am]
BILLING CODE 4910–59–P
E:\FR\FM\22MYN1.SGM
22MYN1
]]>Agencies
[Federal Register Volume 72, Number 98 (Tuesday, May 22, 2007)]
[Notices]
[Pages 28759-28763]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-9850]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
[Docket No. NHTSA-2006-26109]
Panoz Auto-Development Company; Grant 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: Grant of application for temporary exemption from certain
provisions of Federal Motor Vehicle Safety Standard (FMVSS) No. 208,
Occupant Crash Protection.
-----------------------------------------------------------------------
SUMMARY: This document grants the application of Panoz Auto-Development
Company for a temporary exemption from certain advanced air bag
requirements of FMVSS No. 208. The exemption applies to the Panoz
Esperante. The basis for the grant is that compliance would cause
substantial economic hardship to a manufacturer that has tried in good
faith to comply with the standard, and the exemption would have a
negligible effect on motor vehicle safety.
The notice of receipt of an application for temporary exemption
from Panoz was published in the Federal Register on October 20, 2006.
We received no comments in response to the publication.
DATES: The exemption for the Panoz Esperante from the specified
provisions of FMVSS No. 208 is effective immediately and remains in
effect through August 31, 2009.
[[Page 28760]]
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.
SUPPLEMENTARY INFORMATION:
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.'' \1\ 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.
---------------------------------------------------------------------------
\1\ See 65 FR 30680 (May 12, 2000).
---------------------------------------------------------------------------
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 addressing a petition for a temporary exemption from the
advanced air bag requirements submitted by a manufacturer of a low
volume, exotic sports car.
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 was that compliance would
cause substantial economic hardship to a manufacturer that has tried in
good faith to comply with the standard.
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, 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.
Finally, while 49 U.S.C. 30113(b) states that exemptions from a
Safety Act standard are to be granted on a ``temporary basis,''\2\ the
statute also expressly provides for renewal of an exemption on
reapplication. Manufacturers are nevertheless cautioned that the
agency's decision to grant an initial petition in no way predetermines
that the agency will repeatedly grant renewal petitions, thereby
imparting semi-permanent exemption from a safety standard. Exempted
manufacturers seeking renewal must bear in mind that the agency is
directed to consider financial hardship as but one factor, along with
the manufacturer's on-going good faith efforts to comply with the
regulation, the public interest, consistency with the Safety Act,
generally, as well as other such matters provided in the statute.
---------------------------------------------------------------------------
\2\ 49 U.S.C. 30113(b)(1).
---------------------------------------------------------------------------
IV. Petition of Panoz Auto-Development Company
Panoz stated 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 stated that ``[t]he Esperante is
the only passenger car currently being produced by Panoz, a small
volume manufacturer.'' Panoz stated 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 stated 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, which 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.
[[Page 28761]]
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 Ford S197 Mustang 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 stated 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 estimated 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'' \3\ and with Environmental
Protection Agency and California Air Resources Board requirements, the
manufacturers' 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:
---------------------------------------------------------------------------
\3\ Panoz did not specify whether it meant the advanced air bag
or 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 43 units below projections in 2006.\4\
---------------------------------------------------------------------------
\4\ 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
12. 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 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 is to ``provide the safest
vehicles possible to the public.'' The three year exemption from the
advanced 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'' \5\ the new Mustang seats which are equipped with
sensors;
---------------------------------------------------------------------------
\5\ Panoz did not explain what it means by the term ``package.''
---------------------------------------------------------------------------
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
[[Page 28762]]
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 the 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 stated 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 stated 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 stated 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 stated 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 stated that the Esperante remains as the only vehicle
developed and sold in the U.S. which uses extensive aluminum
technology. Panoz stated 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
asserted that ``[w]ith the probable mandate for greater fuel
efficiency, the use of aluminum technology should continue to
escalate.'' Panoz stated that the Esperante is a ``showcase'' for
aluminum technology. Several companies have used some of the Esperante
technology in their products. Panoz stated that it is an innovator in
vehicle technology. Panoz further stated that it continues to provide
the public with ``a classic alternative'' to current production
vehicles.
VIII. Federal Register Notice of October 20, 2006
In the Federal Register of October 20, 2006 (71 FR 62038), we
published a notice announcing receipt of an application from Panoz for
a temporary exemption from the advanced air bag requirements of FMVSS
No. 208 for the Esperante. We invited public comment on Panoz's
application. We received no comments in response to this publication.
IX. Final Decision
The following discussion provides our decision regarding Panoz's
temporary exemption request pertaining to the advanced air bag
requirement of FMVSS No. 208.
We are granting Panoz's petition to be exempted from portions of
the advanced air bag regulation required by S14.2 (specifically
S14.5.2, S15, S17, S19, S21, S23, and S25). The exemption does not
extend to the provision requiring a belted 50th percentile male barrier
impact test (S14.5.1(a)). In addition to certifying compliance with
S14.5.1(a), Panoz must continue to certify to the unbelted 50th
percentile barrier impact test in force prior to September 1, 2006
(S5.1.2(a)). We note that the unbelted sled test in S13 is an
acceptable option for that requirement. The agency's rationale for this
decision is as follows.
The advanced air bag requirements present a unique challenge
because they would require Panoz to undertake a major redesign of the
Esperante, in order to overcome its engineering limitations. While the
petitioner was aware of the new requirements for some time, its
business plans to introduce a fully compliant vehicle did not
materialize due to the fact that it has to rely on components produced
by large volume manufacturers in order to meet safety and emissions
standards. Consequently, Panoz had to accommodate the delivery schedule
of these large manufacturers.
Panoz explained the main engineering challenges precluding
incorporation of advanced air bag into the Esperante at this time, as
follows. The company does not have access to necessary sensor
technology to pursue the ``full suppression'' passenger air bag option.
In addition, due to the redesign of the Mustang platform, resulting in
a new S197 Ford platform, chassis modifications are anticipated. The
petitioner stated that it would take approximately two years to resolve
these technical issues surrounding advanced air bags, given adequate
funding. Panoz estimated that the total cost to adapt an advanced
driver and passenger-side air bag system within one or two years to be
$1,928,000. Panoz has made clear that such a prospect would pose a
unique challenge to the company, due to the high cost of development
and its extremely small sales volumes.
Based upon the information provided by the petitioner, we
understand that Panoz made good faith efforts to bring the Esperante
into compliance with the applicable requirements. The company had a
difficult time in gaining access to advanced air bag technology (which
[[Page 28763]]
presumably reflects suppliers' initial focus on meeting the needs of
large volume manufacturers), and this further reduced the lead time
available for development. Furthermore, because Panoz is a fully
independent company, there was no possibility of technology transfer
from a larger parent company. Consequently, no viable alternatives
remain. The petitioner was unable to redesign its vehicle by the time
the new advanced air bag requirements went into effect on September 1,
2006.
After review of the income statements provided by the petitioner,
the agency notes that the company has faced ongoing financial
difficulties. Panoz has estimated that adding the advanced air bag
system adds approximately $6,129 to the cost of each vehicle, and could
reduce vehicle sales by approximately 8 percent. Panoz stated that as a
result of development costs necessary to meet the ``airbag mandate''
and to meet Federal and State emissions control requirements, the
manufacturer's suggested retail price of the Esperante was increased to
$121,326. If the exemption is not granted by NHTSA, Panoz stated that
it will lose $6,339,180 in 2007 based on the projected sales of 60
units, $10,565,300 in 2008 based on the projected sale of 100 units,
and $15,847,950 in 2009 based on the projected sale of 150 units. 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.
According to Panoz, its problems would be compounded without its
requested temporary exemption, because it needs the revenue from sales
of the Esperante over the next three years to finance development of a
fully compliant vehicle for sale. Granting the exemption will allow
Panoz to earn the resources necessary to bridge the gap in terms of
development of a vehicle that meets all U.S. requirements.
The petitioner made a comprehensive showing of its good faith
efforts to comply with the requirements of S14.2 of FMVSS No. 208, and
detailed engineering and financial information demonstrating that
failure to obtain the exemption would cause substantial economic
hardship. Specifically, the petitioner provided the following:
1. Chronological analysis of Panoz'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. Cost of tooling needed to make the vehicle meet advanced air bag
requirements.
4. Costs of testing to ensure the redesigned vehicle meets the
advanced air bag requirements.
5. Corporate income statements and balance sheets for the past
three years, and projected income statements and balance sheets if the
petition is denied.
We note that reduction of sales revenue resulting from a denial of
the company's requested temporary exemption would have a negative
impact not only on Panoz's financial circumstances, but it would also
negatively affect U.S. employment. Specifically, reduction in sales
would also affect Panoz dealers and repair specialists, negatively
impacting their ability to provide parts and services to current Panoz
owners. Traditionally, the agency has concluded that the public
interest is served in affording continued employment to the
petitioner's U.S. work force. Furthermore, as discussed in previous
decisions on temporary exemption applications, the agency believes that
the public interest is served by affording consumers a wider variety of
motor vehicle choices.
We believe that this exemption will have negligible impact on motor
vehicle safety because of the limited number of vehicles affected
(approximately 300 for the duration of the exemption), and because
Panoz vehicles are not typically used for daily transportation. Their
annual usage is substantially lower compared to vehicles used for
everyday transportation.
We note that, as explained below, prospective purchasers will be
notified that the vehicle is exempted from the specified advanced air
bag requirements of Standard No. 208. Under Sec. 555.9(b), a
manufacturer of an exempted passenger car must affix securely to the
windshield or side window of each exempted vehicle a label containing a
statement that the vehicle conforms to all applicable Federal motor
vehicle safety standards in effect on the date of manufacture ``except
for Standard Nos. [listing the standards by number and title for which
an exemption has been granted] exempted pursuant to NHTSA Exemption No.
--------.'' This label notifies prospective purchasers about the
exemption and its subject. Under Sec. 555.9(c), this information must
also be included on the vehicle's certification label.
We note that the text of Sec. 555.9 does not expressly indicate
how the required statement on the two labels should read in situations
where an exemption covers part but not all of a Federal motor vehicle
safety standard. Specifically in the case of FMVSS No. 208, we believe
that a statement that the vehicle has been exempted from Standard No.
208 generally, without an indication that the exemption is limited to
the specified advanced air bag provisions, could be misleading. A
consumer might incorrectly believe that the vehicle has been exempted
from all of Standard No. 208's requirements. Moreover, we believe that
the addition of a reference to such provisions by number without an
indication of its subject matter would be of little use to consumers,
since they would not know the subject of those specific provisions. For
these reasons, we believe the two labels should read in relevant part,
``except for S14.5.2, S15, S17, S19, S21, S23, and S25 (Advanced Air
Bag Requirements) of Standard No. 208, Occupant Crash Protection,
exempted pursuant to * * *.'' We note that the phrase ``Advanced Air
Bag Requirements'' is an abbreviated form of the title of S14 of
Standard No. 208. We believe it is reasonable to interpret Sec. 555.9
as requiring this language.
In sum, the agency concludes that Panoz has demonstrated good faith
effort to bring the Esperante into compliance with the advanced air bag
requirements of FMVSS No. 208 and has also demonstrated the requisite
financial hardship. Further, we find this exemption to be in the public
interest.
In consideration of the foregoing, we conclude that compliance with
the advanced air bag requirements of FMVSS No. 208, Occupant Crash
Protection, would cause substantial economic hardship to a manufacturer
that has tried in good faith to comply with the standard. We further
conclude that granting of an exemption from these provisions would be
in the public interest and consistent with the objectives of traffic
safety.
In accordance with 49 U.S.C. 30113(b)(3)(B)(i), the Panoz Esperante
is granted NHTSA Temporary Exemption No. EX 07-01, from S14.5.2, S15,
S17, S19, S21, S23, and S25 of 49 CFR 571.208. The exemption is
effective immediately and continues in effect through August 31, 2009.
Issued on: May 15, 2007.
Nicole R. Nason,
Administrator.
[FR Doc. E7-9850 Filed 5-21-07; 8:45 am]
BILLING CODE 4910-59-P
