the best available technology, which in the case of conventionalinternal 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.

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

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. 15962, 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.

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.*/ 7. App. pp. 4-28-32; Tr. 263-65. Ford claims that "failure mode analysis" which it has carried out on the catalyst production 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.

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

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.

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. 142122, 1429-30, (W. R. Grace & Co.). The remaining four manufacturers 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. 1449, 1462 (American Lava Corporation); 1507-1510 (Corning Glass Works); 918-19 (Engelhard Industries); 1312 (Matthey-Bishop, Inc.);

* 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

facturer's expense, for the performance
warranty and recall provisions are con-
ditioned on proper use and maintenance
by the owner. In the case of recall, a
'substantial number' of a class or cate-
gory of vehicles must be found to exceed
applicable standards. Where a manufac-
turer is required to pay for necessary
repairs, the data indicates that relatively
simple adjustments to air and fuel inputs
to the engine or exhaust treatment compo-
nents may be effective in many cases to
remedy nonconformity with the standards."
(May Dec. p. 12)

Manufacturers of catalyst-equipped vehicles should,

of course, instruct purchasers not to use leaded fuel. Reduced catalyst efficiency caused by lead "poisoning" will therefore result from violation of the manufacturer's instructions for maintenance and operation of the vehicle and will not subject manufacturers to liability under the Act's warranty or recall provisions.

My earlier decision also points out that

"It is the manufacturer's obligation to
design the vehicle so that operations which
may impair emission control are difficult
to perform where this is possible, and to
caution purchasers against using vehicles
in ways or for purposes that can be expect-
ed to cause failure of the emission con-
trol system. Wherever possible, systems
should be built into the vehicle which warn
the operator of component failure or
impending failure." (Id. fn.)

Catalyst failures caused by continued operation of a vehicle after a warning signal is given to the driver or by operations likely to cause catalyst failure would not result in liability if reasonable and necessary instructions by the manufacturer clearly proscribe such operations.

In addition, the evidence indicates that catalysts retain a substantial conversion efficiency even after severe thermal or mechanical stress. For example, data submitted

indicates that in some cases catalysts which had melted as a result of severe thermal stress continued to oxidize more than 70 percent of the hydrocarbon and more than 90 percent of t carbon monoxide emissions from the engine. In other cases, visibly broken or extruded catalysts evidence a similar effectiveness. In such cases, emissions from the vehicle may exceed the certification standard but would not necessarily cause the vehicle to fail an appropriate in-use test. Finally, my decision requiring limited introduction of catalysts during the 1975 model year should permit manufacturers to exercise a high degree of quality control over catalytic units produced in that year. While deficiencies may occur during initial production, the limited scale of 1975 catalyst production should permit manufacturers to correct these deficiencies without undue hardship. The experience gained will, in my judgment, further minimize inuse failures in subsequent production years.

The most germane and relevant information for determining what lies within the technological reach of each manufacturer would be "raw" test data on the most effective emission control systems, generated according to the strict procedures of the certification "durability" test procedures. It is understandable, however, that the development programs of manufacturers vary from this ideal in two respects: they have investigated some components and systems which proved not to be as successful as others; and they have accumulated

*/ It is inevitable that some production vehicles will exceed the certification standard during their useful life even where the vehicle is in all material respects of substantially the same construction as the successfully certified prototype. For this reason, I do not believe that the Act requires that the certification standard govern warranty and recall. If that were so, manufacturers would be required to repair vehicles which differ from the certification prototype only in manufacturing tolerances essential to a mass production system. These vehicles would on the average reflect the same degree of emission reduction as the successfully certified prototype and would, in most cases, have no repairable defect.