[Federal Register Volume 66, Number 78 (Monday, April 23, 2001)]
[Notices]
[Pages 20520-20521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-9999]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
[Docket No. NHTSA 01-9362; Notice 1]
Saleen, Inc.; Receipt of Application for Temporary Exemption From
Federal Motor Vehicle Safety Standard No. 208
Saleen, Inc., of Irvine, California, has applied for a temporary
exemption of two years from the automatic restraint requirements of
Federal Motor Vehicle Safety Standard No. 208 Occupant Crash
Protection. The basis of the request is that compliance would cause
substantial economic hardship to a manufacturer that has tried to
comply with the standard in good faith. 49 U.S.C. 30113(b)(3)(B)(i).
We are publishing this notice of receipt of an application in
accordance with the requirements of 49 U.S.C. 30113(b)(2). This action
does not represent any judgment of the agency on the merits of the
application.
Saleen refers to itself as a ``small volume US manufacturer which
currently produces the Saleen S281 and the XP8 Explorer.'' Saleen
receives completed and certified Mustangs and Explorers from Ford Motor
Company drop shipped at the direction of the dealers who own them.
Saleen adds a supercharger, makes ``other minor engine modifications,
front and rear bumper outer skin designs, the seat trim, [upgrades] the
tires, wheels/suspension/brakes, and [adds] appliques to the exterior
and interior of the vehicle. Saleen does not make any structural
changes to the Mustang or the Explorer.'' Under NHTSA regulations,
Saleen is considered an alterer, rather than a manufacturer, since it
modifies previously certified vehicles. (See 49 CFR 567.7). Although it
may have altered several hundred Ford vehicles in the year preceding
the filing of its application, we do not regard Saleen as a
``manufacturer.''
The company now wishes to become a manufacturer of a motor vehicle
of its own design. As the vehicle has not entered production, Saleen
has manufactured no motor vehicles in the year preceding the filing of
its application. The vehicle is called the S7 and is a ``two seat,
coupe, sportscar.'' The S7 has been shown in prototype form at
automobile shows around the country. The prototype does not fully
comply with the lighting requirements of Motor Vehicle Safety Standard
No. 108, Lamps, Reflective Devices and Associated Equipment, but Saleen
assures us that the next prototype and the production models to follow
will meet Standard No. 108 and all other standards as well, with the
exception of the automatic restraint requirements of Standard No. 208,
paragraph S4.1.5.3.
Saleen has asked for a three-year exemption for the S7 and
anticipates that it will sell a total of 112 of them by the end of
2003. According to the petition, preliminary compliance-related
development of the S7 was started in July 2000. By the time it filed
its petition in December 2000, the company had ``spent an estimated
total of 180 man-hours and $18,000 relating to the installation of a
driver and passenger side airbag system on the S7.'' The monies spent
thus far ``have been in the areas of exterior and interior design
necessary for the installation of airbags.'' It has been advised that
the airbag development process would cost approximately $1,000,000 not
including the cost of test prototype vehicles and airbags, and tooling.
This process cannot be completed by the time the company expects to
launch the S7, in the summer of 2001. Indeed, the company estimates
that it will take up to 20 months to fully develop a system and that
the total costs will approach $3,000,000.
Saleen has cumulative net losses before taxes for the past three
fiscal years of $9,716,334. It states that it ``simply cannot afford to
develop the air bags in either the first (2001)or second (2002) year''
because of these losses. The company ``has exhausted all of its
borrowing capacity and must sell and ship S7 vehicles (as well as its
other products) to generate cash flow sufficient to defray airbag
development costs as well as other S7 development costs.'' Although
``funding for the S7 was secured through a private investor,'' it
states that ``all further funding for airbags must come from our
ordinary income.'' Even with an exemption, Saleen projects net losses
continuing through the end of the period though earnings before
interest, taxes, depreciation and amortization would be positive. It
plans to spread out air bag development costs over the next three years
to achieve compliance by the end of the exemption period. If the
petition is denied, the company believes that it would lose credibility
with dealers and negatively impact the demand for altered Saleen
vehicles.
The company argues that a temporary exemption is in the public
interest because the S7 ``is a unique super car designed and produced
in the US utilizing many US sourced components.'' An exemption would
also allow it to maintain its payroll of 122 full time employees and to
continue its purchase of US sourced components for the Mustangs and
Explorers that it modifies. Its business with US suppliers ``indirectly
provides employment for several hundred other Americans.'' An exemption
is consistent with vehicle safety objectives because the S7 otherwise
will conform to all applicable Federal motor vehicle safety standards.
Interested persons are invited to submit comments on the
application described above. Comments should refer to the docket number
and the notice number, and be submitted to: Docket Management, Room PL-
401, 400 Seventh Street, SW., Washington, DC 20590. It is requested but
not required that 10 copies be submitted.
All comments received before the close of business on the comment
closing date indicated below will be considered, and will be available
for examination in the docket at the above address both before and
after that date. The Docket Room is open from 10:00 a.m. until 5:00
p.m. To the extent
[[Page 20521]]
possible, comments filed after the closing date will also be
considered.
Notice of final action on the application will be published in the
Federal Register pursuant to the authority indicated below.
Comment closing date: May 23, 2001.
(49 U.S.C. 30113; delegations of authority at 49 CFR 1.50. and
501.8)
Issued on April 18, 2001.
Stephen R. Kratzke,
Associate Administrator for Safety Performance Standards.
[FR Doc. 01-9999 Filed 4-20-01; 8:45 am]
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