[Federal Register Volume 63, Number 235 (Tuesday, December 8, 1998)]
[Notices]
[Pages 67720-67722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32510]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration
[Docket No. NHTSA-98-4208; Notice 2]


MHT Luxury Alloys, Denial of Application for Decision of 
Inconsequential Noncompliance

    MHT Luxury Alloys (MHT) of Torrance, California has determined that 
some of the rims it manufactured and marketed fail to comply with 49 
CFR 571.120, Federal Motor Vehicle Safety Standard (FMVSS) No. 120, 
``Tire Selection and Rims for Vehicles Other Than Passenger Cars,'' and 
has filed an appropriate report pursuant to 49 CFR Part 573, ``Defect 
and Noncompliance Reports.'' MHT has also applied to be exempted from 
the notification and remedy requirements of 49 U.S.C. Chapter 301--
``Motor Vehicle Safety'' on the basis that the noncompliance is 
inconsequential to motor vehicle safety.
    Notice of receipt of the application was published, with a 30-day 
comment period, on August 5, 1998, in the Federal Register (63 FR 
41890). NHTSA received four comments on this application during the 30-
day comment period. All four commenters recommended the denial of the 
application.
    Paragraph S5.2 of FMVSS No. 120 states that each rim, or at the 
option of the manufacturer in the case of a single-piece wheel, the 
wheel disc shall be marked with the information listed in paragraphs 
(a) through (e), in lettering not less than 3 millimeters high, 
impressed to a depth or, at the option of the manufacturer, embossed to 
a height of not less than 0.125 millimeter. These five paragraphs 
labeled (a) through (e) require the following labeling:
    (a) A designation which indicates the source of the rim's published 
nominal dimensions;
    (b) The rim size designation;
    (c) The symbol DOT, constituting a certification by the 
manufacturer of the rim that the rim complies with all applicable motor 
vehicle safety standards;
    (d) A designation that identifies the manufacturer of the rim by 
name, trademark, or symbol; and
    (e) The month, day, and year or the month and year of manufacture.
    From January 1, 1996 through November 13, 1997, MHT produced and 
sold approximately 13,000 rims which are not labeled with four of the 
five items required by the standard. However, MHT did permanently place 
on the center of the rim on the weather side a mark of ``MHT,'' 
``NICHE,'' ``NEEPER,'' or other registered trade name of MHT Luxury 
Alloys, which it believes is a sufficient designation of the rim's 
manufacturer.
    MHT supported its application for inconsequential noncompliance 
with the following statements:
    1. Although the symbol ``DOT'' [and other labeling requirements] 
did not appear on the described rims, each rim did comply with all 
applicable motor vehicle safety standards.
    2. MHT has received no complaints from consumers that (i) the rims 
did not comply with all applicable motor vehicle safety standards, or 
(ii) the rims did not contain the required labeling.
    3. The subject rims were initially designed and manufactured for 
application on passenger vehicles. MHT's management was not aware of 
the labeling requirements and believed that because the rims were 
originally designed and manufactured for passenger vehicles, they were 
exempt from the labeling requirements.
    4. The names ``MHT,'' ``NICHE,'' ``NEEPER,'' and other registered 
trade names of MHT are extremely well known in the industry and to the 
consumers of motor vehicle rims. MHT believes that a consumer could 
inquire at any store, distributor, warehouse, or manufacturer within 
the United States as (i) to the identity and general location of MHT, 
(ii) be advised that MHT is the manufacturer of rims that bear its name 
and its trademarks, and (iii) that MHT is located in Los Angeles 
County, California. MHT has consistently responded promptly and fully 
to any consumer inquires regarding its products.
    5. Upon receipt of a National Highway Traffic Safety Administration 
(NHTSA) letter, dated October 6, 1997, MHT promptly ordered a marking 
machine to imprint each new and ``in warehouse'' rim with the required 
information. Since November 13, 1997, all rims distributed by MHT have 
been marked in compliance with S5.2.
    NHTSA received comments from four individuals. One of the comments 
was received by NHTSA's Office of Safety Assurance, during the comment 
period, and was deemed relevant to the inconsequentiality decision and 
was placed in the docket.
    The first commenter, Jesse Hsiao, urged the agency not to grant the 
application, because the commenter believes: (1) Without labeling, a 
consumer cannot determine whether the rims are to be used on a 
passenger car or a truck; (2) the MHT rims are specifically designed 
for a truck, not a passenger car; and (3) a cap marked with MHT is not 
sufficient, because the cap can easily pop off the wheel, or the cap 
may not even be placed on the wheel at the time of delivery to the 
customer.
    The second commenter, a tire dealer located in Southern California, 
stated serious concerns about the future liability problems with MHT 
wheels and urged the agency to require MHT to recall the non-complying 
truck wheels. This commenter made the following statements: (1) MHT 
should be forced to provide evidence that its truck wheels comply with 
all safety standards. Truck and Sport Utility Vehicle (SUV) wheels 
require a much higher maximum load capacity than passenger vehicle 
wheels; (2) MHT's statement that it did not believe it had to mark the 
wheels, because the rims were originally designed for passenger cars, 
is dishonest and does not make sense; (3) MHT's statement that subject 
truck rims were initially designed for passenger vehicles is incorrect. 
Wheels for passenger vehicles have different offsets, different center 
bore, different center pad, different bolt patterns, and different load 
capacities, than the wheels designed for trucks and SUVs; (4) MHT's 
statement that their management was not aware of the labeling 
requirements is not true. MHT wheels are manufactured in Progressive 
Custom Wheels' foundry, where all wheels, except MHT's, are stamped 
with the appropriate labeling; (5) Many MHT truck wheels are sold 
without the MHT, Niche, or Neeper trade marks. MHT sells some wheels 
directly to new car dealers. In many cases, these wheel caps bear the 
car manufacturer's name (i.e. Ford, Toyota, etc.). Without the marking 
on the wheel, the consumers will be confused about the origin of their 
wheels. It will be very difficult, if not impossible, to trace the 
wheels to MHT; and (6) As of September 1998, MHT continued to 
distribute unmarked wheels.
    The third commenter, Richard E. Rice, provided general comments 
regarding MHT's application. The commenter made the following 
statements: (1) Since

[[Page 67721]]

the MHT wheels were manufactured initially for passenger vehicles--what 
testing was done to determine whether the wheels could be used for 
truck weight capacities?; (2) Since the MHT truck wheels have no 
markings, the tire retail stores installing the wheels would not know 
whether the wheels met the weight capacity for a certain application. 
All the wheels that we sell, except MHT wheels, have DOT markings that 
show the maximum weight capacity; (3) a cap marked with MHT is not 
sufficient, because the cap can easily pop off the wheel, or the cap 
may contain only the car manufacturer's name; (4) the MHT management 
has been in the wheel manufacturing business for decades. The owner and 
MHT management ran the American Racing Wheel Company, the largest wheel 
manufacturing company in the United States, with contracts to make 
original equipment wheels for Ford and General Motors. It is 
inconceivable that they did not know the laws pertaining to marking 
their wheels. Also it is unbelievable that they would try to make 
anyone believe they had simply redesigned car wheels, so that they 
would be exempt from governing laws. Truck wheels have different 
offsets and bolt patterns, so they require different molds; and (5) the 
commenter has seen MHT wheels that cracked and failed. Many MHT 
customers don't know from where their wheels came or how to contact the 
responsible party.
    The fourth commenter, who submitted information to NHTSA's Office 
of Safety Assurance, stated that: (1) MHT claims that it permanently 
placed at the center of all of its non-complying wheels a logo bearing 
one of the MHT's trade names. However, a variety of MHT's non-complying 
wheels have been and continue to be sold with logos bearing the trade 
name of entities other than MHT. At times, MHT non-complying truck 
wheels have been sold by MHT directly to car dealers bearing the logos 
of Toyota, Lexus, Infiniti, and other car manufacturers. For example, 
MHT's Neeper N-7, Pyro, and Syncro truck wheels, and MHT's Niche Prima, 
Gefell, and Runner truck wheels have been sold bearing Toyota logos. 
The latest example is the Niche Bahn M-805 truck wheel for the Lexus 
LX470, which has been sold at times bearing a modified Lexus logo. The 
commenter provided a picture indicating this issue; (2) MHT claims that 
since November 13, 1997, all rims distributed by MHT have been marked 
in compliance with 49 CFR 571.120. On May 22, 1998, MHT wrote to DOT 
making this claim, and further claimed to have notified all of its 
distributors of the non-compliance and promised to correct all non-
complying wheels stocked by its distributors by marking them as 
required. However, MHT did not stop selling non-complying wheels or 
even manufacturing brand new non-complying wheels when it claimed it 
did. Also, the MHT distributors did not stop. For example, in late 
March 1998, MHT manufactured a brand new wheel, the Niche Bahn M-805 
for the Lexus RX470 vehicle, and in April 1998 shipped a number of such 
non-complying wheels from its warehouse to Lexus car dealers. Even at 
the beginning of August 1998, MHT distributors were selling wheels 
without any markings pursuant to 49 CFR 571.120. The commenter provided 
pictures indicating this issue; (3) MHT claims in its application that 
it has received no complaints that its rims did not contain the 
required labeling. However, MHT has received specific complaints about 
the problems raised by the non-compliance. The commenter provided a 
letter addressed to Mr. Palmer of MHT, dated September 30, 1996, in 
which it is noted that MHT wheels are lacking the appropriate and 
required labeling; (4) MHT claims in its application that its truck 
rims were initially designed and manufactured for passenger vehicles, 
and that subsequently ``bolt patterns were modified so that the same 
rims that had been designed for passenger cars could be mounted on 
light trucks and sport utility vehicles* * *.'' However, MHT's truck 
wheels are specifically designed, manufactured, and marketed for trucks 
or sport utility vehicles. The only similarity between some of MHT's 
truck wheels and passenger wheels might be the ornamental design of the 
wheel face. Otherwise, at least the size, offset, center bore and 
mounting pad, and load capacity of the wheels, in addition to the bolt 
pattern, are significantly different between the two categories of 
wheels. The commenter provided pictures showing the N146 Syncro 
passenger car wheel and the N146 Syncro truck wheel in MHT's Concept 
Neeper catalog. The commenter states that it is clear that the six-lug 
truck wheel requires a larger center bore and mounting pad and was 
manufactured as a different rim and in a different mold than the 
corresponding passenger car wheel. If MHT indeed merely changes the 
bolt pattern of its passenger vehicle wheels and then sells them as 
truck wheels, then serious safety concerns arise; (5) Many of MHT's 
wheel styles are manufactured and marketed solely for trucks and sport 
utility vehicles. For example, MHT's Concept Neeper Style N141 Pyro and 
Niche Style M402 Treck wheels were designed and sold solely for trucks 
and sport utility vehicles. The commenter provided MHT Concept Neeper 
and Niche catalogs as examples; (6) MHT claims that it will be 
extremely difficult if not impossible to contact the great majority of 
consumers who have purchased or possess non-complying wheels. Many, and 
probably most, purchasers pay with cash and leave no record with the 
retail seller as to the consumer's identity. However, many purchasers 
acquire MHT wheels from car dealers who keep consummate and detailed 
records of all their transactions. A recall of a large portion of the 
wheels manufactured, at least those sold by car dealers, should not be 
difficult to implement; and (7) MHT's non-compliance results in an 
inability to trace rims back to MHT. The consuming public might be 
confused and deceived, and MHT's retailers and distributors, through no 
fault of their own, might be in the path of liability. The commenter 
urges DOT to investigate the matter further.
    The purpose for the labeling requirements in FMVSS No. 120 is to 
provide the vehicle user with information for the safe operation of the 
vehicle by ensuring that the vehicle is equipped with rims of 
appropriate size and type designation. Without proper labeling, an 
individual cannot determine the rim's size and type designation. 
Therefore, the vehicle user cannot readily determine the proper size 
tire for the rim and the vehicle. Without this required information 
displayed on the rim, a tire too large for the rim could be mounted, 
resulting in a failure. If an oversize tire is not properly seated on 
the rim, the tire could separate from the rim on the vehicle while 
traveling down the highway. This presents a clear and distinct safety 
hazard. Also, without the knowledge of the load carrying capabilities 
of the wheel, the possibility of overloading exists. Overloading of a 
rim presents the possibility of a structural failure as the vehicle is 
traveling on the road. In consideration of the foregoing, NHTSA has 
decided that the applicant has not met its burden of persuasion that 
the noncompliance it describes is inconsequential to safety. 
Accordingly, its application is hereby denied.

(49 U.S.C. 30118, 30120, delegations of authority at 49 CFR 1.50 and 
501.8).


[[Page 67722]]


    Issued: December 1, 1998.
L. Robert Shelton,
Associate Administrator for Safety Performance Standards.
[FR Doc. 98-32510 Filed 12-7-98; 8:45 am]
BILLING CODE 4910-59-P