Good Morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: A Mess With The IRS
Volkswagen’s diesel scandal going global is the news out of the car world this morning, but I’ll do my best to find some other stories today.
First, Jerry Hirsch at the Los Angeles Times has a good angle on this mess that I kind of wish I had thought of yesterday. Remember when the TDI “clean” diesels got tax incentives back in 2009? Those totaled about $51 million.
Well, now we know that was based on false pretenses too:
The Times analysis matched Internal Revenue Service data with Volkswagen sales figures to determine the value of subsidies VW diesel buyers were eligible to collect in 2009, the first and only year the vehicles qualified. The $1,300 tax credit would have been available to buyers of about 39,500 Jetta and Jetta Sportwagen models that sold that year, according to Motor Intelligence, an industry research firm.
“It is really unfortunate,” said Luke Tonachel, director of clean vehicles and fuels project at the Natural Resources Defense Council. “The government has been effective to help advance clean technologies, but it is a waste of taxpayer dollars when they aren’t actually helping to clean the environment.”
He said regulators should factor in the $51 million in subsidies when determining penalties for Volkswagen’s Clean Air Act violations.
Granted, VW has global problems as of this morning, but if they think they have headaches in America with the EPA, just wait until the IRS comes after them.
2nd Gear: Mercedes And BMW Say They’re Good
For now, VW seems alone in this emissions cheating scandal, but I’d hardly be shocked if they were. In the meantime rivals BMW and Mercedes told Automotive News Europe they were in compliance with the rules. Here’s what BMW said:
A BMW spokesman said: “There are clear laws and guidelines governing this and we adhere to them. Everything else is manipulation and deception and we don’t commit such fraud.”
3rd Gear: This Happened To GM Once Too
Volkswagen’s emissions cheating scandal is huge, but hardly unprecedented, as we pointed out yesterday in our heavy trucking story. But other carmakers have paid the price for doing this too, in particular Cadillac in the 1990s with their 4.9-liter engines. Via The Detroit News:
But the biggest cases to date involved General Motors — and in another case, seven manufacturers of heavy-duty diesel engines. Both cases came to light two decades ago.
In 1995, the EPA and Justice Department slapped GM with an $11 million fine for installing “defeat devices” on 470,000 1991-95 Cadillac Sevilles and Devilles that overrode pollution controls. That resulted in carbon monoxide emissions of up to three times the legal limit.
At the time, it was the largest ever case brought under the Clean Air Act and it was the first judicial auto recall aimed at curbing damage to the environment. In total, GM agreed to spend $45 million to settle government charges that it put illegal devices in the Cadillacs: Besides the $11 million fine, it spent more than $25 million to recall and retrofit the polluting vehicles; it spent another $8.75 million on projects to offset emissions from the cars.
4th Gear: Subaru To Expand Indiana Plant
In another sign of Subaru’s explosive growth in the U.S., the Japanese automaker announced they will invest $140 million to expand their Indiana plant, which will boost production by 100,000 vehicles a year. Via the AP:
Company officials announced plans on Monday for its factory in Lafayette, where it builds the Subaru Outback SUVs and Legacy sedans. The plant is Subaru’s only assembly factory outside Japan.
Subaru of Indiana Automotive vice president Tom Easterday says the project will allow the factory to boost production to meet growing demand.
5th Gear: UAW Leaders Take Contract Proposal To Fiat Chrysler Workers
Next week, Fiat Chrysler’s unionized workers will vote on the new contract with their automakers. Here’s where they’re at. One more from The Detroit News:
United Auto Workers leadership is attempting to address questions and concerns of 40,000 union members with Fiat Chrysler Automobiles NV before they vote on a tentative four-year deal in the coming week.
Leaders, including UAW Vice President Norwood Jewell, started meeting with local chapters over the weekend to discuss the proposed contract, as local chapters schedule informational meetings.
Reverse: A Mad Motorist’s Dream
Neutral: Was VW Really Alone In Emissions Cheating?
I can’t wait to see how widespread this really is. Maybe VW is alone, but I find that a bit unlikely.
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