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Notice

Spyker Automobielen B.V.; Receipt of Application for Limited Extension of Temporary Exemption From Certain Requirements of FMVSS No. 208

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AGENCY:

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

ACTION:

Notice of receipt of petition for limited extension of a Temporary Exemption from provisions of Federal Motor Vehicle Safety Standard (FMVSS) No. 208, Occupant Crash Protection.

SUMMARY:

In accordance with the procedures of 49 CFR Part 555, Spyker Automobielen B.V. (“Spyker”) has applied for a limited extension of a previously received temporary exemption from certain requirements of FMVSS No. 208, Occupant Crash Protection, for the Spyker C8 vehicle line. Spyker requests extension of its temporary exemption for certain advanced air bag requirements. The basis of the application is that compliance would cause substantial economic hardship to a manufacturer that has tried in good faith to comply with the standard.

NHTSA is publishing this notice of receipt of the application in accordance with the requirements of 49 U.S.C. 30113(b)(2), and has made no judgment on the merits of the application.

DATES:

You should submit your comments not later than June 26, 2008.

Comments: We invite you to submit comments on the application described below. You may submit comments identified by docket number in the heading of this notice by any of the following methods:

  • Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting comments.
  • Mail: DOT Docket Management Facility, M-30, U.S. Department of Transportation, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590.
  • Hand Delivery or Courier: U.S. Department of Transportation, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m. ET, Monday through Friday, except Federal holidays.
  • Fax: (202) 493-2251.

Instructions: All submissions must include the agency name and docket number. Note that all comments Start Printed Page 30444received will be posted without change to http://www.regulations.gov, including any personal information provided.

Privacy Act: Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78).

Docket: For access to the docket in order to read background documents or comments received, go to http://www.regulations.gov at any time, or to M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20950, between 9 a.m. and 5 p.m. ET, Monday through Friday, except Federal holidays.

Confidential Business Information: If you wish to submit any information under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Chief Counsel, NHTSA, at the address given under FOR FURTHER INFORMATION CONTACT. In addition, you should submit two copies, from which you have deleted the claimed confidential business information, to Docket Management at the address given above. When you send a comment containing information claimed to be confidential business information, you should include a cover letter setting forth the information specified in our confidential business information regulation (49 CFR part 512).

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FOR FURTHER INFORMATION CONTACT:

Sarah Alves, Office of the Chief Counsel, NCC-112, National Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590. Phone: 202-366-2992; Fax: 202-366-3820; E-Mail: sarah.alves@dot.gov.

Discussion

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.

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 earlier. 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 air bag systems compared to potential benefits discouraged some air bag suppliers from working with small volume manufacturers.

The agency has carefully tracked occupant fatalities resulting from air bag deployment. Our data indicate that the agency's efforts in the area of consumer education and manufacturers' providing depowered air bags were successful in reducing air bag fatalities even before advanced air bag requirements were implemented.

As always, we are concerned about the potential safety implication of any temporary exemptions granted by this agency. In the present case, we are seeking comments on a petition for a limited extension of a temporary exemption for certain advanced air bag requirements submitted by a manufacturer of high-performance sports cars.

II. Overview of Petition for Economic Hardship Exemption

In accordance with 49 U.S.C. 30113 and the procedures in 49 CFR part 555, Spyker has petitioned the agency for a limited extension of a temporary exemption from certain requirements of FMVSS No. 208. The basis for the application is that compliance would cause substantial economic hardship to a manufacturer that has tried in good faith to comply with the standard. The requested exemption would apply to the Spyker C8 vehicle line and would extend a portion of the original exemption for a period of 30 months beginning on June 15, 2008, ending on December 15, 2010. The requested extension would apply to certain advanced air bag requirements, specifically the requirements in S19, S21, S23, and S25. A copy of the petition [2] is available for review and has been placed in the docket of this notice.

III. Statutory Background for Economic Hardship Exemption

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(a)(5)) 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.

IV. Petition

Background. 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)). Spyker manufactured 94 automobiles in 2006 and estimated a total production of 106 automobiles in 2007. Sixty Spyker automobiles were imported into the U.S. in 2006, and Spyker projects that U.S. imports will total 70 Spyker Start Printed Page 30445automobiles in 2007. Spyker is a wholly owned subsidiary of Spyker Cars NV, a publicly traded Dutch company. Spyker stated that it is unaware of any other automobile manufacturer having an ownership interest in Spyker.[3] Moreover, Spyker stated that Spyker Cars NV has no ownership interest in any other vehicle manufacturer, and is not under any common control with another automobile manufacturer.

In July 2005, NHTSA granted Spyker a three-year hardship exemption from the “basic” air bag requirements and advanced air bag provisions of FMVSS No. 208 (S4.1.5.3; S14), and Part 581, expiring on June 15, 2008 (70 FR 39007; July 6, 2005). In this same grant, NHTSA also exempted Spyker from S7 of FMVSS No. 108, for the first 10 Spyker C8 vehicles imported into the United States.

Requested exemption. Spyker has applied for a limited extension of that exemption. Spyker requested an additional 30 months for the exemption from the child and 5th percentile adult female driver out-of-position portions of the advanced air bag provisions of FMVSS No. 208 (S19, S21, S23, and S25).[4] Spyker's current exemption extends until June 15, 2008, and Spyker requested a two-and-a-half year extension that would exempt Spyker's C8 vehicle line from the listed advanced air bag requirements through December 15, 2010.[5]

Economic hardship. Spyker stated that its previously established financial hardship [6] continues, in part due to the start-up nature of the company. Specifically, Spyker's financial information submission showed a net operating loss of 13,000,000 Euros ($16,900,000) from 2004 to 2006. Spyker projected a further loss in 2007 of 6,500,000 Euros ($8,450,000).[7] Moreover, based on 2008-2010 projections, Spyker estimated that if the limited extension is denied, Spyker will bear a loss of over 2,000,000 Euros ($2,600,000) during that time. Spyker also stated that the loss of sales in the U.S. that would result if the limited extension is denied could not be made up in the rest of the world because the U.S. is the largest and most important market for the vehicle. Spyker argued that such consequences demonstrate “substantial economic hardship” within the meaning of 49 U.S.C. 30113(b)(3)(B)(i).

Spyker recently submitted to NHTSA a supplement to their petition because Spyker recently updated its accounts for 2007. Spyker stated in its supplement to its petition that 2007 losses now total 16,000,000 Euros ($20,800,000), and stated that this higher number was due to their parent company having sold its interest in its Formula 1 (“F1”) racing team, and extraordinary financing and consulting costs. Spyker stated in this supplement to its petition that the new financial statement information is in further support of the substantial economic hardship criterion. Both Spyker's original petition and its recently filed supplement to the petition are available in this docket.

Good faith efforts to comply. Spyker stated that when it filed for the original exemption, the C8 vehicle line had no air bag system at all, and that the windshield design does not permit a top-mounted air bag on the passenger side, thereby precluding the use of a low risk deployment system. Spyker indicated that it has spent over 3,500,000 Euros bringing the C8 vehicle line into compliance with all of the high-speed belted and unbelted crash test requirements of the Advanced Air Bag rule by developing an “interim” driver air bag system for the C vehicle line. However, it stated that it has not been able to bring the vehicle into compliance with the child out-of-position requirements (S19, S21, and S23), and the 5th percentile adult female out-of-position requirements for the driver seat (S25). Spyker stated that despite efforts to involve numerous potential suppliers, it has not identified any that are willing to work with the company to develop an automatic suppression system for compliance with S19, S21, and S23. Spyker has budgeted an additional 3,500,000 Euros for 2008-2010 to develop, test and build a fully-compliant advanced air bag system for the new C line vehicle. Spyker also indicated that by the time its new D vehicle line is launched, Spyker will have spent 5,500,000 Euros developing for this new line an advanced air bag system fully compliant with FMVSS No. 208.

Spyker further indicated that it plans to re-engineer the C vehicle line for model year 2011, at which time the D line advanced air bag system will be incorporated into the new C line, making the redesigned C line fully compliant with all advanced air bag requirements. Spyker stated that it will use the 30 month extension period, if granted, to develop, test, tool and implement the redesigned model.

Spyker argues that an exemption would be in the 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:

1. Spyker stated that the exempted vehicles will comply with all FMVSSs other than the provisions that are the subject of this extension request.

2. The petitioner stated that an exemption will benefit U.S. employment and U.S. companies because Spyker vehicles are distributed by a U.S. company, Spyker of North America, and are sold and serviced in the U.S. through a network of 17 dealers. Spyker argued that denial of an extension will negatively impact these companies.

3. Spyker argued that if the exemption is not granted, U.S. consumer choice would be harmed and that the agency has long maintained that the National Traffic and Motor Vehicle Safety Act seeks, if possible, to avoid limiting consumer choice.

4. Petitioner argued that given its exotic design and high-performance nature, the C vehicle line is not expected to be used extensively, nor is it expected to carry children with any frequency.

5. Spyker stated that as of the submission date of its application for extension, approximately 60 exempted C line Spykers have been imported into the U.S. and there have been no reports of any air bag-related injuries.

6. Spyker stated that an important safety feature on the C line offers enhanced occupant protection. The petitioner stated that occupants are positioned in a protective “cell” because the main chassis structure is built around them.

V. Issuance of Notice of Final Action

We are providing a 30-day comment period. After considering public comments and other available information, we will publish a notice of final action on the application in the Federal Register.

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Issued on: May 19, 2008.

Stephen R. Kratzke,

Associate Administrator for Rulemaking.

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Footnotes

1.  See 65 FR 30680 (May 12, 2000).

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2.  The company requested confidential treatment under 49 CFR part 512 for certain business and financial information submitted as part of its petition for temporary exemption. Accordingly, the information placed in the docket does not contain such information that the agency has determined to be confidential.

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3.  Only parties with an interest of more than 5% are known and need to register with the Dutch authority for financial markets.

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4.  The previous exemption covered these provisions by including S14.

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5.  Spyker submitted a supplement to their petition on April 7, 2008, which will be posted in this docket, and which included updated financial information from 2007.

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6.  See 70 FR 39007 (July 6, 2005).

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7.  All dollar values are based on an exchange rate of 1 Euro = $1.30.

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[FR Doc. E8-11699 Filed 5-23-08; 8:45 am]

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