[Federal Register Volume 74, Number 139 (Wednesday, July 22, 2009)]
[Notices]
[Pages 36303-36307]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-17384]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2009-0063]


Ferrari S.p.A and Ferrari North America, Inc.; Grant of 
Application for Extension of 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: Grant of petition for extension of a temporary exemption from 
certain provisions of Federal Motor Vehicle Safety Standard (FMVSS) No. 
208, Occupant Crash Protection.

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SUMMARY: This notice grants the Ferrari S.p.A and Ferrari North 
America, Inc. application for extension of a temporary exemption from 
some requirements of FMVSS No. 208, Occupant Crash Protection. The 
exemption applies to the F430 vehicle line. In accordance with 49 CFR 
part 555, the basis for the grant is that compliance would cause 
substantial economic hardship to a low-volume manufacturer that has 
tried in good faith to comply with the standard, and the exemption 
would have a negligible impact on motor vehicle safety. The exemption 
is effective through August 31, 2009.
    In accordance with the requirements of 49 U.S.C. 30113(b)(2), we 
published

[[Page 36304]]

a notice of receipt of the application and asked for public 
comments.\1\
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    \1\ To view the application or public comments, please go to: 
http://www.regulations.gov (Docket No. NHTSA-2007-0020).

DATES: The exemption from the applicable FMVSSs is effective from July 
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22, 2009 through August 31, 2009.

FOR FURTHER INFORMATION CONTACT: Ari Scott, Office of the Chief 
Counsel, NCC-112, National Highway Traffic Safety Administration, 1200 
New Jersey Avenue, SE., West Building 4th Floor, Room W41-326, 
Washington, DC 20590. Telephone: (202) 366-2992; Fax: (202) 366-3820; 
e-mail: [email protected].

SUPPLEMENTARY INFORMATION: 
I. Advanced Air Bag Requirements and Small Volume Manufacturers
II. Overview and Statutory Background of Petition for Economic 
Hardship
III. Petition of Ferrari
IV. Federal Register Notice of November 26, 2007
V. NHTSA Analysis of Petition
VI. Agency Decision

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.'' \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 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.
    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 a petition submitted on July 26, 2007,\3\ Ferrari S.p.A and 
Ferrari North America, Inc. (``Ferrari'') requested an extension of the 
temporary exemption that it previously received,\4\ exempting it from 
certain advanced air bag provisions of FMVSS No. 208 with respect to 
the Ferrari F430 vehicles. Specifically, Ferrari is requesting an 
extension of 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 requested 
a one-year extension through August 31, 2009. The rationale for this 
extension is that while Ferrari had originally anticipated launching a 
redesigned vehicle (that would be fully compliant) in 2008, delays have 
pushed that date back to 2009, and the company would like to extend its 
existing exemption to allow it to continue to sell the F430 until the 
compliant successor vehicle is launched.
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    \3\ The petition is available at http://www.regulations.gov, 
Docket No. NHTSA-2007-0020.
    \4\ The original petition of Ferrari is available at http://www.regulations.gov, Docket No. NHTSA-2005-23093. Furthermore, the 
notice granting that petition, Ferrari S.p.A and Ferrari North 
America, Inc. Grant of Application for a Temporary Exemption From 
S14.2 of Federal Motor Vehicle Safety Standard No. 208, was 
published at 71 FR 29389, May 22, 2006.
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II. Overview and Statutory Background of Petition for Economic Hardship

    In accordance with 49 U.S.C. 20112 and the procedures in 49 CFR 
Part 555, Ferrari has petitioned the agency for extension of a 
temporary exemption from certain advanced air bag requirements of FMVSS 
No. 208, Occupant Crash Protection, for the F430 vehicles. The basis of 
the application was that compliance would cause substantial economic 
hardship to a manufacturer that has tried in good faith to comply with 
the standard. 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.
    Finally, while 49 U.S.C. 30113(b) states that exemptions from a 
Safety Act standard are to be granted on a ``temporary basis,'' \5\ the 
statute also expressly provides for renewal of an exemption on 
reapplication. Manufacturers are nevertheless cautioned that the 
agency's decision to grant an initial petition in no way predetermines 
that the agency will repeatedly grant renewal petitions, thereby 
imparting semi-permanent exemption from a safety standard. Exempted 
manufacturers seeking renewal must bear in mind that the agency is 
directed to consider financial hardship as but one factor, along with 
the manufacturer's on-going good faith efforts to comply with the 
regulation, the public interest, and consistency with the Safety Act, 
generally, as well as other such matters provided in the statute.
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    \5\ 49 U.S.C 30113(b)(1).
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III. 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

[[Page 36305]]

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 \6\ (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 
during the extension year of the exemption will be approximately 7,200 
vehicles.
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    \6\ 54 FR 46321; November 2, 1989.
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    In response to Ferrari's original petition for exemption in 
2005,\7\ 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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    \7\ 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 extension 
of its exemption from the requirements in S19, S21, and S23 of the 
Standard, which establishes 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 extended until August 
31, 2008.\8\ 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.
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    \8\ We note that under 49 CFR 555.8(e), ``if an application for 
renewal of temporary exemption that meets the requirements of Sec.  
555.5 has been filed not later than 60 days before the termination 
date of an exemption, the exemption does not terminate until the 
Administrator grants or denies the application for renewal.''
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    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 during 
the one year period of the extended exemption, 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 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 the 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

[[Page 36306]]

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, theYES! Roadster, and 
the Koenigsegg CCX.\9\ 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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    \9\ See 71 FR 52951; 71 FR 68888; and 72 FR 17609.
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IV. Federal Register Notice of November 26, 2007

    In the Federal Register of November 26, 2007 (72 FR 66028), we 
published a notice announcing receipt of an application from Ferrari 
for a temporary exemption from the advanced air bag requirements of 
FMVSS No. 208 for the F430. We invited public comment on Ferrari's 
application. We received no comments in response to this publication.

V. NHTSA Analysis of Petition

    The following discussion provides our decision regarding Ferrari's 
temporary exemption request pertaining to the advanced air bag 
requirement of FMVSS No. 208.
    The fundamental problem which is causing Ferrari to be unable to 
fully comply with the advanced air bag requirements relates to the 
design cycle of the vehicle. As stated in the original petition for 
exemption, the model at issue here, the F430, is based on the design of 
the model 360. This model was designed in the 1990s, before Ferrari had 
any reason to anticipate that FMVSS No. 208 would be amended to impose 
the advanced air bag requirements. Despite significant expenditures of 
capital and labor in pursuit of compliance,\10\ Ferrari was unable to 
bring its vehicle into compliance (although, we note, it was able to 
comply with paragraph S25 of Standard No. 208). Ferrari believes that 
the only achievable solution to bring the F430 into compliance is a 
complete redesign of the vehicle, which, due to the long design cycle, 
is scheduled for 2009.
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    \10\ The precise figures are provided in the confidential 
version of the petition.
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    In its petition for renewal, Ferrari argued that the obstacle to 
compliance is not cost, but, rather, compliance is an impossibility. 
Numerous design elements, including the chassis, the interior occupant 
compartment case, the space behind the instrument panel, the air bags, 
and the seats, were designed in a manner that preclude compliance with 
the new requirements. The vehicle chassis has an extremely low profile 
and ride height that preclude the addition of any available occupant 
classification system, and the limited room behind the instrument panel 
and in the occupant compartment make it impossible to install air bags 
that satisfy all of the advanced air bag requirements. Additionally, 
there are no air bags available that Ferrari can purchase that could be 
installed in the F430. The compliant air bags that Ferrari uses on its 
12-cylinder 612 Scaglietti and 599 GTB vehicles cannot be used in the 
F430 because the former vehicles have a larger occupant compartment and 
utilize occupant classification sensors that cannot, due to size and 
design, be installed on the F430.
    Ferrari stated that its inability to sell the F430 in the United 
States after September 1, 2008 would lead to a substantial loss of 
sales and revenue. Ferrari projected that if it were unable to sell the 
F430 model in the U.S., it would realize a decrease in net profit of 
approximately 56 million Euros ($77,000,000, as of the time of the 
petition) during this period. Ferrari stated that such consequences 
demonstrate ``substantial economic hardship'' within the meaning of 49 
U.S.C. 30113(b)(3)(B)(i).
    The petitioner cited a number of effects that would result from 
this hardship. A denial of the petition would have substantial effects 
on FNA's income in 2009 (over $9 million in lost income), leading to a 
pre-tax loss in that year. It would also have a negative impact on the 
company's sales of replacement parts for several years, as well as 
impact several small specialty service providers. Finally, it would 
have a significant effect on the network of Ferrari dealers in the 
United States, including a potential loss of jobs among employees of 
those dealerships.
    Ferrari has requested that additional specific details regarding 
its finances and financial forecasts be afforded confidential treatment 
under 49 CFR 512.4, asserting a claim for confidential information. We 
have determined that this information is to be afforded such treatment.
    While it complies with a significant portion of the requirements of 
FMVSS No. 208, the petitioner has not been able to achieve full 
compliance despite considerable effort put to that end. As described in 
the notice of receipt of Ferrari's previous petition, Ferrari 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 has still not been able to bring the vehicle into 
compliance with the child out-of-position requirements (S19, S21, and 
S23). Furthermore, 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.
    Despite the fact that it had already obtained an exemption through 
August 21, 2008, when Ferrari 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, like previous efforts to induce large-scale 
component suppliers to design a custom advanced air bag system, was 
unsuccessful. Additionally, as stated previously, 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 the test 
requirements for using an out-

[[Page 36307]]

of-position 5th percentile adult female dummy at the driver position.
    NHTSA is aware that Ferrari will not be undertaking additional 
efforts during the term of this extension to bring the F430 vehicles 
into full compliance with FMVSS No. 208. Instead, the company intends 
to achieve full compliance with the launch of the redesigned vehicle in 
2009. However, during the year of this extension, Ferrari will be 
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.
    As stated above, Ferrari does not intend to bring the F430 into 
compliance with FMVSS No. 208 during the period of this exemption. 
Instead, by the end of the requested extension, Ferrari will cease 
selling the F430.
    We believe that there are a number of public interest 
considerations served by granting this petition. These include: (1) The 
general consideration of affording consumers a wider variety of motor 
vehicle choices; (2) the economic benefits of affording continued 
employment to the petitioner's U.S. work force; (3) the estimated 
minimal impact due to the relatively low-use nature of the vehicle and 
the rare use of the vehicle by young children; (4) the additional 
safety features of the vehicle as described by the petitioner; and (5) 
the petitioner's willingness to provide additional child safety 
features to consumers at no cost. Each of these is discussed below. We 
note that while no one factor is dispositive in our decision, overall, 
we believe that they, in combination with Ferrari's continuous efforts 
to meet the advanced air bag requirements for the redesigned vehicle, 
present a persuasive case for the current exemption to be extended one 
year.
    As discussed in previous decisions on temporary exemption 
applications, the agency believes that the public interest is served by 
affording consumers a wider variety of motor vehicle choices.
    Traditionally, the agency has concluded that the public interest is 
served in affording continued employment to the petitioner's U.S. work 
force. We note that Ferrari is a well-established company with a small 
but not insignificant U.S. presence and we believe that the sales 
reduction would negatively affect U.S. employment. Specifically, 
reduction in sales would likely affect employment not only at FNA, but 
also at Ferrari dealers, repair specialists, and several small service 
providers that transport Ferrari vehicles from the port of entry to the 
rest of the United States.
    We believe this exemption will have negligible impact on motor 
vehicle safety for several reasons. One reason is the limited number of 
vehicles affected and the fact that Ferrari vehicles, like other high-
cost, high-performance sports cars, are not typically used for daily 
transportation. NHTSA is well aware that the yearly usage of a vehicle 
such as an F430 is substantially lower compared to vehicles used for 
everyday transportation.
    Additionally, the agency examined the Fatality Analysis Reporting 
System (FARS) and the National Automotive Sampling System 
Crashworthiness Data System (NASS CDS) data for years 1995-2007. These 
data indicate that over the past 13 years, there was one severe injury 
in a NASS CDS case, and five fatalities in FARS cases involving the 360 
Modena or the F430. None of the injured or killed occupants in these 
vehicles were children. Thus, there were no children involved in 
crashes of Ferrari 360 or F430 vehicles included in these databases, 
which further mitigates the safety impact of noncompliance with 
portions of FMVSS No. 208.
    The petitioner put forth a variety of public interest 
considerations in its original petition for exemption. In the Federal 
Register notice granting the original petition for exemption, the 
agency summarized those arguments.\11\ With regard to additional safety 
features, we noted that:
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    \11\ See 71 FR 29389, at 29391.

    Ferrari states that the vehicle is equipped with a variety of 
``active safety'' systems beyond that required by the FMVSSs and 
that these systems ``significantly improve vehicle handling and 
enhance controllability.'' Such systems include the Manettino 
control system, which adjusts vehicle handling and stability to 
specific driving conditions; the Control Stability System, an 
electronic stability control system; Electro-Hydraulic Differential, 
a system that manages torque distribution between the two rear 
wheels to improve stability; Continuous Damping Control, a system 
that adjusts to road conditions in order to improve braking; and a 
``Sky-Hook'' strategy.\12\
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    \12\ According to the petitioner, the ``Skyhook'' strategy 
detaches the vehicle body, as a sprung mass, from what is taking 
place on the axles and wheels by calming the movement of the body. 
In addition to improved comfort, this provides for optimal control 
of the vehicle body at all times.

    While the availability of these features is not critical to our 
decision, it is a factor in considering whether the exemption is in the 
public interest. Specifically, we believe that these safety features 
will help to mitigate the safety disbenefits of not complying with all 
of the advanced air bag requirements.
    A final factor that played into our decision to grant this 
exemption is that Ferrari has voluntarily included two alternative 
means for passenger air bag suppression for the protection of children 
being transported in the right front seating position, which was also 
discussed in the original petition for exemption and the accompanying 
notices. First, Ferrari has provided a manual on/off switch. This 
enables the passenger air bag to be manually turned off when a child is 
present, which will help to prevent certain air bag-induced injuries. 
Second, Ferrari offers a special child restraint system that 
automatically suppresses the passenger air bag when it is properly 
installed in the right front passenger seat. Ferrari offers this 
automatic child restraint system at no cost to the consumer, upon 
request. Both of these features offer passenger air bag suppression 
capability in the event a child needs to be transported in the right 
front seating position, and support our findings that this exemption 
will have negligible impact on motor vehicle safety.

VI. Agency Decision

    In consideration of the foregoing, we conclude that compliance with 
the advanced air bag requirements of FMVSS No. 208, Occupant Crash 
Protection, would cause substantial economic hardship to a manufacturer 
that has tried in good faith to comply with the standard. We further 
conclude that granting of an exemption would be in the public interest 
and consistent with the objectives of traffic safety.
    In accordance with 49 U.S.C. Sec.  30113(b)(3)(B)(i), Ferrari is 
granted an extension of NHTSA Temporary Exemption No. EX 06-1. The 
exemption shall remain until August 31, 2009 as indicated in the DATES 
section of this notice.

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

    Issued on: July 16, 2009.
Ronald L. Medford,
Acting Deputy Administrator.
[FR Doc. E9-17384 Filed 7-21-09; 8:45 am]
BILLING CODE 4910-59-P