[Federal Register Volume 73, Number 102 (Tuesday, May 27, 2008)]
[Notices]
[Pages 30443-30445]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-11699]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2008-0107, Notice 1]


Spyker Automobielen B.V.; Receipt of Application for Limited 
Extension of Temporary Exemption From Certain Requirements of FMVSS No. 
208

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

ACTION: Notice of receipt of petition for limited extension of a 
Temporary Exemption from provisions of Federal Motor Vehicle Safety 
Standard (FMVSS) No. 208, Occupant Crash Protection.

-----------------------------------------------------------------------

SUMMARY: In accordance with the procedures of 49 CFR Part 555, Spyker 
Automobielen B.V. (``Spyker'') has applied for a limited extension of a 
previously received temporary exemption from certain requirements of 
FMVSS No. 208, Occupant Crash Protection, for the Spyker C8 vehicle 
line. Spyker requests extension of its temporary exemption for certain 
advanced air bag requirements. 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.
    NHTSA is publishing this notice of receipt of the application in 
accordance with the requirements of 49 U.S.C. 30113(b)(2), and has made 
no judgment on the merits of the application.

DATES: You should submit your comments not later than June 26, 2008.
    Comments: We invite you to submit comments on the application 
described below. You may submit comments identified by docket number in 
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, between 9 a.m. and 5 p.m. ET, 
Monday through Friday, except Federal holidays.
     Fax: (202) 493-2251.
    Instructions: All submissions must include the agency name and 
docket number. Note that all comments

[[Page 30444]]

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 (65 FR 19477-78).
    Docket: For access to the docket in order to read background 
documents or comments received, go to http://www.regulations.gov at any 
time, or to M-30, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue, SE., Washington, DC 20950, between 9 a.m. and 5 p.m. ET, 
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: Sarah Alves, Office of the Chief 
Counsel, NCC-112, National Highway Traffic Safety Administration, 1200 
New Jersey Avenue, SE., Washington, DC 20590. Phone: 202-366-2992; Fax: 
202-366-3820; E-Mail: [email protected].

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.
---------------------------------------------------------------------------

    \1\ See 65 FR 30680 (May 12, 2000).
---------------------------------------------------------------------------

    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 air 
bag systems compared to potential benefits discouraged some air bag 
suppliers from working with small volume 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 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 a limited extension of 
a temporary exemption for certain 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, Spyker has petitioned the agency for a limited extension of a 
temporary exemption from certain 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. The requested exemption would apply to the 
Spyker C8 vehicle line and would extend a portion of the original 
exemption for a period of 30 months beginning on June 15, 2008, ending 
on December 15, 2010. The requested extension would apply to certain 
advanced air bag requirements, specifically the requirements in S19, 
S21, S23, and S25. A copy of the petition \2\ is available for review 
and has been placed in the docket of this notice.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

III. Statutory Background for Economic Hardship Exemption

    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(a)(5)) 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

    Background. 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)). Spyker manufactured 94 
automobiles in 2006 and estimated a total production of 106 automobiles 
in 2007. Sixty Spyker automobiles were imported into the U.S. in 2006, 
and Spyker projects that U.S. imports will total 70 Spyker

[[Page 30445]]

automobiles in 2007. Spyker is a wholly owned subsidiary of Spyker Cars 
NV, a publicly traded Dutch company. Spyker stated that it is unaware 
of any other automobile manufacturer having an ownership interest in 
Spyker.\3\ Moreover, Spyker stated that Spyker Cars NV has no ownership 
interest in any other vehicle manufacturer, and is not under any common 
control with another automobile manufacturer.
---------------------------------------------------------------------------

    \3\ Only parties with an interest of more than 5% are known and 
need to register with the Dutch authority for financial markets.
---------------------------------------------------------------------------

    In July 2005, NHTSA granted Spyker a three-year hardship exemption 
from the ``basic'' air bag requirements and advanced air bag provisions 
of FMVSS No. 208 (S4.1.5.3; S14), and Part 581, expiring on June 15, 
2008 (70 FR 39007; July 6, 2005). In this same grant, NHTSA also 
exempted Spyker from S7 of FMVSS No. 108, for the first 10 Spyker C8 
vehicles imported into the United States.
    Requested exemption. Spyker has applied for a limited extension of 
that exemption. Spyker requested an additional 30 months for the 
exemption from the child and 5th percentile adult female driver out-of-
position portions of the advanced air bag provisions of FMVSS No. 208 
(S19, S21, S23, and S25).\4\ Spyker's current exemption extends until 
June 15, 2008, and Spyker requested a two-and-a-half year extension 
that would exempt Spyker's C8 vehicle line from the listed advanced air 
bag requirements through December 15, 2010.\5\
---------------------------------------------------------------------------

    \4\ The previous exemption covered these provisions by including 
S14.
    \5\ Spyker submitted a supplement to their petition on April 7, 
2008, which will be posted in this docket, and which included 
updated financial information from 2007.
---------------------------------------------------------------------------

    Economic hardship. Spyker stated that its previously established 
financial hardship \6\ continues, in part due to the start-up nature of 
the company. Specifically, Spyker's financial information submission 
showed a net operating loss of 13,000,000 Euros ($16,900,000) from 2004 
to 2006. Spyker projected a further loss in 2007 of 6,500,000 Euros 
($8,450,000).\7\ Moreover, based on 2008-2010 projections, Spyker 
estimated that if the limited extension is denied, Spyker will bear a 
loss of over 2,000,000 Euros ($2,600,000) during that time. Spyker also 
stated that the loss of sales in the U.S. that would result if the 
limited extension is denied could not be made up in the rest of the 
world because the U.S. is the largest and most important market for the 
vehicle. Spyker argued that such consequences demonstrate ``substantial 
economic hardship'' within the meaning of 49 U.S.C. 30113(b)(3)(B)(i).
---------------------------------------------------------------------------

    \6\ See 70 FR 39007 (July 6, 2005).
    \7\ All dollar values are based on an exchange rate of 1 Euro = 
$1.30.
---------------------------------------------------------------------------

    Spyker recently submitted to NHTSA a supplement to their petition 
because Spyker recently updated its accounts for 2007. Spyker stated in 
its supplement to its petition that 2007 losses now total 16,000,000 
Euros ($20,800,000), and stated that this higher number was due to 
their parent company having sold its interest in its Formula 1 (``F1'') 
racing team, and extraordinary financing and consulting costs. Spyker 
stated in this supplement to its petition that the new financial 
statement information is in further support of the substantial economic 
hardship criterion. Both Spyker's original petition and its recently 
filed supplement to the petition are available in this docket.
    Good faith efforts to comply. Spyker stated that when it filed for 
the original exemption, the C8 vehicle line had no air bag system at 
all, and that the windshield design does not permit a top-mounted air 
bag on the passenger side, thereby precluding the use of a low risk 
deployment system. Spyker indicated that it has spent over 3,500,000 
Euros bringing the C8 vehicle line into compliance with all of the 
high-speed belted and unbelted crash test requirements of the Advanced 
Air Bag rule by developing an ``interim'' driver air bag system for the 
C vehicle line. 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), and the 5th percentile adult female out-of-
position requirements for the driver seat (S25). Spyker stated that 
despite efforts to involve numerous potential suppliers, it has not 
identified any that are willing to work with the company to develop an 
automatic suppression system for compliance with S19, S21, and S23. 
Spyker has budgeted an additional 3,500,000 Euros for 2008-2010 to 
develop, test and build a fully-compliant advanced air bag system for 
the new C line vehicle. Spyker also indicated that by the time its new 
D vehicle line is launched, Spyker will have spent 5,500,000 Euros 
developing for this new line an advanced air bag system fully compliant 
with FMVSS No. 208.
    Spyker further indicated that it plans to re-engineer the C vehicle 
line for model year 2011, at which time the D line advanced air bag 
system will be incorporated into the new C line, making the redesigned 
C line fully compliant with all advanced air bag requirements. Spyker 
stated that it will use the 30 month extension period, if granted, to 
develop, test, tool and implement the redesigned model.
    Spyker 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:
    1. Spyker stated that the exempted vehicles will comply with all 
FMVSSs other than the provisions that are the subject of this extension 
request.
    2. The petitioner stated that an exemption will benefit U.S. 
employment and U.S. companies because Spyker vehicles are distributed 
by a U.S. company, Spyker of North America, and are sold and serviced 
in the U.S. through a network of 17 dealers. Spyker argued that denial 
of an extension will negatively impact these companies.
    3. Spyker argued that if the exemption is not granted, U.S. 
consumer choice would be harmed and that the agency has long maintained 
that the National Traffic and Motor Vehicle Safety Act seeks, if 
possible, to avoid limiting consumer choice.
    4. Petitioner argued that given its exotic design and high-
performance nature, the C vehicle line is not expected to be used 
extensively, nor is it expected to carry children with any frequency.
    5. Spyker stated that as of the submission date of its application 
for extension, approximately 60 exempted C line Spykers have been 
imported into the U.S. and there have been no reports of any air bag-
related injuries.
    6. Spyker stated that an important safety feature on the C line 
offers enhanced occupant protection. The petitioner stated that 
occupants are positioned in a protective ``cell'' because the main 
chassis structure is built around them.

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: May 19, 2008.
Stephen R. Kratzke,
Associate Administrator for Rulemaking.
[FR Doc. E8-11699 Filed 5-23-08; 8:45 am]
BILLING CODE 4910-59-P