Tesla wants the U.S. to raise penalties for automakers who don’t comply with fuel economy requirements, a man got a job, and Volvo is just about done with leather. All that and more in The Morning Shift for September 23, 2021.
1st Gear: Tesla Wants Other Automakers To Feel The Pain For Not Meeting Fuel Economy Rules
This is not entirely altruistic — Tesla is a corporation, who is it kidding — but Reuters reports that Tesla is pushing the Biden administration to raise penalties on non-compliant automakers, in large part because the regulatory credits that Tesla sells to automakers like Stellantis are being devalued.
Tesla Inc. is pressing President Joe Biden’s administration and a U.S. appeals court to move quickly to hike civil penalties for automakers failing to meet fuel economy requirements.
Tesla, which produces only electric vehicles, sells credits to other automakers to help them meet government vehicle emissions requirements, and says those credits are less valuable due to changes in rules made by former President Donald Trump’s administration.
Tesla met virtually on Aug. 30 with officials from the National Highway Traffic Safety Administration, according to a document filed by the agency last week.
[…]
The government memo said Tesla suggested NHTSA withdraw Trump’s action immediately, saying it “produces continuing uncertainty in investments and transactions across the industry, and any delays will continue to have deleterious effects on the credit market until the issue is resolved.” It added Tesla believes “any delays will continue to have deleterious effects on the credit market.”
Tesla on Aug. 27 separately again asked the Second Circuit U.S. Court of Appeals to quickly reinstate higher penalties. The court rejected Tesla’s request in April for immediate action pending NHTSA’s review.
“The uncertainty perpetuated by NHTSA’s sluggish rulemaking pace is thus compounded by the likelihood of yet another round of litigation,” Tesla wrote, warning uncertainty “may linger for several more years.”
This is a case of Tesla being both selfish and correct. Regulatory pressure is the only thing that really moves automakers, as we’ve seen in Europe.
2nd Gear: Meanwhile, Automakers Might Lose $210 Billion Because Of The Chip Shortage And Other Supply Chain Issues
Pour one out for the automakers, who are still hugely profitable.
From Reuters:
Global automakers could lose $210 billion in revenue this year because of supply chain disruptions, nearly double a forecast earlier this year, consulting firm Alixpartners said Thursday.
A shortage of semiconductors is just part of the problem, Alixpartners said in a new forecast. High prices and tight supplies of commodities such as steel and plastic resin are driving up costs and forcing automakers to curtail production.
Automakers are on track to lose production of 7.7 million vehicles in 2021, according to the new forecast. Alixpartners advises automakers on supply chain and other issues.
In May, the firm predicted automakers would lose $110 billion in revenue and fall 3.9 million vehicles short of production plans for the year.
The dour new forecast comes amid warnings from automakers and commercial truck manufacturers that semiconductor shortages and commodity price spikes are not easing as 2021 heads into its final months, as industry executives had hoped they would.
3rd Gear: Man Gets Job
David Strickland used to be the administrator of the National Highway Traffic Safety Administration during the Obama administration. Now he’s been hired at GM to be its head of global regulatory affairs.
From the Detroit Free Press:
“David has an extensive background working on a wide variety of transportation and auto industry policy issues,” [Omar Vargas, GM vice president and head of Global Public Policy] said in a statement. “His knowledge of the issues and ability to work collaboratively with government and industry make him the perfect leader to help drive regulatory policies in support of GM’s growth initiatives, including our vision for an all-electric and autonomous future.”
GM has said it will bring 30 new EVs to market by mid-decade with a vision to offer an all-electric light-duty lineup of vehicles by 2035.
Strickland replaces Bob Babik, who will retire Jan. 1 after 20 years with the automaker.
Strickland, who has worked in the government affairs and regulatory area for 25 years, will lead GM’s team that works with regulatory agencies at the local, state, national and international levels, GM said.
After you become the head of a government agency, you reach a sort of tenure and multinational corporations are very excited to employ you.
4th Gear: Volvo Is Going Leather-Free
Or so Volvo has told Bloomberg, “during a private video interview announcing these changes.” Congratulations to Volvo and also to Bloomberg, for securing a “private video interview.”
The shift at Volvo will begin next year with the C40 Recharge, a plug-in electric SUV with a 200-plus mile driving range. It will continue until 2030, when Volvo’s by then all-electric lineup will have entirely phased out leather products. This is a decision driven as much by reading and predicting market trends as from concern for the ethical treatment of animals, Volvo executives tell Bloomberg Pursuits during a private video interview announcing these changes.
“We see our customer’s expectations are changing,” says Robin Page, the head of design for Volvo Cars. “They are changing their habits in fashion and products they are buying. They want to know more about the materials and where they are sourced from and where they come from, and people are much more aware of climate change and the effects on the planet.”
[…]
Volvo will introduce a new wool-blend option, made from certified suppliers, as the company looks to ensure full traceability and animal welfare in its materials supply chain. It will also offer Microtech, a suede-like textile made from recycled polyester, as well as components made from sustainably sourced flax and linen.
“There are premium alternatives to leather,” Page says.
Page is a more delightful fellow than these quotes suggest; get a drink with him sometime if you ever get the chance.
5th Gear: There Were Some ‘Improper Expenditures’ At The UAW, You Don’t Say
The UAW is a caricature of a bad, corrupt union at this point. The latest from The Detroit News has the UAW congratulating itself for finding $2 million in improper spending all by itself, and not because federal prosecutors went snooping.
The United Auto Workers is hailing its new auditing guidelines as a “deterrent” to corruption after its auditors discovered more than $2 million in improper expenditures of union dues at Local 412 in Warren, whose members include Stellantis NV workers.
The Local 412 financial secretary has been suspended, the UAW confirmed. The union’s findings have been sent to law enforcement authorities, including the U.S. Labor Department and Justice Department, Frank Stuglin, the UAW’s international secretary-treasurer, said in a statement. No criminal charges have been filed, UAW spokesman Brian Rothenberg said.
The international UAW based in Detroit implemented new monetary control measures amid a years-long federal investigation into corruption within the union that has resulted in the convictions of 15 people, including two former UAW presidents, and put it under an independent monitor. Stuglin championed the measures as an effective tool to clean up the union.
“We have taken immediate action in this matter,” Stuglin said. “We have put together a very enhanced auditing system and while we are outraged that dues were embezzled, we are encouraged that the UAW auditors themselves discovered and reported this misuse of union dues through our new auditing guidelines.
“We are confident that these new guidelines will identify any similar activity in our union and serve as a deterrent to prevent such activity in the future.”
I have also put together a “very enhanced auditing system” for myself, but despite these measures I still managed to buy White Castle yesterday, and am outraged that my money was embezzled.
Reverse: Oil
Neutral: How Are You?
I got a parking ticket this week, which I’m terribly embarrassed about, given that it’s my first one in years. I will not be providing forensic evidence in court in a futile effort to overturn it, as my dad frequently did. Nah, this was just a gamble that didn’t go my way.
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