Federal Register, Volume 70 Issue 9 (Thursday, January 13, 2005)

[Federal Register Volume 70, Number 9 (Thursday, January 13, 2005)]
[Notices]
[Pages 2462-2464]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-656]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2005-20053, Notice 1]

Morgan Motor Company Limited Receipt of Application for a
Temporary Exemption From Part 581 Bumper Standard

In accordance with the procedures of 49 CFR Part 555, Morgan Motor
Company Limited (``Morgan'') has applied for a Temporary Exemption from
Part 581 Bumper Standard. The basis of the application is that
compliance would cause substantial economic hardship to a manufacturer
that has tried in good faith to comply with the standard.\1\
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\1\ To view the petition, please got to: http://dms.dot.gov/search/searchFormSimple.cfm (Docket No. NHTSA-2005-20053).
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We are publishing this notice of receipt of the application in
accordance with the requirements of 49 U.S.C. 30113(b)(2), and have
made no judgment on the merits of the application.

I. Background

Founded in 1910, Morgan is a small privately owned vehicle
manufacturer producing approximately 400 to 500 vehicles per year. The
vehicles manufactured by Morgan are uniquely styled open top roadsters.
In recent years, the only model exported into the United States was the
Morgan Plus 8.\2\
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\2\ See http://www.Autosite.com/buyersguide/2004-morgan-plus-8.asp.
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Petitioner states that in preparing to replace the Morgan Plus 8
with a new model in the U.S., Morgan sought to use a V6 engine and a
manual transmission supplied by Ford Motor Company (Ford). However, it
became apparent that Ford would be unable to supply a suitable engine
coupled with a manual transmission due to the change in the production
plans. The planned Morgan replacement vehicle for the U.S. market could
not accommodate an automatic transmission. Because no other
alternatives were available, Morgan was unable to proceed with
designing a replacement vehicle for the U.S. market. Thus, petitioner
stopped selling vehicles in the United States in January of 2004.
After an unsuccessful attempt to manufacture a new vehicle that
would replace the Morgan Plus 8, Morgan turned its attention to an
existing vehicle designed specifically for the European market, the
Morgan Aero 8

[[Page 2463]]

(Aero 8).\3\ The petition states, that after prolonged efforts to
develop an air bag system and to make other changes to the vehicle, it
was able to bring the Aero 8 into compliance with all the Federal motor
vehicle safety standards. However, because Aero 8 was not originally
intended for the U.S. market and because the petitioner was working on
a different vehicle intended for the U.S. market, this latest effort
required significant financial expenditures in a short period of time.
Petitioner states that as a consequence, it has not been able to
develop bumpers that comply with the requirements of Part 581, Bumper
standard.
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\3\ A description of the Aero 8 vehicle is attached to the
petition and can be viewed online at http://dms.dot.gov/search/searchFormSimple.cfm (Docket No. NHTSA-2005-20053).
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For additional information on the company, please go to http://www.morgan-motor.co.uk/.

II. Why Morgan Needs a Temporary Exemption

Petitioner indicates that it has experienced substantial economic
hardship, especially in light of decreasing sales and substantial costs
incurred in bringing Aero 8 into compliance with FMVSSs. Specifically,
Morgan indicates it spent a total of
[]8,000,000 on developing Aero 8.
Petitioner's financial submission shows a net loss of
[]1,964,872 ([ap] $3,668,648) for
the fiscal year 2003; a net gain of [ap] 68,082 ([ap] $127,126) for the
fiscal year 2002; and a net gain of
[]148,425 ([ap]$277,165) for the
fiscal year 2001. This represents a cumulative net loss for a period of
3 years of []1,748,365
($3,264,887).\4\
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\4\ All dollar values are based on an exchange rate of [pound]1
= $1.87 as of 11/23/2004.
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According to the petitioner, the cost of making the Aero 8
compliant with the bumper standard is beyond the company's current
capabilities. Petitioner contends that developing and building a
compliant bumper cannot be done without redesigning the entire body
structure of the Aero 8. Morgan estimates the cost of developing a Part
581-compliant bumper to be approximately [pound]3,000,000 and could
involve significant structural modifications to the vehicle's chassis.
Morgan requests a three-year exemption in order to develop
compliant bumpers. Petitioner anticipates the funding necessary for
these compliance efforts will come from immediate sales of Aero 8 in
the United States.

III. Why Compliance Would Cause Substantial Economic Hardship and How
Morgan Has Tried in Good Faith To Comply With the Bumper Standard

Petitioner contends that it cannot return to profitability unless
it receives a temporary exemption from the bumper standard for the Aero
8. Specifically, if the exemption is granted, Morgan anticipates a net
profit of [pound]596,923 for the first year of Aero 8 being sold in the
U.S. Morgan also projects that an exemption would have a similar impact
in the next year. If the exemption is denied, Morgan will not be able
to sell Aero 8 in the U.S. Resulting loss in sales revenue will result
in a projected net loss of [pound]2,242,527. Morgan indicates that a
temporary exemption would provide U.S. Morgan dealers with a source of
revenue. Without Aero 8 being available in the U.S., some dealers will
find it difficult to remain in business and support existing customers.
The petitioner will also be forced to cut back on existing customer
support in the U.S.
According to its petition, Morgan examined a number of bumper
solutions in order to bring the Aero 8 into compliance with Part 581.
First, Morgan considered mounting bumpers from another Morgan vehicle
onto Aero 8. However, because of Aero 8's unique shape, there were no
structures that would accommodate suitable bumper mountings without
interference with headlamps. Second, Morgan considered installing
rubber bumpers. However, they too caused interference with lighting
equipment. Finally, Morgan considered foam-based bumpers. This proved
to be the only solution that did not result in interference with
lighting equipment. However, it required a change to front and rear
aluminum body panels and chassis at a cost of approximately
[pound]3,000,000.
As previously stated, Morgan plans to introduce a fully compliant
Aero 8 in 2007.

IV. Why an Exemption Would Be in the Public Interest

Petitioner put forth several arguments in favor of a finding that
the requested exemption is consistent with the public interest.
Specifically:
1. Petitioner notes that Aero 8 complies with all Federal motor
vehicle safety standards and therefore, the exemption would not
increase the safety risks on U.S. highways.
2. Although the Aero 8 bumpers do not comply with Part 581, the
cost of bumper repairs is comparable to similarly priced vehicles.
3. Petitioner argues that denial of the petition would limit
consumer choices by permanently eliminating Morgan from the
marketplace. As previously stated, Morgan manufacturers unique
automobiles for which there is no direct competition or a substitute.
4. Morgan remarks that due to the nature of the Aero 8, it will, in
all likelihood, be utilized infrequently and each car would not travel
in excess of 3,000-4,000 miles annually.
5. Morgan does not anticipate selling more than a 100 vehicles
annually, and therefore, the impact of the exemption is expected to be
minimal.

V. How You May Comment on Morgan Application

We invite you to submit comments on the application described
above. You may submit comments [identified by DOT Docket Number NHTSA-
2005-20053] by any of the following methods:
Web Site: http://dms.dot.gov. Follow the instructions for
submitting comments on the DOT electronic docket site by clicking on
``Help and Information'' or ``Help/Info.''
Fax: 1-202-493-2251.
Mail: Docket Management Facility, U.S. Department of
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401,
Washington, DC 20590.
Hand Delivery: Room PL-401 on the plaza level of the
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9
a.m. and 5 p.m., Monday through Friday, except Federal Holidays.
Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
Instructions: All submissions must include the agency name and
docket number or Regulatory Identification Number (RIN) for this
rulemaking. Note that all comments received will be posted without
change to http://dms.dot.gov, including any personal information
provided.
Docket: For access to the docket in order to read background
documents or comments received, go to http://dms.dot.gov at any time or
to Room PL-401 on the plaza level of the Nassif Building, 400 Seventh
Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through
Friday, except Federal Holidays.
Privacy Act: Anyone is able to search the electronic form of all
comments received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (Volume

[[Page 2464]]

65, Number 70; Pages 19477-78) or you may visit http://dms.dot.gov.
We shall consider all comments received before the close of
business on the comment closing date indicated below. To the extent
possible, we shall also consider comments filed after the closing date.
We shall publish a notice of final action on the application in the
Federal Register pursuant to the authority indicated below.
Comment closing date: February 14, 2005.
(49 U.S.C. 30113; delegations of authority at 49 CFR 1.50. and
501.8)

FOR FURTHER INFORMATION CONTACT: George Feygin in the Office of Chief
Counsel, NCC-112, (Phone: 202-366-2992; Fax 202-366-3820; E-Mail:
[email protected]).

Issued on: January 6, 2005.
Stephen R. Kratzke,
Associate Administrator for Rulemaking.
[FR Doc. 05-656 Filed 1-12-05; 8:45 am]
BILLING CODE 4910-59-P