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Abstract: On October 23, 1981, National Highway Traffic Safety Administration (NHTSA) head Raymond A. Peck, Jr. announced his decision to rescind those sections of Federal Motor Vehicle Safety Standard (FMVSS) 208 which would have required passive restraints--airbags or passive belts--in all passenger cars sold in the United States after September 1, 1983. One of the most symbolic and hotly contested of regulatory issues, passive restraints had for years been actively opposed by the auto industry and actively promoted by consumer groups and the insurance industry. This case provides the regulatory history of FMVSS 208 and covers in detail the formal analytic process that Peck and his career staff followed to reevaluate the standard. An eight-page sequel covers Peck's decision to rescind and subsequent rulings by the courts that the decision was "arbitrary and capricious." This case has been taught to illuminate the special problems inherent in regulatory issues for which any solutions take several years or more to carry out, and to illustrate the technical aspects of formal regulatory rulemaking. The case can illustrate the strategic importance of how a manager defines a problem and can also support a discussion of the value judgments that are inherent in seemingly technical decisions. For a different treatment of this material, see Rescission of the Passive Restraints Standard: Costs and Benefits (C16-83-562.0).