[Federal Register Volume 60, Number 43 (Monday, March 6, 1995)]
[Notices]
[Pages 12281-12282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5322]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
[Docket No. 94-100; Notice 2]
Excalibur Automobile Corporation; Grant of Application for
Temporary Exemption From Motor Vehicle Safety Standard No. 208
Excalibur Automobile Corporation of West Allis, Wisconsin, applied
for a temporary exemption of its JAC 427 Cobra passenger car for three
years from compliance with paragraph S4.1.4 of Federal Motor Vehicle
Safety Standard No. 208 Occupant Crash Protection. The basis of the
application was that compliance would cause substantial economic
hardship to a manufacturer that has tried to comply with the standard
in good faith.
Notice of receipt of the application was published on December 28,
1994, and an opportunity afforded for comment (59 FR 66999). This
notice grants the application.
The applicant sought an exemption for its JAC 427 Cobra passenger
car, of which it produced 59 between January 1993 and September 1994.
Thirty-six of these ``are presently in the control of Excalibur's
dealers'', and the applicant asked that the exemption cover these
vehicles so that they may be offered for sale and sold in compliance
with the law. It plans increased production in 1995, of which 60 to 108
would be sold in the United States.
Excalibur is a small company with 37 employees and net assets of
$3,000,000. The company has had cumulative net losses of $4,493,000
from January 1, 1992 to September 30, 1994. If it were required to
comply immediately with the automatic restraint requirements of
Standard No. 208, it would have to raise the retail price by more than
300 per cent which ``is likely to deemed (sic) to be prohibitive by
potential purchasers (and dealers), thereby significantly reducing the
line's desirability, if not ending the demand entirely * * *.'' Denial
of the petition would result in a reduction of the work force to 8
employees.
Excalibur has been owned since 1991 by German residents, who
changed the company's management in August 1994. The new management has
not been able [[Page 12282]] to trace the company's efforts to comply
beyond December 1993 when the then Vice President of Production
informed the then President that he had ``just located a potential
source for a retrofit driver's as well as passenger air bag system.''
Compliance was anticipated ``within weeks.'' NHTSA was likewise
informed of this possibility in December 1993. On May 31, 1994, in an
incomplete petition for exemption from Standard No. 208, Excalibur
informed the agency that its efforts to work with companies in Arizona
and Florida had ended in frustration and failure and that it was
currently unable to find a source for an adequate, workable airbag
system.
According to its application, Excalibur will use the exemption
period ``to accommodate a fully-complying airbag system.'' It is
investigating the possibility of installing Ford Mustang steering
columns and airbag systems, as well as whether its existing column
could accept an airbag produced by Breed Technologies. Exempted
vehicles would be provided with a three-point restraint system as well
as with a ``clearly visible warning label reminding the vehicle's
occupants of the importance of wearing their safety belts.
The company argued that an exemption would be in the public
interest and consistent with the objectives of motor vehicle safety
because it presently has 17 dealers in 12 states, and ``a thriving
manufacturing business and dealer network not only provides employment,
but will generate federal and state tax revenues.'' The small number of
vehicles that the exemption will cover and the limited mileage they
will be driven ensure that an exemption ``will not materially affect
overall motor vehicle safety in the U.S.''
No comments were received on the application. That the applicant is
experiencing ``substantial economic hardship'' within the meaning of
the phrase, as interpreted by NHTSA, over the years, is demonstrated by
its continuing and cumulative losses of approximately $4.5 million over
the 2 3/4 year period previous to filing its application. The applicant
has recently informed NHTSA that at least two of its dealers are
seeking to terminate their dealership agreements and to require
Excalibur to repurchase vehicles in stock because of their failure to
meet the automatic restraint requirements of Standard No. 208.
The efforts of the applicant to make a good faith effort to comply
with Standard No. 208 appear to have originated with the company's new
ownership in 1991. NHTSA is aware that small manufacturers of open
cars, such as Excalibur, have found it difficult to engineer an airbag
system into their existing steering columns, let alone to find a
supplier interested in providing only a low volume of airbags.
The public interest is served, of course, as the applicant argues,
by providing continuing employment to those who manufacture, sell, and
repair Excalibur vehicles, as well as the benefits derived from the
generation of Federal and state tax revenues. It is also in the public
interest to avoid litigation where possible and an exemption may
forestall actions against the applicant by its dealers, which would
contribute further to its hardship. The overall effect upon motor
vehicle safety will be negligible due to the small number of cars that
will be manufactured and sold under it, which will be equipped with a
three-point restraint system and a label reminding the two passengers
of the need to use their safety belts.
The company has also asked that the exemption cover the vehicles
currently in the hands of its dealers. This is an unusual request. Only
once before has the agency been petitioned to grant an exemption to
motor vehicles already in existence. In 1989, Chrysler Corporation
manufactured several electric vans for research purposes which, three
years later, in 1992, it wished to sell or lease to a public utility in
California. As the purpose of a temporary exemption is to allow a
company for a limited time to engage in activities that would otherwise
be in violation of the statute, the agency granted Chrysler's petition.
NHTSA noted that an exemption would permit Chrysler to offer for sale,
sell, introduce and deliver for introduction into interstate commerce
noncomplying motor vehicles, acts otherwise prohibited (See 57 FR
27506). The fact situation is somewhat different here in that
noncomplying vehicles have already been manufactured for sale and
delivered for introduction into interstate commerce, in violation of 49
U.S.C. 30112(a). The agency has no authority to excuse retroactively
statutory violations, and these are acts for which NHTSA has the right
to seek recovery of civil penalties. However, an exemption will allow
the company to generate income and its dealers to offer for sale, sell,
and introduce into interstate commerce the vehicles that are currently
in their possession.
The applicant requested an exemption for the maximum permissible
under statute, three years. Given the fact that the company began its
compliance efforts in 1993 if not earlier, the agency believes that
full compliance with Standard No. 208 should be the company's
regulatory priority, and is providing an exemption of two years. This,
of course, does not affect the right of the applicant to petition for a
renewal if compliance remains elusive.
In consideration of the foregoing, it is hereby found that
compliance with the automatic restraint requirements of Standard No.
208 would cause substantial economic hardship to a company that has
tried to comply with the standard in good faith, and that an exemption
would be consistent with the public interest and motor vehicle safety.
Accordingly, Excalibur Automobile Corporation is hereby granted NHTSA
Temporary Exemption No. 95-1 from paragraph S4.1.4 of 49 CFR 571.208
Motor Vehicle Safety Standard No. 208 Occupant Crash Protection,
expiring March 1, 1997.
Authority: 49 U.S.C. 30113; delegation of authority at 49 CFR
1.50.
Issued on: February 28, 1995.
Ricardo Martinez,
Administrator.
[FR Doc. 95-5322 Filed 3-3-95; 8:45 am]
BILLING CODE 4910-59-P
