[Federal Register Volume 64, Number 86 (Wednesday, May 5, 1999)]
[Notices]
[Pages 24214-24215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11302]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration
[Docket No. NHTSA-99-5200; Notice 2]


Capacity of Texas, Inc.; Grant of Application for Temporary 
Exemption From Federal Motor Vehicle Safety Standard No. 105

    For the reasons expressed in this notice, we are granting the 
application by Capacity of Texas, Inc., of Longview, Texas 
(``Capacity''), for a temporary exemption from the anti-lock 
requirements of Motor Vehicle Safety Standard No. 105 Hydraulic and 
Electric Brake Systems that became effective March 1, 1999. Capacity 
applied for an exemption on the basis that ``compliance would cause 
substantial economic hardship to a manufacturer that has tried in good 
faith to comply with the standard.'' 49 CFR 555.6(a).
    We published a notice of receipt of the application on March 10, 
1999, and afforded an opportunity for comment (64 FR 11979). We 
received one comment on the application, from the National Truck 
Equipment Association (NTEA), which supported it.
    The discussion that follows recapitulates Capacity's arguments and 
is based on information contained in the company's application.

Why Capacity Needs a Temporary Exemption

    S5.5 of Standard No. 105 requires any motor vehicle with a gross 
vehicle weight rating (GVWR) greater than 10,000 pounds, except for a 
vehicle that has a speed attainable in 2 miles of not more than 33 mph, 
to be equipped with an antilock brake system if it is manufactured on 
and after March 1, 1999. Capacity manufactures bus chassis that it 
provides to World Trans, Inc., of Hutchinson, Kansas, for completion. 
However, with respect to the buses that will be covered by the 
exemption, if granted, Capacity has informed us that, pursuant to the 
option granted the manufacturer of an incomplete vehicle by 49 CFR 
568.7(a), it is assuming the responsibilities of the final-stage 
manufacturer (World Trans). As such, Capacity will certify that the 
completed buses comply with all applicable Federal motor vehicle safety 
standards, and provide notification and remedy if required.

Why Compliance Would Cause Capacity Substantial Economic Hardship

    Capacity produces a limited quantity (100 or less yearly) bus 
chassis for World Trans, and, as discussed more fully below, has been 
unable to find a vendor who is willing to provide antilock controllers. 
Therefore, if Capacity is not granted an exemption, it will have to 
withdraw the chassis from production, and World Trans's bus production 
will be diminished. This will cause both Capacity and World Trans to 
lose income in each of the three years for which an exemption has been 
requested. Capacity's projected net income for its fiscal year ending 
October 31, 1998, was $2,631,018. Its projected net income for the year 
ending October 31, 1999, is $2,286,617 if an exemption is granted, and 
$1,945,087 if it is not. Thus, net income would be reduced by $341,530 
in the absence of an exemption covering production from March 1-October 
31, 1999.

How Capacity Has Tried To Comply With the Standard in Good Faith

    Capacity contacted four different brake component suppliers. Its 
search for an anti-lock controller began with Lucas/Varity (formerly 
Kelsey-Hayes) because of its longtime association with Ford Motor 
Company and the fact that the bus chassis uses a common Dana drive axle 
with many Ford light duty trucks. But the company was told that no 
development could be approached until Capacity could guarantee a 
purchase order in the range of 10,000 controllers.
    Capacity next approached Eaton-Bosch, and found that it is 
currently producing hydraulic anti-lock brake systems for vehicles up 
to 12,000 lbs GVWR. Although the company is developing a system for 
vehicles up to 20,000 lbs GVWR, the system won't be finalized until 
2001.
    The third vendor that Capacity approached was ITT Automotive-Teves,

[[Page 24215]]

which expects to have a system ready for installation on vehicles up to 
20,000 lbs GVWR by the fourth quarter of 1999. The company told 
Capacity that it will take a minimum of one winter test season to 
assure that the controller can be adapted to a vehicle. Thus, Capacity 
does not foresee that it can use this system and comply before the Fall 
of 2000.
    Finally, Capacity consulted Rockwell/Meritor-Wabco System. This 
company has a controller that ``can be fine tuned on a vehicle to meet 
different dynamic characteristics.'' However, ``even if this system 
proves out, it appears that a year's testing will be required to adapt 
it to our bus chassis.''

Why Exempting Capacity Would Be Consistent With the Public Interest 
and Objectives of Motor Vehicle Safety

    Capacity argued that an exemption would be in the public interest 
and consistent with traffic safety objectives because

many of these vehicles end up serving small cities and rural transit 
districts. These customers have limited budgets so the availability 
of an economical low floor bus allows them to prove fee service in 
areas where large buses are too costly to operate. The low floor 
feature of this vehicle allows the finished bus to readily serve the 
handicapped community.

    In addition, ``these buses operate in shuttle and light transit 
operations where high speed stops aren't commonly experienced.'' 
Capacity believes that rushing an anti-lock system into production 
might present a risk to safety.

Our Findings and Decision

    At the moment, Capacity's net income is larger than many low-volume 
manufacturers who apply for temporary exemptions. However, in the 
absence of an exemption, Capacity will not be able to generate revenues 
by providing ``100 or less yearly'' bus chassis for its customer, World 
Trans until such time as it is able to produce a conforming bus. This 
raises the possibility that World Trans would look elsewhere for bus 
chassis and that Capacity would permanently lose World Trans as a 
customer. In the absence of an exemption, it is logical to assume that 
Capacity would attempt to reduce its expenses by a reduction in its 
work force. As discussed earlier, the brake component suppliers 
contacted by Capacity have been unable to help the company comply by 
March 1, 1999, the effective date of the anti-lock requirement. Lucas/
Varity does not appear interested in producing an anti-lock controller 
in small quantities. Eaton-Bosch does not anticipate having a suitable 
controller until 2001. ITT Automotive Teves does not appear able to 
provide a reliable controller before late in 2000. Rockwell/Meritor-
Wabco System may have a suitable controller, but if so, ``a year's 
testing will be required to adapt it to [the Capacity] bus chassis.'' 
It appears that two of the three suppliers may have a usable anti-lock 
controller that could be installed were a two-year exemption provided.
    A two-year exemption would also be consistent with our views that 
exemptions must be sparingly given to buses because they are motor 
vehicles which may carry hundreds of passengers daily. Some of 
Capacity's buses, it appears, will operate in environments where high 
speed stops are not commonly experienced. Although we do not know how 
many passengers these buses are designed to carry, they appear to be 
smaller than big-city transit buses even though their GVWR is greater 
than 10,000 pounds.
    It is in the public interest to facilitate the availability of 
relatively inexpensive buses whose size and price are appropriate for 
the small city and rural district transit markets in which they are 
sold and operated. In its comment in support of the application, NTEA 
stated that denial of the exemption request would also hurt the 
communities that need ``these specialized vehicles.'' NTEA also 
commented that ``the features of this bus also allow it to serve the 
handicapped community.''
    For these reasons, we find that compliance with S5.5 of Motor 
Vehicle Safety Standard No. 105 would cause substantial economic 
hardship to a manufacturer that has tried in good faith to comply with 
the standard. We further find that a temporary exemption would be 
consistent with the public interest and the objectives of motor vehicle 
safety.
    Accordingly, Capacity of Texas, Inc., is hereby granted NHTSA 
Temporary Exemption No. 99-5 from S5.5 of 49 CFR 571.105 Standard No. 
105 Hydraulic and Electric Brake Systems, expiring April 1, 2001.

    Authority: 49 U.S.C. 30113; delegation of authority at 49 CFR 
1.50.

    Issued on: April 30, 1999.
Ricardo Martinez,
Administrator.
[FR Doc. 99-11302 Filed 5-4-99; 8:45 am]
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