[Federal Register Volume 64, Number 174 (Thursday, September 9, 1999)]
[Notices]
[Pages 49049-49050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23428]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration
[Docket No. NHTSA-98-3355; Notice 4]


Red River Manufacturing, Inc.; Grant of Application for Renewal 
of Temporary Exemption From Federal Motor Vehicle Safety Standard No. 
224

    For the reasons explained below, we are granting the application by 
Red River Manufacturing, Inc., of West Fargo, North Dakota, for a 
renewal of NHTSA Temporary Exemption No. 98-3 from Motor Vehicle Safety 
Standard No. 224, Rear Impact Protection. Red River applied again 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 notice of receipt of the application on March 5, 1999, 
and afforded an opportunity for comment (64 FR 10737).
    We granted Red River a 1-year temporary exemption from Standard No. 
224 on April 1, 1998 (63 FR 15909). The exemption was to expire on 
April 1, 1999, but Red River filed a timely application for renewal, 
and, as provided by 49 CFR 555.8(e), the exemption will continue in 
effect until we make a decision on its application. The company has 
requested an extension of this exemption until April 1, 2002. The 
discussion that follows is based on information contained in Red 
River's application.
Why Red River Says That it Needs to Renew its Temporary Exemption
    On April 1, 1998, we granted Red River a temporary exemption of one 
year from Standard No. 224. See 63 FR 15909 for our decision.
    Among other kinds of trailers, Red River manufactures and sells two 
types of horizontal discharge trailers which discharge their contents 
into hoppers, rather than on the ground. This makes it impractical to 
comply with Standard No. 224 by using a fixed rear impact guard. One 
type of horizontal discharge trailer is used in the road construction 
industry to deliver asphalt and other road building materials to the 
construction site. The other type is used to haul feed, seed, and 
agricultural products such as sugar beets and potatoes, from the fields 
to hoppers for storage or processing. Both types are known by the name 
``Live Bottom.''
    Standard No. 224 requires, effective January 26, 1998, that all 
trailers with a GVWR of 4536 Kg or more, including Live Bottom 
trailers, be fitted with a rear impact guard that conforms to Standard 
No. 223, Rear impact guards. Red River, which manufactured 225 Live 
Bottom trailers of all kinds in the 12 months preceding the filing of 
its application on December 22, 1998, has asked for a renewal of its 
exemption until April 1, 2002, in order to continue its efforts to 
develop a rear impact guard that conforms to Standard No. 223 and can 
be installed in compliance with Standard No. 224, while retaining the 
functionality and price-competitiveness of its trailers.

Why Red River Says That Compliance Would Cause it Substantial 
Economic Hardship

    Live Bottoms accounted for almost half of Red River's production in 
1997. In the absence of an exemption, Red River believes that 
approximately 60 percent of its work force would have to be laid off. 
Its projected loss of sales is $8,000,000 to $9,000,000 per year (net 
sales have averaged $14,441,822 over its 1995, 1996, and 1997 fiscal 
years).
    We require hardship applicants to estimate the cost required to 
comply with a standard, as soon as possible, and at the end of a one, 
two, or three year exemption period. Red River estimates that even a 3-
year exemption will require a retail price increase that will result in 
a loss of 35 percent of Live Bottom sales. Further, ``more than 50 
percent of available engineering time would be required for compliance 
and related modifications in this time frame, resulting in a 
significant reduction in support for non-Live Bottom products, and a 5% 
decline in non-Live Bottom sales.''

Why Red River Says That it Has Tried to Comply With the Standard in 
Good Faith

    In its initial application for a temporary exemption, Red River 
explained that, in mid 1996, its design staff began exploring options 
for compliance with Standard No. 224. Through a business partner in 
Denmark, the company reviewed the European rear impact protection 
systems. Because these designs must be manually operated by ground 
personnel, Red River decided that they would not be acceptable to its 
American customers. Later in 1996, Red River decided to investigate 
powered retractable rear impact guards. The initial design could not 
meet the energy absorption requirements of Standard No. 223. The 
company then investigated the use of pneumatic-over-mechanical 
retractable rear impact guards, and developed a prototype design which 
it began testing in the field in May 1998. This testing is disclosing a 
number of problems as yet unresolved. In the meantime, Red River 
consulted three commercial suppliers of underride devices but none 
produces a guard that could be used on the Live Bottoms.
    Red River intends to continue its compliance efforts while an 
exemption is in effect, and believes that three years will enable it to 
conclude definitively whether it is feasible to design and manufacture 
a compliant rear guard that meets the requirements of its customers, 
and, if it is not feasible, to petition the agency for rulemaking to 
exclude Live Bottoms from Standard No. 224.
    Red River was able to conform its other trailers with Standard No. 
224.

Why Red River Says That Exempting it Would Be Consistent with the 
Public Interest and Objectives of Motor Vehicle Safety

    In its initial application, Red River argued that an exemption 
would be in the public interest and consistent with traffic safety 
objectives because the Live Bottom ``can be used safely where it would 
be hazardous or impractical to use end dump trailers, such as on uneven 
terrain or in places with low overhead clearances.'' These trailers are 
``valuable to the agricultural sector'' because of the advantages they 
offer in the handling of relatively fragile cargo. An exemption ``would 
have no adverse effect on the safety of the general public'' because 
the Live Bottom spends very little of its operating life on the highway 
and the likelihood of its being involved in a rear-end collision is 
minimal. In addition, the design of the Live Bottom is such that the 
rear tires act as a buffer and reduce the likelihood of impact with the 
trailer.
    Red River reiterates these arguments in its application for renewal 
of its temporary exemption. It adds that it knows of no rear end 
collisions involving horizontal discharge trailers that have resulted 
in injuries, nor any instances in which there has been an intrusion by 
a horizontal discharge trailer into the passenger compartment of a 
vehicle impacting the rear of such a trailer.

Comments Received From the Public on the Application

    We received four comments on Red River's application for renewal of 
its temporary exemption. Two commenters

[[Page 49050]]

opposed granting the renewal, and two commenters supported it.
    Timpte Trailer Co. of David City, Nebraska, identified itself as a 
manufacturer of bulk commodity trailers ``with the same limited 
engineering resources'' as Red River, and opposed granting Red River's 
request. Timpte related that it was able to design a ``live bottom'' 
trailer with a telescoping rear underride protection system ``which 
complied with FMVSS 224 on its original effective date.'' However, this 
added to the trailer's weight and cost, and Timpte says that the 
exemptions granted Red River and two other ``live bottom'' 
manufacturers placed Timpte at an unfair competitive advantage. As a 
consequence, it had to suspend production of its ``live bottom'' 
trailer and release approximately 20 percent of its workforce. Timpte 
argues that Red River has had adequate time to comply with the 
underride requirement, and that Timpte's system proves that this type 
of trailer can be equipped with a workable rear underride protection 
system that meets Federal requirements. It ``strongly objects'' to 
extending Red River's exemption.
    E.D. Entyre & Co. of Oregon, Illinois, filed a similar comment in 
opposition. It designed a ``live bottom'' trailer with a retractable 
rear underride guard which it introduced in August 1998. The total 
engineering and test time spent on this retractable design ``was 
approximately two man months and the mechanism has a manufacturing cost 
of approximately $500.'' The company believes that the extension should 
be denied ``since a solution has been shown to be technically 
feasible,'' and complying companies have been placed at a competitive 
disadvantage.
    Red River's application was supported by Dan Hill & Associates, 
Inc., which has been producing ``live bottom'' trailers pursuant to a 
temporary exemption we gave it in 1998, and Robert J. Crail, 
Transportation Engineering Consultant. Dan Hill states that it and Red 
River have dominated the horizontal flow discharge trailer market for 
the last few decades. In view of this experience, and understanding 
that Entyre has produced less than 20 complying ``live bottom'' 
trailers, Dan Hill comments that ``Entyre's lack of experience in the 
horizontal discharge market [may have] erroneously lead Entyre to 
believe that it has successfully complied with a very complex issue.'' 
In any event, Dan Hill further comments that Entyre is a far larger 
company than it and Red River, with ``considerably more resources to 
allocate to research and development.'' With respect to Timpte, Dan 
Hill comments that Timpte does not manufacture a horizontal discharge 
trailer for the road construction industry and thus does not have the 
problems associated with the asphalt paver/trailer interface.
    Mr. Crail reiterates his previous support of Red River. He has 
examined one of its trailers and is convinced ``that it will take at 
least an additional three years for Red River to determine whether it 
is feasible to manufacture an impact guard for these trailers.'' He 
believes that the impact of an exemption upon safety will be minimal, 
given the small number of trailers that would be covered by an 
exemption and the fact that ``the Live Bottom trailers are used mostly 
off roads.''

Our Findings and Decision

    In granting a temporary exemption, we must find that a manufacturer 
has made a good faith effort to comply with the standard from which it 
has requested exemption. While the fact that another manufacturer may 
have achieved compliance indicates that a particular technological 
problem is not insoluble, it does not mean that a petitioner has failed 
to make a good faith compliance effort. It does indicate, however, 
that, during the period of any renewed exemption, a petitioner should 
carefully examine these solutions for applicability to its own product. 
The fact that Timpte and Entyre have commented that their ``live 
bottom'' trailers comply with Standard No. 224 should alert Red River 
that an alternative may exist to the prototype design that it began 
testing in May 1998 and which has disclosed a number of problems. We 
note that Red River's principal competitor, Dan Hill & Associates, 
Inc., believes that it will have a complying ``swing-in'' guard by 
February 1, 2001. For these reasons, we do not believe that Red River 
has sustained its request for an exemption for a period as long as 
April 1, 2002, and we are providing one commensurate with the extension 
granted Dan Hill, until February 1, 2001.
    In the absence of extending the exemption, it appears that Red 
River could not produce trailers that have accounted for over 50 
percent of its net sales, with the accompanying dislocation of its work 
force that this would entail. Given the apparent minimal risk to safety 
presented by a trailer that spends comparatively little of its life 
being operated on the public roads (construction trailers) and in which 
the rear tires can act as a buffer in the absence of an impact guard 
(agricultural trailer), and the public interest in maintaining full 
employment, Red River has met its burdens under the statutory 
procedures.
    Accordingly, for the reasons set forth above, we hereby find that 
compliance with Standard No. 224 would cause substantial economic 
hardship to a manufacturer that has tried in good faith to comply with 
Standard No. 224, and that an exemption would be in the public interest 
and consistent with the objectives of traffic safety. NHTSA Temporary 
Exemption No. 98-3 from Federal Motor Vehicle Safety Standard No. 224, 
Rear Impact Protection, applicable to horizontal discharge trailers, is 
hereby extended to expire on February 1, 2001. That date is slightly 
more than five years after Standard No. 224 was issued, and NHTSA does 
not anticipate providing further extensions of exemptions from 
compliance with Standard No. 224.

    Authority: 49 U.S.C. 30113; delegations of authority at 49 CFR 
1.50 and 501.4.

    Issued on: September 1, 1999.
Ricardo Martinez,
Administrator.
[FR Doc. 99-23428 Filed 9-8-99; 8:45 am]
BILLING CODE 4910-59-P