[Federal Register Volume 64, Number 105 (Wednesday, June 2, 1999)]
[Notices]
[Pages 29732-29733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13894]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration
[Docket No. NHTSA 99-5287; Notice 2]


Dailey Body Company; Grant of Application for Temporary Exemption 
From Federal Motor Vehicle Safety Standard No. 121

    We have decided to grant the application by Dailey Body Company of 
Oakland, California, to exempt five trailers from Motor Vehicle Safety 
Standard No. 121 Air Brake Systems. The statutory basis for our action 
is that we have found that ``compliance would cause substantial 
economic hardship to a manufacturer that has tried in good faith to 
comply with the standard.'' 49 U.S.C. 30113.
    We published notice of receipt of the application on March 22, 
1999, and afforded an opportunity to comment (64 FR 13843). However, no 
comments were received.
    The discussion below is based upon the information that Dailey 
provided in its application.

[[Page 29733]]

Why Dailey Needs an Exemption

    Dailey requested an exemption for five ``special reel hauling'' 
trailers that it was unable to complete before March 1, 1998, because 
of changes requested by its customer, Pacific Gas & Electric Co., 
(PG&E) during construction of the trailers. On March 1, 1998, an 
amendment to Federal Motor Vehicle Safety Standard No. 121 Air Brake 
Systems became effective, requiring these trailers to be equipped with 
an anti-lock brake system. According to the company, there is no after 
market kit available to convert the air-over-hydraulic brake system to 
meet the new requirements of S5.1.6.

Why Compliance Would Cause Dailey Substantial Economic Hardship

    Since there is no aftermarket kit available to convert the trailers 
to a conforming brake system, Dailey would be unable to sell them 
absent an exemption. It has $250,000 of its operating capital tied up 
in the trailers, and would have to absorb the loss. This figure is 
almost equal to its combined net income for the years 1996 and 1997, 
$252,519.

How Dailey Tried in Good Faith To Comply With Standard No. 121

    Dailey's total trailer production in the 12-month period preceding 
the filing of its application was 43. It was also the final-stage 
manufacturer and certifier of 938 ``chassis with bodies.'' Other than 
the five trailers for which it requests exemption, its trailers 
manufactured since March 1, 1998, comply with Standard No. 121.

Why an Exemption for Dailey Would Be in the Public Interest and 
Consistent With the Objectives of Motor Vehicle Safety

    Dailey believes that it would be in the public interest ``to keep 
from imposing a hardship, that could adversely affect employment, on a 
company that has been successfully building truck body equipment for 
over 50 years.'' Because only five trailers will be exempted, the risk 
to the public will be small. The trailers were manufactured to conform 
with regulations that existed at the time production was scheduled.

Our Finding That Compliance Would Cause Substantial Economic 
Hardship to a Manufacturer That Has Tried in Good Faith To Comply 
With Standard No. 121

    If we denied Dailey's application, the company would be unable to 
sell the five trailers. We assume that some of the $250,000 of its 
operating capital tied up in the vehicles would not be totally lost as 
Dailey indicates, but, in large part, could be reclaimed over time by 
sales of components of the trailers as replacement parts. Nevertheless, 
it is evident that the company's net income has been marginal in recent 
years, and that recoupment of $250,000 plus profit from the sales of 
the five trailers would make an immediate and material improvement in 
its income statements. These trailers represent over 10 percent of its 
annual trailer production.
    With the exception of these trailers, Dailey's vehicles are 
complying with Standard No. 121. These trailers also would have 
complied had not the customer ordered changes during their production. 
Dailey has sought, but not found, a means of bringing them into 
conformity.

Our Finding That an Exemption Would Be in the Public Interest and 
Consistent With the Objectives of Motor Vehicle Safety

    Dailey argued that an exemption would be in the public interest as 
avoiding an adverse effect upon employment. We agree that full 
employment is in the public interest, and also conclude that the fact 
that the vehicles are intended for work-performing use by a public 
utility is also a factor in favor of an exemption. The presence of five 
reel-hauling trailers on the public roads will not have a discernable 
effect on motor vehicle safety. Further, the trailers will be certified 
as meeting all other applicable Federal motor vehicle safety standards.
    For the reasons discussed in the two sections above, it is hereby 
found that compliance would cause substantial economic hardship to a 
manufacturer that has tried in good faith to comply with the standard 
from which it has requested exemption. It is further found that a 
temporary exemption would be in the public interest and consistent with 
the objectives of motor vehicle safety.
    Accordingly, Dailey Body Company is hereby granted NHTSA Temporary 
Exemption No. 99-6, from S5.1.6 of 49 CFR 571.121 Air Brake Systems, to 
cover the manufacture for sale, sale, offer for sale, introduction into 
interstate commerce, and delivery for introduction in interstate 
commerce, of five reel-hauling trailers manufactured for Pacific Gas & 
Electric Co., said exemption to expire when the last of the acts stated 
above occurs with respect to the last trailer exempted by this notice, 
or August 1, 1999, whichever first occurs.

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

    Issued on: May 26, 1999.
Ricardo Martinez,
Administrator.
[FR Doc. 99-13894 Filed 6-1-99; 8:45 am]
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