Denial of Petition for Rulemaking; Federal Motor Vehicle Safety Standards

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 571

Denial of Petition for Rulemaking; Federal Motor Vehicle Safety

Standards

AGENCY: National Highway Traffic Safety Administration (NHTSA),

Department of Transportation.

ACTION: Denial of petition for rulemaking.

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SUMMARY: This document denies a petition for rulemaking submitted by

the Coalition of Small Volume Automobile Manufacturers (COSVAM). COSVAM

requested that small volume automobile manufacturers be given

additional time to comply with the phase-in of the upper interior head

protection requirements of Federal Motor Vehicle Safety Standard No.

201, Occupant Protection in Interior Impact. Specifically, COSVAM

requested that the agency initiate a rulemaking proceeding to create

alternative compliance dates to address concerns of manufacturers

producing or importing 10,000 vehicles per year or less. The petitioner

based its request on the argument that compliance costs for such

manufacturers would be disproportionately burdensome. NHTSA denies this

petition because the agency

[[Page 6592]]

has already established a variety of compliance schedules that afford

these manufacturers sufficient compliance flexibility.

FOR FURTHER INFORMATION CONTACT:

For non-legal issues: Dr. William Fan, Office of Crashworthiness

Standards, NPS-11, telephone (202) 366-4922, facsimile (202) 366-4329,

electronic mail ``[email protected]''

For legal issues: Otto Matheke, Office of the Chief Counsel, NCC-

20, telephone (202) 366-5253, facsimile (202) 366-3820, electronic mail

``[email protected]''.

SUPPLEMENTARY INFORMATION:

Background on Existing Requirements

NHTSA issued a final rule on August 18, 1995, amending Federal

Motor Vehicle Safety Standard No. 201, Occupant Protection in Interior

Impact, to require passenger cars, and trucks, buses and multipurpose

passenger vehicles with a gross vehicle weight rating of 4,536

kilograms (10,000 pounds) or less, to provide head protection during a

crash when an occupant's head strikes the upper interior, i.e., the

pillars, side rails, headers, and the roof of the vehicle. (60 FR

43041) This final rule, which mandated compliance with the new

requirements beginning on September 1, 1998, significantly expanded the

scope of Standard 201. Previously, the standard applied to the

instrument panel, seat backs, interior compartment doors, arm rests and

sun visors. To determine compliance with the upper interior impact

requirements, the final rule added procedures for a new in-vehicle

component test in which a Free Motion Headform (FMH) is fired at

certain target locations on the upper interior of a vehicle at an

impact speed of 24 km/h (15 mph). Data collected from a FMH impact are

translated into a value known as a Head Injury Criterion (HIC) score.

The resultant HIC must not exceed 1000.

The standard, as further amended on April 8, 1997 (62 FR 16718),

provides manufacturers with four alternate phase-in schedules for

complying with the upper interior impact requirements. First, as set

forth in S6.1.1, manufacturers may comply by having the following

percentages of their production meet the upper interior impact

requirements: 10 percent of production on or after September 1, 1998

and before September 1, 1999; 25 percent of production on or after

September 1, 1999 and before September 1, 2000, 40 percent of

production on or after September 1, 2000 and before September 1, 2001,

70 percent of production on or after September 1, 2001 and before

September 1, 2002, and 100 percent of production after September 1,

2002.

Second, an alternative schedule set forth in S6.1.2 provides that

manufacturers may comply by meeting the following phase-in schedule: 7

percent of the vehicles manufactured on or after September 1, 1998 and

before September 1, 1999; 31 percent of vehicles manufactured on or

after September 1, 1999 and before September 1, 2000; 40 percent of

vehicles manufactured on or after September 1, 2000 and before

September 1, 2001; 70 percent of vehicles manufactured on or after

September 1, 2001 and before September 1, 2002; and 100 percent of all

vehicles manufactured after September 1, 2002.

Third, under the phase-in schedule set forth in S6.1.3,

manufacturers need not produce any complying vehicles before September

1, 1999. However, all vehicles produced on or after that date must

comply. Fourth, under the phase-in schedule set forth in S 6.1.4 that

applies only to final stage manufacturers, no vehicle produced before

September 1, 2002, need comply. However, all vehicles manufactured on

or after that date must comply.

The August 14, 1996 Petition for Rulemaking

The Coalition of Small Volume Automobile Manufacturers (COSVAM)

1 submitted a petition for rulemaking on August 14, 1996

seeking to amend Standard 201 so that Small Volume Manufacturers (SVMs)

would not be required to produce any cars meeting the upper interior

head impact protection requirements between September 1, 1998 and

September 1, 2004. Under the amendments requested by COSVAM in its

petition, single stage SVMs would not have had to produce any vehicles

meeting the upper interior impact requirements until September 1, 2004.

On and after that date, all SVMs would have had to meet those

requirements.

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\1\ COSVAM consists of 19 manufacturers, each of which produces

fewer than 5000 vehicles world wide each year.

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The December 18, 1997 Petition for Rulemaking

On November 5, 1997, COSVAM withdrew its August 14, 1996 petition

and submitted a new petition on December 18, 1997. This second petition

asked that the agency consider three possibilities:

revising an existing phase-in schedule generally available

to all manufacturers,

adopting an additional alternative phase-in that might

either be generally available to all manufacturers or available to SVMs

only, or

adopting an additional alternative phase-in available to

SVMs only.

More specifically, COSVAM suggested first that the agency revise an

existing schedule found in S6.1.3 of the Standard (known as phase-in

schedule #3). This schedule specifies that manufacturers need not

produce any vehicles that comply with the head impact protection

provisions of Standard 201 in the period after August 31, 1998 and

before September 1, 1999 if all the vehicles they produce on or after

September 1, 1999 comply with the head impact protection requirements.

COSVAM suggested that this schedule be modified so that manufacturers

need not produce any complying vehicles before September 1, 2000 if all

the vehicles they produce after September 1, 2000 comply.

Second, COSVAM suggested that the agency consider creating an

additional phase-in schedule, which COSVAM suggested might only apply

to SVMs. Under this schedule, five percent of a manufacturer's

production for the time period between September 1, 1998 and August 31,

1999 must comply with the head impact requirements, fifteen percent of

production between September 1, 1999 and August 31, 2000 must comply,

fifty percent of production between September 1, 2000 and August 31,

2001 must comply, seventy percent of production between September 1,

2001 and August 31, 2002 must comply and all production after September

1, 2002 must comply.

Third, COSVAM asked that NHTSA consider creating a phase-in

expressly for single stage SVMs. Such a phase-in would delay compliance

for these manufacturers until on or after September 1, 2004. For the

purposes of determining which companies are SVMs and thus eligible to

elect to comply with this alternative phase-in, COSVAM suggested that

NHTSA define an SVM as ``any automobile producer that either

manufactures 10,000 or fewer vehicles in the United States or imports

fewer than 10,000 vehicles into the U.S.'' In suggesting this

definition, COSVAM contended that setting a limit of 10,000 vehicles

produced in, or imported into, the U.S. is consistent with existing

statutory provisions relating to exemption from fuel economy and safety

standards.

COSVAM offered several arguments in support of its requests. First,

because

[[Page 6593]]

of their limited resources, SVMs do not have the ability to fund

substantial redesigns of vehicles or their components. In addition, the

financial burden associated with redesign is exacerbated by the limited

production of SVMs, whose low volume makes it harder to recoup costs.

COSVAM also contended that the impact of a phase-in, regardless of the

percentages involved, is greater on SVMs. This is because such

manufacturers frequently produce only one or two different models and

these models are often produced over many model years. As a result,

lead times are often very long. Design changes and improvements cannot

be integrated into a new or redesigned model, but must be integrated

into existing products. As an example, COSVAM provided information

relating to the Lotus Esprit, whose basic body style has remained

unchanged for 20 years, and the severe difficulties that the

manufacturer would face in attempting to bring this design into

compliance with the head protection requirements. Lotus estimated that

complying with upper interior impact requirements would require an

expenditure of 348,000 (approximately $585,197 US

Dollars), due in large part to the necessity of redesigning the vehicle

pillars and roof. Based on these costs, and the fact that the company

was planning to replace the Esprit platform sometime after 2000, Lotus

indicated that it would not be cost-effective for the company to

produce an Esprit model that would meet those requirements. Therefore,

according to COSVAM, if a substantial redesign were required, an SVM

might have to produce an entirely new model. The low production volume

of these manufacturers also results in disproportionately high costs.

These costs, according to COSVAM, not only relate to production, but

also to development and testing. This results from an SVM's need to

perform compliance testing with fewer vehicles produced and fewer

opportunities to distribute such testing costs through increased

prices.

COSVAM also stated that in creating a separate phase-in schedule

for final stage manufacturers, NHTSA recognized that such manufacturers

have little control over the year of the phase-in in which a particular

vehicle will be certified as meeting the new requirements. SVMs, in

COSVAM's view, suffer from similar lack of control over their ability

to produce vehicles with interiors that will meet Standard 201. COSVAM

submitted that just as final stage manufacturers have no control over

when their suppliers will provide them with compliant interiors in

incomplete vehicles, SVMs have no control over when suppliers of safety

systems will be willing to meet the needs of the SVM market. This

problem is particularly acute, according to COSVAM, because safety

system suppliers will only meet the needs of SVMs after they have

addressed those of their larger customers.

The COSVAM petition also indicated that, as evidenced by requests

for interpretation filed with NHTSA by the Association of International

Automobile Manufacturers (AIAM) and a petition for reconsideration

filed by the American Automobile Manufacturers Association (AAMA), a

number of technical issues relating to compliance with Standard 201

remained unresolved. According to COSVAM, the existence of these

unresolved technical issues illustrates the difficulties inherent in

complying with Standard 201. The petitioner argued that the

difficulties are more acute for small manufacturers because of their

limited resources.

COSVAM also suggested that the requested phase-in would be

consistent with regulatory reform and recent legislative initiatives

seeking to ease regulatory burdens on small businesses. COSVAM

contended that many of its members are small businesses and that the

requested SVM phase-in would help to minimize regulatory burdens on

these small businesses.

Finally, COSVAM indicated that providing a special phase-in for

SVMs would be consistent with other agency actions. In particular,

COSVAM cited a recent change in the requirements for compliance with

Standard 208's seat belt comfort and fit provisions for trucks with a

gross vehicle weight rating (GVWR) between 3,402 and 4,536 kilograms

(7,500 and 10,000 lbs.). In that instance, NHTSA granted a petition for

rulemaking to changing a compliance date from September 1, 1997, to

January 1, 1998, in response to a petition filed by a manufacturer

indicating that a new product line incorporating the required feature

would not be in production until January 1, 1998. Based on the

relatively small impact on safety that would result from a four month

change in the compliance date, NHTSA granted the petition. COSVAM

argues that its request for a change in the Standard 201 phase-in

requirements is similar in that the existing phase-in would impose a

severe burden on its members and that the safety impact would be

minimal, due to the low U.S. sales of vehicles manufactured by SVMs.

Agency Analysis

NHTSA is well aware that compliance with safety standards may

involve different burdens on manufacturers, depending on their size,

technical sophistication and resources. The agency acknowledges that

conforming with and adapting to increased requirements may be more

difficult for manufacturers that have limited product lines and produce

a relatively small number of vehicles in any given model year. However,

the agency believes it has given due consideration to the difficulties

faced by smaller manufacturers. In promulgating the August 1995 final

rule, NHTSA created an alternative phase-in schedule for manufacturers

with few vehicle lines. That phase-in allows these manufacturers to

delay compliance during the first year of the phase-in, which begins on

September 1, 1998. Manufacturers selecting this option, however, must

certify all vehicles manufactured on or after September 1, 1999 as

meeting the new requirements. Those manufacturers that chose this

option had four years of lead time to meet the new requirements. This

four-year lead time is, in the agency's view, sufficient to meet the

needs of smaller manufacturers. The agency notes that one purpose of a

phase-in is to enable vehicle manufacturers the opportunity to decide

which models to redesign first. As a practical matter, full-line

manufacturers were required to redesign at least one model to meet the

new requirements by September 1, 1998. The alternative phase-in

designed for limited line manufacturers provided a full additional year

to meet the new requirements.

In seeking an alternative phase-in, COSVAM contends that such

schedules would be appropriate because SVMs face the same challenges as

final stage manufacturers. The agency has given specific consideration

to final stage manufacturers 2 in Standard 201 and other

standards for which phase-ins have been employed. In the vast majority

of cases, final stage manufacturers are provided with an incomplete

vehicle that has been certified by its manufacturer as meeting

applicable standards. Moreover, a final stage manufacturer may need to

use one

[[Page 6594]]

particular model for its purposes. Final stage manufacturers must,

therefore, rely on incomplete vehicle manufacturers to provide a

complying product. If this model is one that the incomplete vehicle

manufacturer chooses to redesign last, final stage manufacturers and

alterers may be forced to reduce or even suspend production and wait

until the end of a phase-in to obtain a complying incomplete vehicle

that they can use.

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\2\ The term ``final stage manufacturer'' is defined at 49 CFR

568.3 as ``a person who performs such manufacturing operations on an

incomplete vehicle that it becomes a completed vehicle.'' An

``incomplete vehicle'' is defined in that section as ``an assemblage

consisting, at a minimum, of frame and chassis structure, power

train, steering system, suspension system, and braking system * * *

that requires further manufacturing operations * * * to become a

completed vehicle.''

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Unlike final stage manufacturers, who are dependent upon the

incomplete vehicle manufacturers providing them with a particular

complying incomplete vehicle, single stage SVMs need not wait for

another manufacturer to produce a particular model that meets Standard

201. Further, SVMs have greater control over the configuration and

design of the vehicles they produce. COSVAM's argument implies that

such control is irrelevant; it submits that its members cannot obtain

the components or materials needed to bring vehicles into compliance.

While alleging that its members cannot procure the required materials

or components, COSVAM has not submitted any evidence indicating that

this is so.

One means of compliance is the addition of padding to interior

surfaces. In developing the August 18, 1995 final rule (60 F.R. 43041)

adding requirements for upper interior impact protection requirements

to Standard No. 201, NHTSA performed an analysis of the effect of

different padding thicknesses on existing passenger cars and LTVs

(i.e., light trucks, vans and sport utility vehicles) and determined

that all of the sampled passenger cars and LTVs could meet the 19 km/h

(12 mph) impact speed with one-half inch of additional padding on the

A-pillars, side rails and B-pillars. Since the vehicles examined by the

agency and designed prior to the August 1995 amendments to Standard 201

would require additional padding of a half inch or less to provide

adequate protection in a 19 km/h (12 mph) FMH impact, NHTSA believes

that the use of additional padding may provide a means for meeting the

24 km/h (15 mph) impact requirement set forth in the August 1995 final

rule. The procurement and application of such padding, is not, in

NHTSA's view, a task which would necessitate the additional lead time

requested by COSVAM.

Moreover, there are other means of compliance. Manufacturers may

choose whatever means they wish to meet the upper interior head

protection requirements of Standard 201. NHTSA observes that many

manufacturers are meeting those requirements by applying energy

absorbing ribs and other structures on the under or rear side of

plastic trim components. This adaptation of existing designs has

allowed manufacturers to comply without abandoning basic trim concepts

and materials that have been in use for many years.

The petitioner also contends that its member companies would face

financial hardship in complying with the existing phase-in. While the

per vehicle cost of any required redesign will be higher for SVMs, many

of these manufacturers are in a position to pass these costs on to the

purchasers of these vehicles. At the time of filing the petition at

issue, COSVAM represented 19 vehicle manufacturers and suppliers. Many

COSVAM member companies are specialty or luxury car manufacturers such

as AM General, Rolls-Royce, Maserati, Lamborghini, Ferrari, and Aston

Martin. While it is true that many of these manufacturers sell a small

number of cars in the United States each year, many of these vehicles

are quite sophisticated, particularly those in the high performance

market segment. Given the existing prices of these vehicles, which

indicates that their target markets are not particularly price

sensitive, NHTSA believes that additional costs associated with

compliance may be addressed by price increases.

Several luxury and higher priced performance cars have been, or

will soon be, equipped with advanced dynamic head protection systems

such as side air bags to cover the A/B-pillars and front side rails. It

is anticipated that a number of large automobile manufacturers,

especially several European companies, will introduce advanced dynamic

systems to certain vehicle models. It appears that some advanced

dynamic systems are already available, well before the deadline of one

of the optional phase-in schedules already available to single stage

SVMs--September 1, 1999. NHTSA believes, and COSVAM has not submitted

any evidence to the contrary, that single stage manufacturing SVMs

could have adopted one of the advanced dynamic systems being shown by

suppliers of large vehicle manufacturers.

COSVAM sought to invoke as precedent a prior instance in which a

manufacturer successfully petitioned the agency to amend the phase-in

requirements for Standard 208 for a certain class of trucks. In that

particular case, the petitioner alleged that it would be introducing a

new model designed to meet new safety belt comfort and fit requirements

on January 1, instead of September 1 of the preceding year. In its

analysis of that earlier petition, NHTSA noted that the class of

vehicle involved, trucks with a gross vehicle weight rating of 8,500 to

10,000 pounds, was less likely to be driven or used by occupants who

would benefit from improvements in safety belt comfort and fit. In

changing the phase-in requirements for this class of vehicle, the

agency's action resulted in a four month delay in the implementation of

the comfort and fit requirements. In that case, both the delay and the

safety consequences of that delay were minimal. The vehicles involved

were still required to have safety belts that provided the same degree

of protection in a frontal impact as belts used in other vehicles. Any

reduction in safety was limited solely to the number of occupants who

may have been deterred from using safety belts because they were in a

vehicle produced during that four month period which did not meet the

comfort and fit requirements.

In contrast, one alternative compliance schedule sought by COSVAM

would exclude all SVMs from any requirement to produce vehicles

complying with the upper interior head impact protection requirements

of Standard 201 until September 1, 2004. Under that suggested

compliance schedule, single stage SVMs would not be required to meet

the upper interior head protection requirements until nine years after

promulgation of the final rule and six years after any other

manufacturers, except final stage manufacturers, began producing

conforming vehicles. This additional length of time presents an

additional risk to safety, particularly in light of the fact that,

unlike the comfort and fit requirements which mandated refinement of an

existing safety measure, the upper interior head impact protection

requirements require manufacturers to introduce completely new safety

features.

Another alternative compliance schedule suggested by COSVAM would

also have a more significant impact on safety than the modification of

the comfort and fit compliance schedule it cites in support of its

petition. In one proposal offered by COSVAM, existing phase-in schedule

#3, found at S6.1.3 of Standard 201, would be modified to provide all

manufacturers with an additional year during which they would not have

to produce vehicles meeting the requirements. Phase-in #3 currently

provides that manufacturers do not have to produce any vehicles meeting

the requirements during the period from September 1, 1998 to August 31,

1999, provided that all vehicles produced on or after September

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1, 1999 comply. The COSVAM petition requests that NHTSA modify this

schedule so that manufacturers need not produce vehicles meeting the

requirements during the period from September 1, 1998 to August 31,

2000, provided that all production after September 1, 2000 complies.

The agency observes that COSVAM's proposed extension of the compliance

schedule under Phase-in #3 by one year, thereby delaying implementation

of measures to reduce head injuries in crashes, would have a

significant impact on safety.

COSVAM's December 1997 submission also requested that the agency

add a new phase-in schedule to Standard 201. This new phase-in would

specify that five percent of a manufacturer's production for the time

period between September 1, 1998 and August 31, 1999 must comply with

the upper interior head impact requirements, 15 percent of production

between September 1, 1999 and August 31, 2000 must comply, 50 percent

of production between September 1, 2000 and August 31, 2001 must

comply, 70 percent of production between September 1, 2001 and August

31, 2002 must comply, and all production after September 1, 2002 must

comply.

NHTSA notes that this suggested phase-in schedule seems ill suited

to provide COSVAM with the relief that it argues that its members must

have. COSVAM's principal arguments are that SVMs face difficulties in

redesigning vehicles, lack flexibility because they have limited

numbers of vehicle lines and are unable to procure materials and

technology needed for compliance because suppliers will meet the needs

of larger manufacturers first, before attending to small manufacturers.

The alternative offered here differs from existing phase-in schedules

#1 and #2 by requiring that smaller percentages of production comply in

the first two years with a larger percentage complying in the third

year. In the fourth year and beyond, the proposed phase-in is identical

to existing alternatives #1 and #2. Such a phase-in, while offering

relaxed requirements for the first two years, seems ill suited to

accommodate manufacturers that allegedly cannot obtain the parts or

technology required for compliance at the same time that larger

manufacturers can. It is also not clear how such a schedule would

better meet the needs of producers with few vehicle lines than the

existing schedules do. The most specific information supplied by the

petitioner, relating to the Lotus Esprit, indicates that the

alternative suggested in this instance would offer no relief

whatsoever. COSVAM has not offered any data or arguments directly or

indirectly supporting this particular option. It is therefore difficult

for the agency to consider it, particularly when the relaxed

requirements would entail additional safety risks in the first two

years and an overall net loss in safety.

In support of the phase-in alternatives suggested in its petition,

COSVAM also argued that the existence of certain testing and compliance

questions, evidenced by inquiries by the AAMA and AIAM, illustrate the

technical difficulties involved in complying with the upper interior

head protection requirements. According to COSVAM, problems posed by

these issues, and similar technical questions, place a disproportionate

burden on small manufacturers because of their limited resources. NHTSA

begins by noting that it is not uncommon for new FMVSS requirements to

produce technical questions. While the agency notes that the upper

interior head impact requirements have produced, and will undoubtedly

continue to produce, technical questions relating to testing and

compliance that must be resolved by manufacturers or the agency, NHTSA

notes that some of the issues have already been resolved. Further, the

questions raised by those groups, and others, have generally related to

interpretation of the upper interior head impact requirements and the

associated test procedures. These issue are, in NHTSA's view, not

issues that a larger manufacturer can more readily resolve than a small

one could.

NHTSA also observes that if an SVM encounters special difficulties

in developing and/or adopting a safety countermeasure, it may choose to

file a petition for exemption in accordance with the criteria and

procedures outlined in Part 555--Temporary Exemption From Motor Vehicle

Safety Standards. NHTSA is authorized by 49 U.S.C. 30113 to exempt, on

a temporary basis, a manufacturer whose total yearly production does

not exceed 10,000 motor vehicles, from any FMVSS that would cause the

manufacturer substantial economic hardship should it be required to

meet it immediately. The application procedures for such an exemption

are contained in 49 CFR 555.5 and 555.6(a). The applicant must not only

show hardship, but also that it has tried in good faith to meet the

standard from which it requests relief.

If, as COSVAM asserts, compliance with Standard 201 would create

substantial financial hardship for its member companies, those

companies would have the option of applying for an exemption. NHTSA

also notes that if an SVM is unable to procure safety equipment from

suppliers, as COSVAM alleged its members will, because such suppliers

give priority to addressing the needs of larger customers, the efforts

of a manufacturer to secure this safety equipment may well be

considered as evidence of a good faith effort to meet a standard from

which the manufacturer seeks exemption.

Conclusion

In accordance with 49 CFR part 552, this completes the agency's

review of the petition. The agency has concluded both that there is no

reasonable possibility that the actions requested by the petitioner

would be taken at the conclusion of a rulemaking proceeding and that

the concerns alleged by COSVAM do not warrant the expenditure of agency

resources to conduct a rulemaking proceeding. Accordingly, NHTSA denies

COSVAM's petition.

Authority: 49 U.S.C. 30103, 30162; delegation of authority at 49

CFR 1.50 and 501.8.

Issued: February 5, 1999.

Stephen R. Kratzke,

Acting Associate Administrator for Safety Performance Standards.

[FR Doc. 99-3294 Filed 2-9-99; 8:45 am]

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