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positive determination of this question must rest upon three separate subsidiary findings, namely:

(a) Enough models of vehicles to meet the 1975 "basic demand" for cars must be certified prior to commencement of production;

(b) It must be feasible to mass produce these cars in sufficient quantity to meet that demand; and

(c) The emissions control systems on these cars must function acceptably in actual use by customers.

(a) Certification

The first question is whether technology has been developed to the point that manufacturers can meet requirements for certification of their 1975 models if tested by the 1975 standards. The certification procedures are based upon tests of prototype and preproduction vehicles. Therefore, examination of the probabilities for certification does not include consideration of any of the problems of mass production. What it does focus upon is the capability of a manufacturer to build a limited number of cars for each model line that it intends to sell which can meet the applicable standards. Since all of the test data is derived from cars which are in essence individually equipped prototypes, the test data bears directly upon this question. Because of the preliminary state of development a year ago, the question of certification was virtually the sole issue seriously discussed at the public hearings last spring.

The methodology used for analysis of test data submitted in these proceedings is discussed in greater detail below. My examination of the fundamental technical issue whether technology is adequate to make it feasible for auto manufacturers to meet the 1975 standards has included extensive analysis of test data utilizing this methodology. It has also included a review of the raw data to evaluate the significance that may properly be attached to test results without making adjustments as required by a system of methodology. It has also included a general review of the overall status of development as reflected in the evaluation of the NAS Report and testimony and other statements of persons having expertise in this field.

On the basis of my examination I find it extremely difficult to predict that enough models of vehicles to meet the 1975 "basic demand" for cars could be certified under the 1975 standards. I find that the 1975 standards can be met by technology utilizing a rotary engine, a stratified charge engine or a light-duty diesel engine. It is clear, however, that a shift over to such technology cannot be accomplished within time to meet more than a fraction of the 1975 basic demand. With respect to conventional internal combustion engines, I find that technology has developed to the point that many models (66 percent of sales) almost certainly would meet certification requirements under the 1975 standards. It is less certain that other models would be able to meet those requirements.

As indicated previously, the Court of Appeals in its decision has directed me to weigh the evidence and make my decision "by taking into account that the risk of an 'erroneous' denial of suspension outweigh(s) the risk of an 'erroneous' grant of suspension," Dec. p. 58. It cautioned me against holding the "safety valve" of suspension "too rigidly," Dec. p. 44, and advised me that these risk-balancing considerations, though they may seem to speak only to the "public interest test," must also be taken into account in determining whether technology is available, Dec. p. 47.

Weighing all of these considerations, I believe that presently available technology is probably effective to achieve compliance with the 1975 standards insofar as the certification requirements are concerned. However, I also believe that there is a significant risk that this deternination would prove to be erroneous and that manufacturers would not be able to successfully certify vehicles at the statutory levels in sufficient numbers to meet basic demand for 1975 cars, either in California or throughout the Nation. My decision requiring California cars to meet slightly less stringent standards minimizes these risks without any significant adverse effect on air quality in California and assures that a full line of 1975 cars with catalysts will be certified for California. I believe this decision is in the public interest and is fully consistent with the Court's opinion.

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(b) Production

The second basic issue pertinent to my decision in this case is whether it is feasible to produce cars utilizing

the best available technology, which in the case of conventional internal combustion engines includes use of catalysts, on a mass production basis in sufficient quantity to meet the 1975 basic demand.

At least ten million automobiles are expected to be produced and sold in this country during the 1975 model year. If Federal emissions standards in that year require the use of catalysts on all conventional engines, somewhat more than ten million catalysts will have to be produced and the automobile assembly lines will have to be adapted to provide for catalyst installation.

At present neither the auto industry nor the catalyst industry has any significant experience with the mass production or handling of the type of catalysts that will be required. Furthermore, the evidence before me indicates that the auto industry has drastically abbreviated many of its normal procedures in order to stand ready to put catalysts on all 1975 vehicles. Construction and tool-up commitments have been made while the final design of the component that will be produced in these facilities is still under development. The normal procedure of phasing in new technology across a portion of the model line, which allows major unforeseen problems to be discovered and dealt with, has been dropped. Even the normal shake-down time used to correct minor defects in new assembly lines has been greatly abbreviated.

cars.

The elimination of these procedures has allowed the industry to preserve capacity to put catalysts on all its 1975

By that I mean that the applicants have made all the necessary long-term commitments for plant construction, tool-up, release of designs, and the like, which have had to be made up to now, and have thus been able to adhere to a schedule which, if all went well, would allow sufficient numbers of catalysts to be produced and installed.

There remains, however, the possibility that all may not go well. The company which has laid the most stress on this point is General Motors.

In its opening statement, GM testified that it had drastically compressed "the normal procedures for procuring and testing machinery," and had pushed its manufacturing plans "in parallel with the development program." They added, "Since neither component development nor process development will have had the benefit of the usual testing procedure,

our experience tells us serious unforeseen production problems
are very probable." Tr. 24; see also Tr. 29.

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GM reiterated these points in subsequent testimony,
Tr. 129–30, 222-23, which included a detailed description of
the complexities of starting a new production line, Tr. 159-
62, 166-68. Although GM's main emphasis was quite frankly on
unknown problems that their business judgment told them were
to be anticipated, the witnesses presented both specific
examples of areas where problems might arise, Tr. 162, 171-72,
222-23, 2450-51, and a paper outlining instances where this
had happened in the past, Tr. 2395-98, 2429-30, 2453-54.

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Ford also made these points. F. App. pp. 4-50,
4-53, 4-62, Tr. 284, 2195-96. However, they laid relatively
more stress on problems in producing the catalysts themselves. */
P. App. pp. 4-28-32; Tr. 263-65. Ford claims that "failure
mode analysis" which it has carried out on the catalyst pro-
duction process shows there are two to three times as many
ways for that process to fail as is the case for other new
components. Tr. p. 265; see F. App. pp. 4-29-30.

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American Motors also raised the possibility of production difficulties. Tr, 2367-68.

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If the only statements forecasting such problems came from auto manufacturers, I might well discount that testimony, for the applicants for extensions have an obvious interest in painting a dark picture of what will happen if catalysts are required nationwide 15 months from now.

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One manufacturer of catalyst components, however,
echoed these fears in the strongest terms. Tr. 1544-48,
1552-53, 1558, 1565-66 (Walker Manufacturing Company). Another
testified less emphatically, but to the same effect. Tr. 1421-
22, 1429-30, (W. R. Grace & Co.). The remaining four manu-
facturers were more optimistic about their own capacities, but
none disputed the auto companies' statement that there might
well be problems with the process as a whole. Tr. 14 49, 1462
(American Lava Corporation) ; 1507-1510 (Corning Glass Works);
918-19 (Engelhard Industries); 1312 (Matthey-Bishop, Inc.);

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This may be because the task of quality control is more
difficult for a monolithic catalyst (which Ford proposes
to use) than for the pebble catalyst GM has chosen. Tr. 1396-97.

1381-82, 1390-92, 1396 (Universal Oil Products Company). Since it was against the financial interest of the catalyst companies to give testimony that might lead to delaying the nationwide use of catalysts by a year, this evidence has had weight with me.

I have also noted that the desirability of a gradual phase-in of new production facilities was endorsed by the State of California, Tr. 2729, and the machine tool industry, Tr. 1964, 1973, 1976-79, 2011-12.

I find that it is feasible to mass produce catalyst-equipped cars in 1975 but that the use of catalysts on all cars sold in this country in 1975 would entail a significant risk of economic dislocation arising from the inability to acquire a supply of acceptable catalysts, problems on the assembly-line, or both. These risks could materialize abruptly, and force the unplanned cessation of production, with attendant layoffs of employees and possibly serious disruption of the national economy. While these risks cannot be quantified, I believe, as did the Court of Appeals, that they must be considered to outweigh the slight gain in air quality that might result from requiring catalysts on all 1975 cars. This conclusion is fully consistent with the overall objectives of the Act, and it is the decisive consideration underlying my decision to phase-in catalysts technology, rather than to require its use on all automobiles in 1975.

(c) Warranty and Recall

For reasons already stated, I believe that catalytic converters will reduce automobile emissions in actual use and may well constitute a more efficient means of controlling pollution from conventional automobiles than engine modification even when the catalyst operates at a fraction of its potential. I do not believe that catalyst failure in use will occur to such an extent as to subject manufacturers to extraordinary warranty or recall liabilities.

Manufacturers can protect themselves from liabilities in various ways. As my earlier decision points out,

"There is no question but that some systems
will fail. This does not necessarily mean
that repairs will be required at the manu-

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