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: Possibly Another Takata Death
A woman filed a lawsuit in Louisiana district court on Monday against Honda and Takata, alleging that her daughter died in April from injuries related to a shrapnel-spewing Takata airbag. The suit says Kylan Rae Langlinais drove her 2005 Honda Civic into a utility pole. Her fatal injuries seemed unusual for a car crash. Via The Advocate:
Kenneth St. Pé, one of two attorneys for the Langlinais family, said Tuesday the death was made doubly tragic when the recall notice for the Takata Corporation air bag system arrived in Langlinais’ mailbox two days after the crash, while she was lying in a hospital bed. She died two days after getting the notice.
St. Pé said the only serious injury that doctors who examined Langlinais could find was a severed carotid artery. That injury was consistent with other victims whose Takata air bags exploded and sent bits of metal flying, he said.
Sad. If true, Langlinais is the seventh known death worldwide related to Takata airbags.
2nd Gear: U.S. Considers Wire Fraud Charges Against GM:
The aftermath of the General Motors ignition switch debacle continues as federal prosecutors consider whether to charge the company with wire fraud. They did the same thing to Toyota years ago, accusing that automaker of “defrauding customers by making misleading statements about its cars’ safety after complaints of unintended acceleration.”
Toyota infamously paid $1.2 billion to settle that case, so this could smart for GM if it proceeds. From The Wall Street Journal:
The U.S. Justice Department is weighing charging General Motors Co. with criminal wire fraud stemming from the auto maker’s failure to recall millions of vehicles equipped with a defective ignition switch, said people familiar with the matter.
Federal prosecutors in New York are focusing on the charge after determining GM likely made misleading statements and concealed information about the faulty switch, now linked to more than 100 deaths, the people said. They are hoping to reach a settlement with the company by the end of summer or early fall, though the timing could slip, they said.
3rd Gear: GM’s Annual Meeting Is Short, Sweet And Sparsely Attended
You’d think that with everything going on with GM these days, from their aggressive growth plans to activist investor shenanigans to the ongoing ignition switch thing, that its annual shareholder meeting would be a huge deal with lots of contention. Not so.
One more from The Wall Street Journal: a report yesterday’s meeting attended by about three dozen people that lasted “about as long as an episode of cable channel AMC’s Better Call Saul.” The chairman who ran the meeting rushed things along and seemed to ignore investors who offered proposals. There’s also this gem:
One of the highlights of the meeting at GM, once a benchmark for textbook corporate governance, was the short and unwieldy presentation by a Michigan man calling himself “Ronnie O.” He wants GM to broaden its portfolio of car colors, suggesting the shade of neon yellow shirt that he was wearing would appeal to moms as a car color.
After the meeting, Mr. Osiol, who shortened his last name to just O because it was “easier that way,” said he decided not to wear his clown face paint because it was his first such meeting and “I am new to the family.” He bought shares in GM for his three-year-old nephew, but didn’t bring the boy because “he would have been a distraction.”
Good call. There’s a time and a place for clowns, and that time and place is never.
4th Gear: GM, Fiat Chrysler Labor Chiefs Abruptly Leave
Speaking of GM, they and Fiat Chrysler are set to begin their contract negotiations with the United Auto Workers next month — including over the controversial two-tier wage structure — but top labor negotiators for both automakers have abruptly retired recently. Via The Detroit News:
Fiat Chrysler on Tuesday said its North American labor relations chief, Alphons Iacobelli, 55, elected to retire, effective immediately. GM on Tuesday also confirmed to The Detroit News that its top bargainer, Rex Blackwell, 60, quietly retired June 1.
[...] Industry experts speculate the unprecedented timing of the retirements of Iacobelli and Blackwell could be a sign of just how difficult the upcoming negotiations are going to be. This is the first contract since GM and Chrysler emerged from post-bankruptcy government restrictions; automakers are reporting record profits; and union leaders have made it clear they want to share in the wealth, after givebacks during the 2008-09 economic downturn. GM and Chrysler workers were prohibited from striking when the current contract was negotiated in 2011, but that restriction — required as a condition of their government bailout — has expired.
Or something else is about to go down related to their quick departure. We’ll have to keep an eye on this one.
5th Gear: Can The Tesla Model S Go Vegan?
Wealthy environmentally-minded people love their Tesla Model S-es, but what about the animal lovers? Two Tesla shareholders want it to be the first “cruelty-free” luxury car. Via Bloomberg:
At the company’s annual meeting on Tuesday, Mark and Elizabeth Peters, shareholders from Hurst, Texas, urged Tesla to eliminate the use of animal-sourced materials for interior components, such as leather seats. One of their proposals would reduce the use of such products and eliminate them entirely by 2019.
Interestingly, it seems that unlike most luxury competitors, Tesla doesn’t offer any kind of fake leather for their cars. At any rate, Tesla’s board of directors recommended a vote against the proposals, saying it might delay more important endeavors. Sorry, cows.
Reverse: Paul Newman Was So Awesome
Paul Newman, the blue-eyed movie star-turned-race car driver, accomplishes the greatest feat of his racing career on this day in 1979, roaring into second place in the 47th 24 Hours of Le Mans, the famous endurance race held annually in Le Mans, France.
Neutral: What Should Happen To GM?
Should they face wire fraud charges like Toyota, or is that totally out of line?
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