[Federal Register Volume 71, Number 157 (Tuesday, August 15, 2006)]
[Notices]
[Pages 46974-46976]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-13314]



[[Page 46974]]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2006-25592]


Morgan Motor Company Limited; Receipt of Application for a 
Temporary Exemption From Air Bag Provisions of Federal Motor Vehicle 
Safety Standard No. 208

AGENCY: National Highway Traffic Safety Administration (NHTSA), 
Department of Transportation (DOT).

ACTION: Notice of receipt of application for a temporary exemption from 
air bag provisions of Federal Motor Vehicle Safety Standard No. 208, 
Occupant crash protection.

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SUMMARY: In accordance with the procedures of 49 CFR Part 555, Morgan 
Motor Company, Limited (Morgan) has applied for a Temporary Exemption 
from the air bag requirements of Federal Motor Vehicle Safety Standard 
(FMVSS) No. 208, ``Occupant Crash Protection,'' for the Morgan 
``traditional roadster.'' 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.
    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.

DATES: You should submit your comments not later than August 30, 2006.

FOR FURTHER INFORMATION CONTACT: Ed Glancy or Eric Stas in the Office 
of Chief Counsel, NCC-112, (Phone: 202-366-2992; Fax 202-366-3820).

SUPPLEMENTARY INFORMATION:

I. Background

    Founded in 1909, Morgan is a small, privately-owned vehicle 
manufacturer producing approximately 600 specialty sports cars per 
year.\1\ Morgan manufactures several models, but at present, only sells 
the Aero 8 in the U.S. Morgan intended to produce a vehicle line 
specific to the U.S. market, with Ford supplying the engine and 
transmission. However, for technical reasons, the project did not come 
to fruition, and Morgan temporarily stopped selling vehicles in the 
U.S. in 2004. In May 2005, Morgan obtained a temporary exemption from 
this agency's bumper standard and began selling the Aero 8 in the U.S.
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    \1\ A manufacturer is eligible to apply for a hardship exemption 
if its total motor vehicle production in its most recent year of 
production does not exceed 10,000, as determined by the NHTSA 
Administrator (15 U.S.C. 1410(d)(1)).
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    On July 12, 2006 (71 FR 39386), NHTSA published a notice of receipt 
of five applications for temporary exemptions from the advanced air bag 
requirements of Federal Motor Vehicle Safety Standard (FMVSS) No. 208, 
Occupant Crash Protection. Among these petitions was one from Morgan, 
for the Aero 8, which is discussed at pages 39390-39391. Morgan's 
petition is included in the docket for that notice, i.e., Docket NHTSA-
2006-25324.
    That notice of receipt did not address a second request by Morgan. 
In a document dated February 6, 2006, Morgan petitioned for an 
exemption for a different vehicle, its ``traditional roadster,'' from 
all air bag requirements in FMVSS No. 208 (i.e., the standard's 
requirement that vehicles be equipped with air bags as well as the 
advanced air bag requirements) from September 2006 through September 
2009. That company titled this document ``Supplement to Pending Morgan 
Part 555 Temporary Exemption.'' Morgan explained that it did not file a 
petition for the traditional roadster at the same time as it petitioned 
for the Aero 8 because in October 2005 (when the Aero 8 petition was 
filed), Morgan planned to sell only the Aero 8 in the U.S. from 
September 2006-September 2009. The company did not plan to sell the 
traditional roadster during that period because the Rover engine used 
in the U.S. version of the traditional roadster for 35 years was no 
longer able to meet more stringent U.S. emissions standards.
    In late 2005, Morgan found a U.S.-certified Ford V6 engine for the 
U.S. traditional roadster and built a limited production run of 80 
vehicles. The traditional roadster ``immediately sold out.'' In order 
to maintain U.S. sales and to produce revenue, Morgan then decided to 
continue to sell the U.S. traditional roadster. However, while the 
traditional roadster had a mechanical Breed standard air bag system 
since 1996, those air bags are now out of production and are no longer 
available. Morgan indicated that the final limited production run of 80 
vehicles using the Ford V6 engine used the last of these air bag 
systems. In addition, Morgan stated that the Aero standard air bag 
system cannot be fitted to the traditional roadster because the 
interiors and chassis are completely different.
    We note that in its February 2006 document, Morgan asked that its 
exemption requests for the traditional roadster and Aero be considered 
independently. As indicated above, we have already requested public 
comments on Morgan's petition concerning the Aero, and expect to issue 
a decision shortly on that request. The agency will make a decision 
concerning Morgan's petition concerning the traditional roadster after 
considering public comments submitted in response to this notice.
    In 2000, NHTSA upgraded the requirements for air bags in passenger 
cars and light trucks, requiring what is commonly known as ``advanced 
air bags.'' \2\ The upgrade was designed to meet the goals of improving 
protection for occupants of all sizes, belted and unbelted, in moderate 
to high speed crashes, and of minimizing the risks posed by air bags to 
infants, children, and other occupants, especially in low speed 
crashes.
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    \2\ See 65 FR 30680; May 12, 2000.
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    The advanced air bag requirements were a culmination of a 
comprehensive plan that the agency announced in 1996 to address the 
adverse effects of air bags. This plan also included an extensive 
consumer education program to encourage the placement of children in 
rear seats. The new requirements were phased in beginning with the 2004 
model year.
    Small volume manufacturers are not subject to the advanced air bag 
requirements until September 1, 2006, but their efforts to bring their 
respective vehicles into compliance with these requirements began 
several years ago. However, because the new requirements were 
challenging, major air bag suppliers concentrated their efforts on 
working with large volume manufacturers and thus, until recently, small 
volume manufacturers had limited access to advanced air bag technology. 
Because of the complex nature of the requirements for protecting out-
of-position occupants, ``off-the-shelf'' systems could not be readily 
adopted. Further, the high costs of developing custom advanced air bag 
systems, compared to limited potential profits from selling those air 
bags to small volume manufacturers, discouraged some air bag suppliers 
from working with those manufacturers.
    The agency has carefully tracked occupant fatalities resulting from 
air bag deployment. Our data indicate that the agency's efforts in the 
area of consumer education and manufacturers' providing depowered air 
bags were successful in reducing air bag fatalities even before 
advanced air bag requirements were implemented.
    As indicated above, for its traditional roadster, Morgan is 
requesting an exemption not only from the advanced

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air bag requirements, but also from the standard's requirements for air 
bags altogether. As always, we are concerned about the potential safety 
implications of any temporary exemptions granted by this agency. The 
agency is accepting comment on whether to grant Morgan's application.

II. Morgan's Statement of Economic Hardship

    Morgan stated that without the sales of the U.S. traditional 
roadster from September 2006-September 2009, it would lose an 
additional $315,000 on top of the losses estimated in the October 2005 
petition for the Aero.\3\ It further stated that if it were able to 
sell the traditional roadster in the U.S. during the exemption period, 
``the resulting revenues would also be critical to funding the 
development of the new advanced air bag for use in all Morgan vehicles 
destined for the U.S. after September 2009.'' Morgan's previous 
financial submission indicates that the company's losses over the last 
5 years have totaled more than $3,600,000. In 2004, Morgan made a small 
profit for the first time in three years. Morgan predicted a net loss 
for fiscal year 2005.
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    \3\ Estimated to be between $3,196,179 and $5,066,938. When 
costs for interior redesign, crash cars, and tooling are included, 
the estimate rises to between $5,648,679 and $7,519,438. (See 71 FR 
at 39391.)
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    Morgan stated that even adding the projected sales of the 
traditional roadster, the total U.S. ``exempted-car sales'' forecast 
for September 2006-September 2009 remain about the same: For 2006, 50 
vehicles; for 2007, 250 vehicles; for 2008, 250 vehicles; and for 2009, 
250 vehicles. Morgan also provided information on the sales of the 80 
model year 2005 traditional roadsters (with the Ford V6 engine).
    We note that in commenting on the agency's July 2006 notice 
concerning its request for a temporary exemption for the Aero, Morgan 
indicated that the temporary exemptions it was seeking would involve 
400 Aeros over three years, and 400 Roadsters over three years.

III. Morgan's Statement of Good Faith Efforts To Comply

    In its October 2005 submission, Morgan stated that it has been 
working with the air bag supplier Siemens to develop an advanced air 
bag system for the Aero 8. However, a lack of funds and technical 
problems precluded the implementation of an advanced air bag system for 
the Aero 8. It said that the minimum time needed to develop an advanced 
air bag system (provided that there is a source of revenue) is 2 years. 
Specific technical challenges include the following matters. Morgan 
does not have access to the necessary sensor technology to pursue the 
``full suppression'' passenger air bag option. Due to the design of the 
Aero 8 platform dashboard, an entirely new interior solution and design 
must be developed. Chassis modifications are anticipated due to the 
originally stiff chassis design.
    In its February 2006 petition, Morgan stated that it cannot install 
airbags in the U.S. traditional roadster to be built between September 
2006-September 2009 even though the Aero 8 vehicles built during that 
period will have standard air bags. Morgan provided two reasons why the 
traditional roadster ``cannot have air bags'' while the Aero 8 can. 
First, since 1996, the traditional roadsters have had a mechanical 
Breed standard air bag system. In 1997, Breed stopped production of the 
air bags fitted to the traditional roadsters. Thus, these bags are no 
longer available. Morgan states that it cannot obtain any more 
components. The final run of the 80 traditional roadsters with the Ford 
V6 engine used the last of the air bag systems.
    Second, the Aero 8 standard air bag system cannot be fitted into 
the traditional roadster because the interiors and chassis are 
completely different. Morgan asserts that it would not be possible to 
integrate the Aero 8 air bag components into the traditional roadster's 
design because of both physical and operational differences. The Aero 8 
air bag steering wheel will not fit in the traditional roadster's 
design, and the Aero 8 passenger air bag will not fit into the 
traditional roadster's instrument panel. In terms of air bag operation, 
to use the Aero 8 system in the traditional roadster, there would have 
to be a new deployment control/trigger system developed due to the 
significantly different crash pulses between the Aero 8 aluminum tub 
and the traditional roadster steel chassis.
    Morgan stated that the traditional roadster will have an advanced 
air bag system at the same time that the Aero 8 will. At present, the 
traditional roadster uses the same design as it has had since 1936, a 
steel chassis with a wooden frame for the body panels. As part of the 
development of the advanced air bag system, Morgan plans to switch the 
traditional roadster onto the aluminum tub chassis used by the Aero 8. 
In this way, the advanced air bag program (through Siemens) that Morgan 
outlined in its Part 555 exemption petition for the Aero 8 will also be 
applicable to the traditional roadster. Morgan believes that when its 
advanced air bag system is ready in 2009, the air bag system will 
simultaneously be installed in both the Aero and traditional roadster 
models. Morgan asserts that it ``obviously cannot expend the resources 
to develop an air bag system--advanced or standard'' for the 
traditional roadster that is separate from the air bag system being 
developed for the Aero 8. Morgan cites this inability as the reason why 
there cannot be an interim standard air bag system for the traditional 
roadster during the period September 2006-September 2009.

IV. Morgan's Statement of Public Interest

    In its original petition, which concerned the Aero, Morgan put 
forth several arguments supporting its view that the requested 
exemption is consistent with the public interest. According to Morgan, 
if the exemption was denied and Morgan stops U.S. sales, Morgan's U.S. 
dealers would unavoidably have numerous lay-offs, resulting in U.S. 
unemployment. Denial of an exemption would reduce consumer choice in 
the specialty sports car market sector in which Morgan cars compete. 
That company argued that the Morgan vehicles will not be used 
extensively by owners, and are unlikely to carry small children. 
Finally, according to Morgan, granting an exemption would assure the 
continued availability of proper parts and service support for existing 
Morgan owners. Without an exemption, Morgan would be forced from the 
U.S. market, and Morgan dealers would find it difficult to support 
existing customers.
    We note that in its February 2006 document requesting an exemption 
for the traditional roadster, that company generally did not discuss 
whether or how these arguments would apply to its request concerning 
the traditional roadster. We invite Morgan to address this issue. As 
indicated above, Morgan did argue that revenues from selling the 
traditional roadster would be critical to funding the development of 
the new advanced air bag for use in all Morgan vehicles destined for 
the U.S. after September 2009.

V. How You May Comment on the Morgan ``Traditional Roadster'' 
Application

    We invite you to submit comments on the application described 
above.
    You may submit comments (identified by the DOT Docket number in the 
heading of this document) by any of the following methods:
     Web site: http://dms.dot.gov. Follow the instructions for 
submitting comments on the DOT electronic docket

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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 for this notice. 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 65, Number 70; Pages 19477-78) or you may visit 
http://dms.dot.gov.
    We are providing a 15-day comment period in light of the short 
period of time between now and September 1, 2006. 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.

(49 U.S.C. 30113; delegations of authority at 49 CFR 1.50 and 501.8)

    Issued on: August 9, 2006.
H. Keith Brewer,
Director, Crash Avoidance Standards.
[FR Doc. E6-13314 Filed 8-14-06; 8:45 am]
BILLING CODE 4910-59-P