Cross Lander USA; Receipt of Application for a Temporary Exemption From Federal Motor Vehicle Safety Standard No. 208

In accordance with the procedures of 49 CFR part 555, Cross Lander USA (“Cross Lander”) has applied for a Temporary Exemption from the automatic restraint requirements of Federal Motor Vehicle Safety Standard (FMVSS) No. 208, “Occupant crash protection.” 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.

I. Background

Cross Lander seeks to import and distribute a multipurpose passenger vehicle, the Cross Lander 244X, manufactured in Romania. According to the petitioner, the 244X was previously known as “ARO,” and was “built for extreme off road use and such were used by many armies and NATO forces.” Over 360,000 ARO vehicles were manufactured from 1957 until 1989. The petitioner describes the 244X as similar in off-road capability to Hummer H-1 vehicles manufactured by General Motors. Although Cross Lander has negotiated with an air bag manufacturer for the design and testing of an air bag system for its vehicle, completion of the air bag development is not economically viable without additional revenue generated through immediate sales of the 244X in the United States.

A description of the 244X is set forth in the petition (Docket No. NHTSA-2005-20288). For additional information on the 244X, please go to http://www.crosslander4x4.com/.

II. Why Cross Lander Needs a Temporary Exemption

Because of an unexpected change in the choice of engine equipped on the 244X, the Gross Vehicle Weight Rating (GVWR) of the 244X is less than 5,500 pounds. However, in preparing the 244X for sale in the United States, the petitioner anticipated that the vehicle would have a higher GVWR. Because a heavier vehicle would not have been subject to the applicable automatic restraint requirements of FMVSS No. 208, the petitioner was not prepared to equip the 244X with a suitable air bag system.

According to the petitioner, the cost of making the 244X compliant with FMVSS No. 208 on short notice is beyond the company's current capabilities. Thus, Cross Lander requests a two-year exemption in order to develop a compliant automatic restraint system.

The petition indicates that Cross Lander has invested over $2 million into the company. The petitioner's draft financial statements indicate a net loss of $653,307 for the fiscal year ending 12/31/2002, and a net loss of $383,633 for the for the fiscal year ending 12/31/2003. Additionally, a 2004 cash flow analysis projects a net loss of $1,602,433. The agency requested that Cross Lander provide updated financial statements for years 2002 through 2004 and will examine this information before arriving at our decision on this application.

The petitioner expected to derive initial revenue from sales of dealership licenses. However, if the Cross Lander MPV cannot be sold in the United States, no additional dealership licenses will be sold, and existing dealers would be entitled to a full refund. In short, the company would cease operations unless it is able to begin selling their product in the immediate future.

III. Why Compliance Would Cause Substantial Economic Hardship and How Cross Lander Has Tried in Good Faith To Comply With FMVSS No. 208 and the Bumper Standard

As previously discussed, the petitioner contends that failure to obtain a two-year exemption from the requirements of FMVSS No. 208 would result in Cross Lander closing its operations because it would not be able to sell any vehicles or maintain its dealer network.

Cross Lander examined several air bag manufacturers and chose Siemens to develop its air bag system. The estimated cost of developing an advanced air bag system to meet FMVSS No. 208 is $1.2 million. The project would take approximately 18 months. Because Cross Lander has no current vehicles for sale in the United States, it is impossible to finance this project without a source of revenue. The petitioner contends that a two-year exemption would allow the Cross Lander to successfully develop a suitable air bag system.

IV. Why an Exemption Would Be in the Public Interest and Consistent With the Objectives of Motor Vehicle Safety

The petitioner put forth several arguments in favor of a finding that the requested exemption is consistent with the public interest and the objectives of the Safety Act. Specifically:

1. The petitioner argues that the 244X is likely to be used extensively off-road and would not travel frequently on public roads. In fact, the vehicle is designed specifically for that purpose and is not equipped with many “comfort features” normally associated with everyday driving. The vehicle is also equipped with a special, heavy-duty suspension. Further, the vehicle's top speed is set relatively low at 70 mph.

2. The petitioner argues that a series of crash tests, including the dynamic FMVSS No. 214 test indicate that the 244X is “very crashworthy.”

3. The petitioner suggests that over 100 people in the U.S. and 1,200 people in Romania may be in danger of losing their jobs if Cross Lander is forced to close its U.S. operations.

4. Finally, the petitioner states that 244X purchasers will be sufficiently warned about the lack of air bags. First, “significant” warning labels would inform the driver that the exempted vehicle is not equipped with air bags. Second, this information would also appear in the owner's manual. Third, an instructional video accompanying each 244X would again warn drivers that the vehicle does not come with air bags.

V. How You May Comment on Cross Lander Application

We invite you to submit comments on the application described above. You may submit comments [identified by DOT Docket Number NHTSA-2005-20288] by any of the following methods:

• Web Site: http://dms.dot.gov. Follow the instructions for submitting comments on the DOT electronic docket 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 or Regulatory Identification Number (RIN) for this rulemaking. 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 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.

Comment closing date: March 11, 2005.

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

FOR FURTHER INFORMATION CONTACT:

George Feygin in the Office of Chief Counsel, NCC-112 (Phone: 202-366-2992; Fax 202-366-3820; E-Mail: George.Feygin@nhtsa.dot.gov).