Strapped Automaker Appeals NHTSA Rule on Air Bags

[PARAGON]

<Table><FONT size=+2>Strapped Automaker Appeals NHTSA Rule on Air Bags</FONT>




<FONT size=-1>By Cindy Skrzycki

Tuesday, February 22, 2005; Page E01
</FONT>


<NITF>


The National Highway Traffic Safety Administration isn't usually in
the business of letting companies off the hook on federal safety requirements --
or paying attention to affairs of state. But a fledgling car company has asked
the agency to do both, pleading for regulatory leniency on the grounds of
economic hardship, both for the company and for the country of Romania.</P>


Cross Lander USA wants to make and sell vehicles in the rugged
sport-utility class of the Hummer H1 for the U.S. market. It has asked NHTSA to
exempt it for three years from a federal requirement to provide air bags on the
driver and passenger sides of the Cross Lander 244X.</P>


The Miami-based automaker plans to build a modified version of ARO's
multipurpose vehicle, which the Romanian national company has built since
1957 to supply armies in Africa, Europe and the Far East. ARO also made custom
cars for former Romanian dictator Nicolae Ceausescu and his wife, Elena.</P>


Cross Lander completed the purchase of the ARO factory in Campulung, Romania,
in 2004 for $27 million. It plans to build 10,000 vehicles when it is retooled.
It expects to export 6,000 of the four-wheel-drive vehicles to the United States
at a base price of about $20,000 and says it has lined up 150 U.S. dealerships
to carry them. In 2004, the factory turned out 1,000 vehicles for markets other
than the United States. </P>


The company said it cannot stay afloat without mercy from the regulators.</P>


The hitch came when the engines Cross Lander was able to purchase for its
U.S.-bound-vehicles turned out to be lighter than expected, dropping the 244X
into a weight class that requires air bags. (The Hummer H1, for example, does
not have to have air bags because it weighs more than 5,500 pounds unloaded. Two
models of smaller Hummers must.) Cross Lander said it didn't have enough cash to
pay for the $2 million to $3 million design and installation of air bags. So it
asked regulators to let it sell the vehicle in the United States without air
bags so it can raise enough money to pay for them.</P>


"Cross Lander has negotiated with an airbag manufacturer for the design and
testing of an airbag system; however, the economic viability of this company
will not allow for the immediate completion of the air bag development program
without some sales in the U.S.," said the company's petition to NHTSA, which
became public Feb. 9.</P>


If an exemption is granted, the SUVs would have to be permanently labeled
that they are not equipped with air bags. </P>


In a supplemental filing with NHTSA in late January, the company said it must
sell some vehicles in the United States by the end of this year. Cross Lander
estimates a net loss of $108,000 in 2005 if an exemption is granted. If not, the
loss would balloon to $8.5 million by next year. It does not foresee having air
bags in the model until 2008.</P>


Cross Lander also pleaded with NHTSA regulators to consider how important
their decision will be to Romania, where the company said it employs 1,200
people. "Granting this petition will, at the minimum, speed the recovery of
their economy by 18 months," the petition said. "This will have an extremely
important impact on the Romanian people."</P>


Federal regulations provide four classes of exemptions to automakers. One of
them is for small manufacturers pleading economic hardship that turn out fewer
than 10,000 vehicles a year.</P>


Since 1974, NHTSA has received 175 petitions for exemptions to various
standards. It granted 152 and turned down 20. Two were closed for other
reasons.</P>


"The review consists of looking at their financial situation and looking at
the pickle they are in," said Stephen R. Kratzke, NHTSA's associate
administrator for rulemaking. Companies must also demonstrate that they tried to
comply with the rule.</P>


Kratzke said many of the companies that have won exemptions make highly
specialized, low-volume vehicles such as stylized sports cars, race cars and
vintage replicas.</P>


For example, the agency in January 2004 told Saleen Inc. of
Irvine, Calif., which makes limited-edition sports cars that cost $400,000 each,
that it had approved an air-bag exemption based on financial hardship. It also
gave British Coach Works Ltd. in Arnold, Pa., a temporary pass in 1985 on
air bags after it agreed that the company was in an economically depressed part
of the country. The company said it would be able to hire 10 more workers if it
could stay in business.</P>


Ferrari, however, got a thumbs down in 1990 when NHTSA refused an
air-bag exemption request. The agency said the company was in sound financial
condition and demand for its products was high.</P>


Cross Lander, while stressing that it is in economic jeopardy, also said the
vehicle would be used by hunters, farmers and land surveyors and for
"off-roading." In other words, it won't be used as a primary vehicle in traffic.
</P>


The petition pointed out that the Cross Lander 244X is a "Spartan utility
vehicle" not likely to appeal to soccer moms or even those who buy the
amenity-laden Hummer. </P>


Safety advocates, however, don't buy the argument.</P>


"What this comes down to is trading the lives of American motorists for the
Romanian economy. That's not a good deal," said Clarence Ditlow, director
of the Center for Auto Safety. "If any petition should be turned down pro
forma, it should be this one."</P>


Ditlow said most SUVs barely get a glimpse of the off-road but are driven on
highways and city and suburban streets.</P>


Most consumers consider air bags a primary safety feature, not an option. Air
bags, according to numbers compiled by NHTSA, saved 14,227 lives between 1987
and 2003.</P>


Kratzke said nothing has been decided but, in general, Congress intended that
exemptions were appropriate for small companies that mean to meet safety
standards but need more time. </P>


"These are very small companies. This isn't Toyota," he said.</P></Table>

[PARAGON]

<Table><FONT size=+2>Strapped Automaker Appeals NHTSA Rule on Air Bags</FONT>




<FONT size=-1>By Cindy Skrzycki

Tuesday, February 22, 2005; Page E01
</FONT>


<NITF>


The National Highway Traffic Safety Administration isn't usually in
the business of letting companies off the hook on federal safety requirements --
or paying attention to affairs of state. But a fledgling car company has asked
the agency to do both, pleading for regulatory leniency on the grounds of
economic hardship, both for the company and for the country of Romania.</P>


Cross Lander USA wants to make and sell vehicles in the rugged
sport-utility class of the Hummer H1 for the U.S. market. It has asked NHTSA to
exempt it for three years from a federal requirement to provide air bags on the
driver and passenger sides of the Cross Lander 244X.</P>


The Miami-based automaker plans to build a modified version of ARO's
multipurpose vehicle, which the Romanian national company has built since
1957 to supply armies in Africa, Europe and the Far East. ARO also made custom
cars for former Romanian dictator Nicolae Ceausescu and his wife, Elena.</P>


Cross Lander completed the purchase of the ARO factory in Campulung, Romania,
in 2004 for $27 million. It plans to build 10,000 vehicles when it is retooled.
It expects to export 6,000 of the four-wheel-drive vehicles to the United States
at a base price of about $20,000 and says it has lined up 150 U.S. dealerships
to carry them. In 2004, the factory turned out 1,000 vehicles for markets other
than the United States. </P>


The company said it cannot stay afloat without mercy from the regulators.</P>


The hitch came when the engines Cross Lander was able to purchase for its
U.S.-bound-vehicles turned out to be lighter than expected, dropping the 244X
into a weight class that requires air bags. (The Hummer H1, for example, does
not have to have air bags because it weighs more than 5,500 pounds unloaded. Two
models of smaller Hummers must.) Cross Lander said it didn't have enough cash to
pay for the $2 million to $3 million design and installation of air bags. So it
asked regulators to let it sell the vehicle in the United States without air
bags so it can raise enough money to pay for them.</P>


"Cross Lander has negotiated with an airbag manufacturer for the design and
testing of an airbag system; however, the economic viability of this company
will not allow for the immediate completion of the air bag development program
without some sales in the U.S.," said the company's petition to NHTSA, which
became public Feb. 9.</P>


If an exemption is granted, the SUVs would have to be permanently labeled
that they are not equipped with air bags. </P>


In a supplemental filing with NHTSA in late January, the company said it must
sell some vehicles in the United States by the end of this year. Cross Lander
estimates a net loss of $108,000 in 2005 if an exemption is granted. If not, the
loss would balloon to $8.5 million by next year. It does not foresee having air
bags in the model until 2008.</P>


Cross Lander also pleaded with NHTSA regulators to consider how important
their decision will be to Romania, where the company said it employs 1,200
people. "Granting this petition will, at the minimum, speed the recovery of
their economy by 18 months," the petition said. "This will have an extremely
important impact on the Romanian people."</P>


Federal regulations provide four classes of exemptions to automakers. One of
them is for small manufacturers pleading economic hardship that turn out fewer
than 10,000 vehicles a year.</P>


Since 1974, NHTSA has received 175 petitions for exemptions to various
standards. It granted 152 and turned down 20. Two were closed for other
reasons.</P>


"The review consists of looking at their financial situation and looking at
the pickle they are in," said Stephen R. Kratzke, NHTSA's associate
administrator for rulemaking. Companies must also demonstrate that they tried to
comply with the rule.</P>


Kratzke said many of the companies that have won exemptions make highly
specialized, low-volume vehicles such as stylized sports cars, race cars and
vintage replicas.</P>


For example, the agency in January 2004 told Saleen Inc. of
Irvine, Calif., which makes limited-edition sports cars that cost $400,000 each,
that it had approved an air-bag exemption based on financial hardship. It also
gave British Coach Works Ltd. in Arnold, Pa., a temporary pass in 1985 on
air bags after it agreed that the company was in an economically depressed part
of the country. The company said it would be able to hire 10 more workers if it
could stay in business.</P>


Ferrari, however, got a thumbs down in 1990 when NHTSA refused an
air-bag exemption request. The agency said the company was in sound financial
condition and demand for its products was high.</P>


Cross Lander, while stressing that it is in economic jeopardy, also said the
vehicle would be used by hunters, farmers and land surveyors and for
"off-roading." In other words, it won't be used as a primary vehicle in traffic.
</P>


The petition pointed out that the Cross Lander 244X is a "Spartan utility
vehicle" not likely to appeal to soccer moms or even those who buy the
amenity-laden Hummer. </P>


Safety advocates, however, don't buy the argument.</P>


"What this comes down to is trading the lives of American motorists for the
Romanian economy. That's not a good deal," said Clarence Ditlow, director
of the Center for Auto Safety. "If any petition should be turned down pro
forma, it should be this one."</P>


Ditlow said most SUVs barely get a glimpse of the off-road but are driven on
highways and city and suburban streets.</P>


Most consumers consider air bags a primary safety feature, not an option. Air
bags, according to numbers compiled by NHTSA, saved 14,227 lives between 1987
and 2003.</P>


Kratzke said nothing has been decided but, in general, Congress intended that
exemptions were appropriate for small companies that mean to meet safety
standards but need more time. </P>


"These are very small companies. This isn't Toyota," he said.</P></Table>

[DRTYFN]

Nice! Too poor for airbags? I wonder what else they'll be scrimping on? Seatbelts? Brakes? Engine components?

[RIC-H0]

I'd still buy one if it didn't have air bags!
Hell, my 1st 5 cars didn't have airbags!

Ric-H2

[Happy Hummer]

My 02 H1 doesn't have airbags and I drive that almost everyday...

[PhillyPhreak]

Has anyone seen one of these??? They are neat looking....reminds me af a landrover discovery. I wonder what build quality will be like?

[visionmotorsport]

http://www.chapmancrosslander.com/crosslander_specs.asp

[Happy Hummer]

That looks like a old Toyota Land Cruiser.