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: That Is Nicht Gut For Volkswagen
There are little things that can tell you that the proverbial scheisse is about to hit the fan. One of those is when you cheat on emissions and executives start resigning. A much bigger one is when everyone starts hiring criminal defense lawyers, as Bloomberg reports:
Dozens of Volkswagen Group executives in Germany have hired U.S. criminal defense lawyers as the Justice Department ramps up meetings with managers to gather evidence that may lead to charges, people familiar with the matter said.
And apparently things are getting down to the wire, as VW was hoping to have everything all wrapped up nice and neat with a bow before the Obama administration reached its natural end. As dire as that may seem for the VW executives, they do have one annoying ace up their sleeves – as Bloomberg notes, Germany’s constitution doesn’t allow the extradition of its citizens outside the European Union.
That’s now the end of it, however, as the U.S. can then start issuing Interpol red notices and effectively prohibit their travel outside Germany.
You may have thought Dieselgate was over, but it might just be the beginning.
2nd Gear: Hyundai Might Be In A Bit Of A Mess, Too
Executives at Hyundai Motor may be in some trouble as well, though probably not on the same scale as Volkswagen. There’s a massive scandal in South Korea going on at the moment involving President Park Geun-Hye, and it’s all a bit convoluted and complex but suffice it to say that a close confidant of President Park, Choi Soon-sil, is alleged to have exerted a Rasputin-like level of control over the President, and used her political influence for profit. One of those ways Choi is reported to have profited is by soliciting “donations” from the chaebol – or South Korea’s massive conglomerates, which tend to be family-controlled and deeply involved in politics.
One of those chaebol is Hyundai Motor, and now its chairman, Chung Mong-koo, is being hauled in for questioning before South Korea’s parliament, the Wall Street Journal says:
In South Korea, the practice of corporations funding government initiatives, and expecting positive treatment in return, has been deeply ingrained in politics for decades.
“There’s an implicit agreement between the corporations and the government—you scratch my back and I’ll scratch yours,” said Lee Ji-soo, a lawyer and a member of the main opposition party. “They understand that such a donation is insurance, for later when a problem arises.”
“But how can this get really slimy, really fast?” you ask, because a little political bribe money here and there to grease some wheels isn’t that scandalous in the corrupt world we live in.
It looks like it might go way, way beyond just some wheel-greasing. That same Hyundai Motor chairman who is now being brought in for questioning was convicted back in 2007 of embezzlement, and was given a three-year suspended prison sentence.
And then he was pardoned. By South Korean President Park Geun-Hye.
3rd Gear: Car Sales Are Still Way, Way Up
All of that alleged criminality aside, there is some good news in the car world. Sales are way up, Automotive News reports:
After three consecutive declines, automakers managed in November to make the largest year-over-year sales gain since February, posting a 3.6 percent gain.
Of course, because this world is terrible, nothing can be just purely sunshine and rainbows. That jump in sales was largely juiced by incentives, or the dealership equivalent of steroids. As AN notes, incentives now amount “to more than 12 percent of the industry’s average transaction price.” That’s huge.
But hey, people are buying cars. Cars are good. We like cars. We’re biased that way.
4th Gear: The EPA Locked In Regulations So Donald Trump Can’t Do Much
Knowing that Donald Trump’s incoming presidential administration will likely be a disaster for people who like to breathe, President Obama’s EPA is taking action to cement his legacy, mostly by cementing current regulations in place and making it very difficult to change that, AN says:
The new timeline makes it possible for Obama’s appointee, EPA Administrator Gina McCarthy, to be the one who issues the final ruling. If that happens, it would be much tougher for the incoming administration to change the 2025 model year standards, said Dave Cooke, senior vehicles analyst at the Union of Concerned Scientists.
“They would have to do a new rulemaking,” Cooke said. “That’s a large undertaking. This is years’ worth of data and pretty rigorous analytic work justifying this conclusion. You can’t just snap your fingers and say, “I don’t like what the data concludes.’”
I know, I know, we’re all a bunch of lefty loons for remotely cheering this thing. But you can’t drive a car if you can’t breathe.
5th Gear: Formula One Makes A Valiant Return To France.
On this day, highway administrators pile into a car and take a ceremonial drive through a paper ribbon at the entrance to the final segment, known as the West Leg, of the infamous Dan Ryan Expressway in Chicago. (Most of the Dan Ryan proper had opened in 1961; construction on the West Leg, or Interstate 57, began in 1967.) The road got its name from Cook County Chairman Dan Ryan, who had written the 1955 bond issue that directed many millions of dollars to the county’s expressway-building fund. Today, his namesake road, despite being one of the widest in the world, is known for its frequent traffic jams.
Neutral: Why Is It So Damn Hard To Run A Car Company And Be A Person At The Same Time?
I have, admittedly, never been the CEO of a major auto manufacturer before, so I can’t say for sure why it’s apparently so hard to run a car company and not have some sort of major, absurd, and easily avoidable scandal.
Are you the CEO of an enormous car company? Please let us know why this is so difficult in the comments below.