Automakers Have ‘Stockholm Syndrome’ With Trump Over Fuel Economy Standards

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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: What Did You Expect?

A quick trip down memory lane. Here’s something an advisor to President Donald Trump said back in 2016, the day after he was elected:

“The Trump administration will complete a comprehensive review of all federal regulations. This includes a review of the fuel-economy and emissions standards to make sure they are not harming consumers or American workers.”


Emphasis mine, because it should be crystal clear that since taking office Tump has signaled that more aggressive fuel economy standards set by his predecessor will be reconsidered. Automakers, with their vast intellect, glommed onto this immediately and started marching lockstep with Team Trump.

“The standards we previously agreed to with Obama are actually too stringent!!” they wailed. So on they went, cozying up to Trump and his handpicked EPA administrator whose reputation before assuming the position was besmirching every single thing the EPA stands for.


Months passed, and eventually the EPA did get around to making a decision on reconsidering fuel economy and vehicle emissions standards. And wouldn’t you know it, the administration that disputes the overwhelming evidence of man-made climate change, wasn’t kidding about dismantling one of former President Barack Obama’s chief accomplishments in combatting climate change. The plan? Freeze fuel economy standards starting in 2020, vastly undercutting the previous Obama target of 55 mpg.

Pruitt’s team also wants to undercut California’s ability to set its own, more aggressive, standards, which California has no interest in letting happen. Now, automakers are faced with the prospect of something far more radical than they ever wanted, and the potential for the U.S. to have two completely different set of standards, if a legal war breaks out between the states and the feds.


So, on Friday, execs from the top automakers are trudging into Trump’s office, where, according to The New York Times, they’ll be told to “Get on board with the administration’s plan to dramatically roll back fuel economy requirements.”

From the Times:

However, this past Tuesday in House testimony, Mitch Bainwol, the auto industry’s top lobbyist, suggested that the automakers have a different message: They are continuing to urge the Trump administration, he said, “to find a solution that continues to increase fuel efficiency standards.”

That sets up an awkward meeting with Mr. Trump. It is a tricky situation of the carmakers’ own making.


Awkward is a polite way to put it. Myron Ebell, an EPA advisor who’s the leading advocate of pushing a bogus agenda to dispute the evidence of manmade climate change, hilariously summed up the problem, though, with this bit:

“He has seen them on his side, and now there is disagreement about how far this should go,” said Myron Ebell, who led the E.P.A. transition team. The thinking was that “the automakers have succumbed to Stockholm syndrome” in their relationship to environmentalists, Mr. Ebell said. “They now identify with their kidnappers, and need therapy to recover.”


I sure wonder how this is going to pan out.

2nd Gear: It’s Infrastructure Week Forever

Infrastructure week is my favorite week of the year, because it’s every week, always, and now, we’re told, it’s going to never stop.

“We’re going to continue looking at ways to improve that nation’s infrastructure, but in terms of a specific piece of legislation, I’m not aware that that will happen by the end of the year,” Sanders said at the daily White House press briefing.


I’m honestly stupefied at this point by the endless delays over the alleged $1 trillion package touted by Trump, that in reality is just something like $200 billion and a massive effort to privatize infrastructure across the U.S. Republicans, in theory, should be on board with this (bad) idea, and yet, nothing. Whatever.

3rd Gear: Tesla And UAW Seek Delay In Hearing Over Labor Allegations

Back in March, the National Labor Relations Board, an independent government agency that seeks to enforce U.S labor laws, filed a renewed complaint against Tesla, saying it found merit to allegations levied by workers at the automaker’s assembly plant in California.


A hearing over the NLRB’s complaint, which accused Tesla of preventing workers from distributing union materials and allegedly integrating and threatening workers over their efforts, was scheduled for June. But now Tesla and the UAW, which represents the workers who filed the initial complaint, is seeking to delay the hearing.

In a motion filed on Monday, Tesla and the UAW said that scheduling issues exist for the June 11 hearing, and a request was made to delay the hearing until late September.


“Unfortunately, the Regional Director [of the NLRB] denied the request,” the filing says. “Accordingly, the Employer and the Charging Party hereby request an early telephone conference with the Administrative Law Judge to address these unresolved scheduling issues.”

A decision hasn’t been made as of Thursday.

4th Gear: Ohio Governor Wants His State To Be The ‘Wild West’ For AVs

An Uber-owned self-driving car fatally struck a pedestrian in March, but nonetheless, Ohio Governor John Kasich wants to make his state the “wild, wild west” for self-driving cars, reports Bloomberg. On Wednesday, he signed an executive order that allows companies to test robot cars on any public road in the state, even without a driver behind the wheel.


Kasich then added a line to describe his reasoning that included a rather poor choice of words, given the horrible Uber crash, which left the pedestrian, Elaine Herzberg, dead. From Bloomberg:

A licensed driver will have to be monitoring the car remotely and have the ability to avoid accidents if the car’s system fails, according to the order.

“You’ll always have to take risks,” Kasich said Wednesday while announcing the order. “If you don’t take risks, you die.”


I maybe would’ve tried something else there.

5th Gear: Ford’s Second Quarter Could Be Rough Due To Supplier Fire

Ford shuttered production—for now—of the best-selling F-150 on Wednesday, due to a fire at a key supplier that’s wreaking havoc across the industry right now.


About 7,600 workers are being temporarily laid off at plants in Kansas City and Dearborn, Michigan, which assemble the F-150. Ford doesn’t know how long the shutdowns will last, but it’s up to how quick the supplier, Meridian Magnesium Factory, gets back on its feat. Meridian has been closed since May 2, after a fire and explosion ripped through its plant in Michigan.

What’s clear, Ford said, is that its second quarter earnings are going to take a hit, reports Reuters:

“We’re confident that any impacts will be short term,” said Joe Hinrichs, president of Ford global operations, in a media call late Wednesday.

Hinrichs and purchasing director Hau Thai Tang said Ford was working with the supplier, Chinese-owned Meridian Magnesium Products, to shift production of the affected parts to other suppliers until the fire-damaged plant in Eaton Rapids, Michigan, can be repaired and production resumed.


Ford has had a rough go with Wall Street over the last year, so the timing sucks for the Blue Oval. But the company feels confident enough that it’ll still hit its full-year earnings estimate, reports Reuters, so perhaps the setback will smooth itself out in the coming months.

Reverse: Here’s A Lifeline


Neutral: Should Automakers Feel Regret Right Now?

It’s pretty obvious that Scott Pruitt was hellbent on taking this sort of action, so I can’t see why they should feel regret. Shouldn’t they have seen this coming?