Interpretation ID: nht89-2.52

TYPE: INTERPRETATION-NHTSA

DATE: 08/01/89

FROM: MICHAEL E. KASTNER -- DIRECTOR OF GOVERNMENT RELATIONS NTEA WASHINGTON OFFICE

TO: SAMUEL K. SKINNER SECRETARY OF TRANSPORTATION U.S. DEPARTMENT OF TRANSPORTATION

TITLE: NONE

ATTACHMT: ATTACHED TO LETTER DATED 08/24/89 EST; FROM JEFFREY R. MILLER -- NHTSA TO MICHAEL E. KASTNER -- NATIONAL TRUCK EQUIPMENT ASSOCIATION; REDBOOK A34; STANDARD 204; LETTER DATED 08/26/87 FROM ERIKA Z. JONES -- NHTSA TO TAK FUJITANI; LETTER DATED 06 /29/89 FROM SAMUEL K. SKINNER -- DOT TO ERNEST F. HOLLINGS -- SENATE

TEXT: Dear Mr. Secretary:

I am writing on behalf of the National Truck Equipment Association ("NTEA"), which represents over 1,400 companies involved in the manufacture and distribution of commercial and vocational trucks, to express our concern with the Department of Transpor tation's ("DOT" or the "Department") intention to extend regulations that currently apply only to passenger vehicles to the full range of light trucks including those that are not used for family transportation.

Recently you received from Senator Hollings, Chairman of the Senate Commerce Committee, and others on the Committee, a letter requesting that the Department, and the National Highway Traffic Safety Administration ("NHTSA" or the "Agency") in particula r, take steps to apply certain passenger car Federal Motor Vehicle Safety Standards ("Safety Standards" or "FMVSS") to light trucks, vans and sport-utility vehicles. In response, you indicated that the Department would make recommendations to the White House concerning such rulemaking initiatives. Senator Hollings' request was based on the fact that such vehicles "are being used primarily for transporting families rather than hauling freight."

In light of two rulemaking proceedings completed by NHTSA within the past 18 months, in which the Agency failed adequately to distinguish between vehicles used for "transporting families" from those used for "hauling freight," the NTEA questions wheth er the Agency has sufficient understanding of the relevant facts and law to pursue such new rulemaking initiatives fairly and objectively. Although the Agency has made an effort to understand the multi-stage manufactured truck industry, we fear that, unt il the Agency fully appreciates the manner in which trucks are produced, it will continue to adopt regulatory requirements that impose impossible burdens on the small- and medium-sized companies in the truck body and equipment industry.

In November 1987, the Agency published two final rules that resulted in the dynamic testing (i.e., crash testing) requirements of FMVSS 204 (steering column rearward displacement) and 208 (occupant crash protection) being applied to a wider array of l ight-truck types and an increased population of multi-stage truck manufacturers. The NTEA submitted a petition for reconsideration of each final rule. NHTSA denied the NTEA's petitions for reconsideration for FMVSS 208 in December 1988 and for FMVSS 20 4 in June 1989.

NTEA argued in its petitions for reconsideration that dynamic testing cannot reasonably and practicably be applied to the small- and medium-sized businesses that produce work-related light trucks manufactured in two or more stages. NHTSA rejected the NTEA's arguments, primarily on the basis that, under the present Safety Standard certification requirements, final-stage manufacturers could effectively avoid certifying to Safety Standards that include dynamic testing requirements. NHTSA expressly ackn owledged that final-stage manufacturers "do not have the engineering or financial resources to conduct dynamic testing."

The alternatives to dynamic testing offered by NHTSA to the truck body and equipment industry demonstrate that the Agency misunderstands its own regulations and the manner in which commercial vehicles are produced in the United States. These misunder standings, which we believe render the Agency's rulemaking arbitrary and capricious, include the following threshold issues:

1. NHTSA has Misinterpreted its Certification Regulations

According to NHTSA, "[t]he final-stage manufacturer need not conduct any crash testing or engineering analyses if it completes its vehicles within the limits specified by the incomplete vehicle manufacturer. . . . When the vehicle is completed within the incomplete vehicle manufacturer's specification, the final-stage manufacturer need only so state on its certification label and the responsibility for the vehicle's conformity with the standards rests entirely on the incomplete vehicle manufacturer. " 54 Fed. Reg. 24348 for FMVSS 204 and similarly at 53 Fed. Reg. 50225 for FMVSS 208.

In the denial of NTEA's petition for reconsideration of FMVSS 208, NHTSA states that "[t]hose provisions [the certification regulations of 49 C.F.R. Parts 567 and 568] require the incomplete vehicle manufacturers (companies such as Chrysler, Ford, and General Motors) to certify the compliance of their incomplete vehicles, and require the final-stage manufacturers to certify the compliance of the components they mount on the vehicle and the effect of the mounting, and thus obtain effective certificati on of the completed vehicle without imposing unreasonable burdens on either incomplete or final-stage manufacturers." 53 Fed. Reg. 60226. (Emphasis added.)

NHTSA mistakenly concludes that small businesses completing vehicles need not certify to Safety Standards that include dynamic testing requirements. This conclusion is based in part on NHTSA's incorrect belief that the incomplete vehicle manufacturer is required to certify compliance with FMVSS 204 and 208 in all cases, and that the final- stage manufacturer need not certify to these Safety Standards if vehicles are completed within the limits established in the incomplete vehicle document. This co nclusion is contrary to the plain language of NHTSA's own regulations.

The small businesses that complete commercial and vocational vehicles on chassis other than a chassis-cab, (i.e., chassis without an enclosed cab compartment, including cut-aways, chassis cowls and stripped chassis) are required to certify the complia nce of the completed vehicle to all applicable Safety Standards, including those which require dynamic testing. 49 C.F.R. 567; See, also, letter from Erika Jones, NHTSA Chief Counsel, to Tak Fujitani, Project Manager, Inspection Services, Office of Flee t Administration, State of California (Aug. 6, 1987). Accordingly, final-stage manufacturers cannot escape the certification obligation when completing vehicles on these types of chassis. Final-stage manufacturers cannot, as NHTSA suggests, merely "pass through" the incomplete vehicle manufacturer's certification for non-chassis-cab incomplete vehicles because none exists. As the NHTSA Chief Counsel has pointed out, "the [incomplete vehicle] document is not a certification." Id. Incomplete vehicle ma nufacturers need only certify incomplete vehicles that are chassis-cabs (See 49 C.F.R. 567 and 568.), and provide an incomplete vehicle document for all incomplete vehicles, which "document is not a certification."

Thus, NHTSA's suggestion that small businesses involved in the production of trucks can avoid certifying to Safety Standards that include prohibitively costly, crash testing and/or engineering analyses (such as required by FMVSS 204 and 208) by comple ting vehicles within the parameters of the incomplete vehicle document is simply not correct for a substantial population of commercial and work-related vehicles.

2. NHTSA Operates Under a Clear Misunderstanding of the Truck Body and Equipment Industry

In its denials of the NTEA's petitions for reconsideration, NHTSA states: "When a final-stage manufacturer is unable to complete the vehicle within the specifications established by the incomplete vehicle manufacturer, the final-stage manufacturer can build the vehicle on a heavier chassis, and remain within the limits specified for that heavier chassis. Again, the final-stage manufacturer would not have to conduct any dynamic testing or engineering analyses prior to certifying that the vehicle compl ies with the safety standards." (53 Fed. Reg. 50225 and 54 Fed. Reg. 24348). NHTSA further states that "[i]t is also possible that the switch to a higher rated chassis would result in the completed vehicle not being subject to the dynamic testing require ments . . . (54 Fed. Reg. 24346-24347)."

NHTSA's statement that small businesses can avoid certifying to Safety Standards that include dynamic testing requirements by building on a heavier chassis demonstrates that NHTSA does not understand how commercial and vocational vehicles (i.e., all l ight trucks other than unmodified pickups and vans) are produced. In virtually all cases, the customer and the chassis dealer, without input from the final-stage manufacturer, select the chassis to be used for the work-related vehicle and the specificat ions for the completion of the vehicle. With respect to the sale of new commercial and vocational vehicles, the final-stage manufacturer is typically a subcontractor to the dealer. The final-stage manufacturer does not have the option to change the cus tomer's vehicle specifications so as to avoid a certification obligation. NHTSA obviously does not fully appreciate the fact that commercial and vocational vehicles are custom ordered and built to buyer specifications in virtually all cases, and that the small businesses that complete such vehicles act almost exclusively as subcontractors. NHTSA's suggestion that building on a heavier chassis as an alternative to certifying compliance with Safety Standards has absolutely no basis in the reality of the marketplace.

Thus, as the foregoing demonstrates, both of the alternatives NHTSA offers to small businesses to avoid the dynamic testing obligation -- completing vehicles within the incomplete vehicle documentation specifications or building on a heavier chassis - - fail to provide adequate relief to the small businesses that complete commercial and vocational light trucks. In light of NHTSA's acknowledgement that intermediate-and final-stage manufacturers and vehicle alterers cannot, as a group, comply with dyna mic testing requirements, the absence of meaningful alternatives places these businesses in an untenable position. A safety standard that cannot be complied with is neither reasonable nor practicable.

Although this letter has focused only on two inadequacies in the rulemaking record of FMVSS 208 and 204, other significant flaws exist. These include, but are not limited to, NHTSA's failure to conduct any comprehensive study of the multi-stage manuf acturing truck industry and the work-related vehicles produced (other than NHTSA's apparent reliance on limited data submitted nearly a decade ago by a now defunct trade association) in the course of its rulemaking.

We trust that the issues raised in this letter demonstrates the validity of the truck equipment industry's concern over continued rulemaking that would extend passenger-car Safety Standards to all light trucks. We fear that such rulemaking will resul t in Safety Standards that are overly broad and arbitrarily reach commercial/vocational trucks.

The NTEA agrees with Senator Hollings that vehicles designed, marketed, manufactured and used primarily as passenger or family transportation vehicles should be subject to Safety Standards adopted for passenger cars regardless of whether the vehicles are commonly thought of as automobiles, light trucks, vans or sport-utility vehicles. However, vehicles designed, marketed, manufactured and used primarily for commercial, work-related, vocational or emergency purposes, and not for personal transportati on should not be regulated in the same manner as passenger-oriented cars or trucks. While the users of such commercial vehicles should be assured of their safety, in the absence of accident and fatality data suggesting that identical regulation is neces sary and appropriate, the Safety Standards that apply to passenger-oriented vehicles should not be applied arbitrarily to work-related trucks. Moreover, where it is determined that particular Safety Standards should apply to all passenger-oriented vehic les and work-related trucks, the dynamic testing requirements that are imposed and may be appropriate for single-stage, assembly-line produced cars and trucks cannot and should not be imposed on multi-stage produced trucks because of the nature of the mu lti-stage manufacturing truck industry. We believe that this view is consistent with the sentiments of the Senate and is consistent with the spirit of the National Traffic and Motor Vehicle Safety Act.

We recognize that you must make recommendations to the White House concerning the application of passenger car Safety Standards to light trucks, vans and sport utility vehicles. We urge you, however, to reexamine the previous two rulemaking proceedin gs and conduct a comprehensive study of the unique problems encountered by multi-stage manufacturers in certifying compliance with applicable Safety Standards before undertaking any of these new rulemaking initiatives.

Representatives from the NTEA would be happy to meet with you to provide more detail on the truck body and equipment industry and its concerns. Please feel free to contact me in Washington, D.C. at 628-2010.

Sincerely yours,