[Federal Register Volume 72, Number 226 (Monday, November 26, 2007)]
[Notices]
[Pages 66028-66030]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-22966]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2007-0020, Notice 1]


Ferrari S.p.A. and Ferrari North America; Receipt of Application 
for a Temporary Exemption From the Advanced Air Bag Requirements of 
FMVSS No. 208

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

ACTION: Notice of receipt of petition for temporary exemption from 
provisions of Federal Motor Vehicle Safety Standard (FMVSS) No. 208, 
Occupant Crash Protection.

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SUMMARY: In accordance with the procedures in 49 CFR Part 555, Ferrari 
S.P.A. and Ferrari North America (collectively, ``Ferrari'') have 
petitioned the agency for a temporary exemption from certain advanced 
air bag requirements of FMVSS No. 208. The basis for the application is 
that compliance would cause substantial economic hardship to a 
manufacturer that has tried in good faith to comply with the standard.
    This notice of receipt of an application for temporary exemption is 
published in accordance with the statutory provisions of 49 U.S.C. 
30113(b)(2). NHTSA has made no judgment on the merits of the 
application.

DATES: You should submit your comments not later than December 26, 
2007.
    Comments: We invite you to submit comments on the application 
described above. You may submit comments identified by docket number at 
the heading of this notice by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Mail: DOT Docket Management Facility, M-30, U.S. 
Department of Transportation, West Building Ground Floor, Room W12-140, 
1200 New Jersey Avenue, SE., Washington, DC 20590.
     Hand Delivery or Courier: U.S. Department of 
Transportation, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue, SE., Washington, DC 20590, Monday through Friday, except 
Federal holidays.
     Fax: 1-(202)-493-2251
    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://www.regulations.gov, including any personal 
information provided.
    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.
    Docket: For access to the docket in order to read background 
documents or comments received, go to http://www.reglulations.gov, at 
any time or to M-30, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday 
through Friday, except Federal Holidays.
    Confidential Business Information: If you wish to submit any 
information under a claim of confidentiality, you should submit three 
copies of your complete submission, including the information you claim 
to be confidential business information, to the Chief Counsel, NHTSA, 
at the address given under FOR FURTHER INFORMATION CONTACT. In 
addition, you should submit two copies, from which you have deleted the 
claimed confidential business information, to Docket Management at the 
address given above. When you send a comment containing information 
claimed to be confidential business information, you should include a 
cover letter setting forth the information specified in our 
confidential business information regulation (49 CFR Part 512).

FOR FURTHER INFORMATION CONTACT: Mr. Ari Scott, Office of the Chief 
Counsel, NCC-112, National Highway Traffic Safety Administration, 1200 
New Jersey Avenue, SE., Washington, DC 20590. Telephone: (202) 366-
2992; Fax: (202) 366-3820.

Discussion

I. Advanced Air Bag Requirements and Small Volume Manufacturers

    In 2000, NHTSA upgraded the requirements for air bags in passenger 
cars and light trucks, requiring what are commonly known as ``advanced 
air bags.'' \1\ 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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    \1\ 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 were 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 earlier. 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 nature of the requirements for protecting 
out-of-position occupants, ``off-the-shelf'' systems could not be 
readily adopted. Further complicating matters, because small volume 
manufacturers build so few vehicles, the costs of developing custom 
advanced air bag systems compared to potential profits discouraged some 
air bag suppliers from working with small volume manufacturers.
    As always, we are concerned about the potential safety implication 
of any temporary exemptions granted by this agency. In the present 
case, we are seeking comments on a petition for an extension of a 
temporary exemption from the advanced air bag requirements submitted by 
a manufacturer of high-performance sports cars.

II. Overview of Petition for Economic Hardship Exemption

    In accordance with 49 U.S.C. 30113 and the procedures in 49 CFR 
Part 555, Ferrari has petitioned the agency for an extension of a 
temporary exemption from certain advanced air bag requirements of FMVSS 
No. 208. The basis for the application is that compliance would cause 
substantial economic hardship to a manufacturer that has tried in good 
faith to comply

[[Page 66029]]

with the standard. The requested exemption would apply to Ferrari F430 
model vehicles and would extend for a period of one year beginning on 
August 1, 2008. A copy of the petition \2\ is available for review and 
has been placed in the docket for this notice.
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    \2\ The company requested confidential treatment under 49 CFR 
Part 512 for certain business and financial information submitted as 
part of its petition for temporary exemption. Accordingly, the 
information placed in the docket does not contain such information 
that the agency has determined to be confidential.
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III. Statutory Background for Economic Hardship Exemptions

    A manufacturer is eligible to apply for a hardship exemption if its 
total motor vehicle production in its most recent year of production 
did not exceed 10,000 vehicles, as determined by the NHTSA 
Administrator (49 U.S.C. 30113).
    In determining whether a manufacturer of a vehicle meets that 
criterion, NHTSA considers whether a second vehicle manufacturer also 
might be deemed the manufacturer of that vehicle. The statutory 
provisions governing motor vehicle safety (49 U.S.C. Chapter 301) do 
not include any provision indicating that a manufacturer might have 
substantial responsibility as manufacturer of a vehicle simply because 
it owns or controls a second manufacturer that assembled that vehicle. 
However, the agency considers the statutory definition of 
``manufacturer'' (49 U.S.C. 30102) to be sufficiently broad to include 
sponsors, depending on the circumstances. Thus, NHTSA has stated that a 
manufacturer may be deemed to be a sponsor and thus a manufacturer of a 
vehicle assembled by a second manufacturer if the first manufacturer 
had a substantial role in the development and manufacturing process of 
that vehicle.

IV. Petition of Ferrari

    Background. NHTSA notes that 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)). While Fiat S.p.A., a 
major vehicle manufacturer, holds a majority interest in Ferrari, NHTSA 
still considers that Ferrari's production will not exceed that number. 
Consistent with past determinations, NHTSA has determined that Fiat's 
interest in Ferrari does not result in the production threshold being 
exceeded \3\ (see 70 FR 71372). In its current petition, Ferrari states 
that during the twelve month period from June 1, 2006 to June 1, 2007, 
Ferrari's worldwide production of motor vehicles was 6,249. If the 
requested exemption is granted, Ferrari anticipates that its production 
that year will be approximately 7,200 vehicles.
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    \3\ 54 FR 46321; November 2, 1989.
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    In response to Ferrari's original petition for exemption in 
2005,\4\ the agency stated that the Ferrari F430 bears no resemblance 
to any motor vehicle designed or manufactured by Fiat, and that the 
agency understood that the F430 was designed and engineered without 
assistance from Fiat. Further, the agency stated that such assistance 
as Ferrari may receive from Fiat relating to use of test facilities and 
the like is an arms length transaction for which Ferrari pays Fiat. 
Therefore, NHTSA concluded that Fiat was not a manufacturer of Ferrari 
vehicles by virtue of being a sponsor. We continue to believe this is 
the case.
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    \4\ 70 FR 71372, November 28, 2005.
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    Requested exemption. Ferrari is requesting an extension of the 
temporary exemption that it previously received, exempting it from the 
advanced air bag provisions of FMVSS No. 208 with respect to the 
Ferrari F430 vehicles. Specifically, Ferrari is requesting an exemption 
from the requirements in S19, S21, and S23 of the Standard, which 
establish requirements using infant, three-year-old child, and six-
year-old child dummies, respectively. Ferrari originally planned to 
produce the F430 only until late 2008. Thus, Ferrari only sought and 
received the current exemption, which extends until August 31, 2008. 
However, Ferrari states that unexpected developments, including the 
need to assure that the replacement model complies with new, more 
stringent European carbon dioxide and noise regulations and new 
requirements promulgated by the California Air Resources Board, have 
delayed the replacement vehicle until late 2009. Therefore, Ferrari is 
requesting a one year extension of the current exemption, through 
August 31, 2009.
    The petitioner indicated that it intends to replace the F430 in 
2009 with a new model, which will comply with all applicable FMVSSs. 
Therefore, need for the exemption is not expected to last beyond the 
date of the exemption.
    Economic hardship. The petitioner states that the inability to sell 
F430 vehicles manufactured after August 31, 2008 would have severe 
economic consequences for Ferrari S.p.A. and Ferrari North America 
(FNA). Specifically, Ferrari S.p.A., while remaining a profitable 
enterprise, would suffer approximately $77 million in lost sales in 
2009, and additional lost sales in later years. Furthermore, FNA would 
suffer $9 million in lost sales in 2009, and would suffer an overall 
loss in that year. Additionally, failure to obtain the exemption would 
cause an adverse financial effect through lost sales of replacement 
parts for several years in the future.
    Good faith efforts to comply. Ferrari states that it considered 
alternate means of compliance, but found that compliance with the 
advanced air bag requirements of FMVSS No. 208 was not possible. As 
described in the notice of Ferrari's original petition for exemption, 
the F430 was originally designed in the mid-1990s as the 360 model, and 
was designed to comply with all of the requirements of the FMVSSs in 
effect at the time the 360 was originally designed. The petitioner 
stated that the provisions of FMVSS No. 208 established in 2000 (65 FR 
30680; May 12, 2000; Advanced Air Bag rule) were not anticipated by 
Ferrari when the 360 vehicle model was designed. The F430, a derivative 
of the 360 model, was introduced in 2004. Ferrari had originally 
intended to replace the F430 in 2008, but now anticipates the 
replacement model being ready in 2009.
    As described in the notice of receipt of Ferrari's previous 
petition, Ferrari stated that it has been able to bring the F430 into 
compliance with all of the high-speed belted and unbelted crash test 
requirements of the Advanced Air Bag rule. However, it stated that it 
has not been able to bring the vehicle into compliance with the child 
out-of-position requirements (S19, S21, and S23). Ferrari also noted 
that despite efforts to involve numerous potential suppliers, it was 
unable to identify any that are willing to work with the company to 
develop an occupant classification system that would comply with the 
requirements in S19, S21, and S23. Moreover, Ferrari had stated that it 
was unable to reconfigure the F430 to accommodate an occupant 
classification system and air bag design that would comply with these 
requirements.
    In its current request, Ferrari states that when it realized that 
it would need to continue production of the F430 beyond September 1, 
2008, it again contacted several potential suppliers regarding the 
procurement of advanced air bag systems. This attempt, Ferrari states, 
was also unsuccessful. Additionally, Ferrari notes that since filing 
its initial petition, it has continued to work on compliance issues, 
and has been able to bring the F430 into full compliance with S25 of 
the standard. Paragraph S25 specifies

[[Page 66030]]

the crash test requirements for using an out-of-position 5th percentile 
adult female dummy at the driver position.
    Ferrari states that further efforts to bring the F430 vehicles into 
full compliance with FMVSS No. 208 during the term of the requested 
exemption would be futile. However, Ferrari states that it is taking 
steps to minimize the negative safety consequences of the exemption. 
First, Ferrari will continue to equip the F430 with a manual air bag 
on/off switch for the passenger air bag as standard equipment, in order 
to prevent the possibility of an air bag deployment when a child is 
present. Second, Ferrari will continue to offer to provide purchasers 
with child restraint systems designed to automatically suppress the 
passenger air bag when the restraint is present, at no cost.
    Ferrari argues that an exemption would be in the public interest. 
The petitioner put forth several arguments in favor of a finding that 
the requested exemption is consistent with the public interest and 
would not have a significant adverse impact on safety. Specifically, 
Ferrari argues that the public interest is served by four factors. 
These include: (1) Satisfying the public interest in offering consumers 
a wider variety of motor vehicle choices; (2) affording continued 
employment to the petitioner's U.S. workforce; (3) there would be 
minimal safety impact from granting this exemption; and (4) that it 
would be inequitable to prevent Ferrari from importing the F430 until 
2009, when other vehicles have been granted similar exemptions.
    Ferrari states that there is consumer demand in the United States 
for high-performance sports cars such as the F430. It argues that 
compliance with the advanced air bag requirements is virtually 
impossible for vehicles such as the F430, which was designed before the 
advanced air bag rule was proposed. Ferrari notes that NHTSA has, in 
the past, stated that it believes the public interest is often served 
by affording consumers a wider variety of motor vehicle choices. The 
petitioner also states that the public interest will be served in 
affording continued employment to the petitioner's U.S. work force, 
which would be affected by the granting or denial of the exemption.
    Ferrari also argues that the safety drawbacks of granting an 
exemption will be minimal. The F430 is designed and marketed as a high 
performance vehicle, and therefore would have relatively little on-road 
operation compared with other motor vehicles. Furthermore, the 
petitioner states that it is unlikely that young children would be 
passengers in the vehicle, and that other safety measures, such as 
passenger air bag on/off switches and child restraint systems, are 
available at no cost. In addition, in its original petition for 
exemption, the petitioner stated that the F430 also has a variety of 
passive safety features not required under the FMVSS, including seat 
belt pretensioners, among other systems. Thus, Ferrari argues, an 
exemption would have a minimal impact on safety.
    Finally, the petitioner suggested that this petition is similar to 
other petitions for exemptions from the advanced air bag standards for 
similar vehicles. Specifically, Ferrari stated that NHTSA has granted 
exemptions to several of Ferrari's competitors that extend until at 
least August 31, 2009. These exemptions extend to the Lamborghini 
Murcielago, the Lotus Elise, the Morgan Aero 8, the YES! Roadster, and 
the Koenigsegg CCX.\5\ Ferrari argues that it would be inequitable for 
the agency to deny its petition for an extension of the F430 exemption 
until August 31, 2009.
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    \5\ See 71 FR 52951; 71 FR 68888; and 72 FR 17609.
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V. Issuance of Notice of Final Action

    We are providing a 30-day comment period. After considering public 
comments and other available information, we will publish a notice of 
final action on the application in the Federal Register.

    Issued on: October 29, 2007.
Stephen R. Kratzke,
Associate Administrator for Rulemaking.
[FR Doc. E7-22966 Filed 11-23-07; 8:45 am]
BILLING CODE 4910-59-P