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. And just a heads up, there are a lot of multi-million dollar settlements and fines raining down on the auto industry today.
The deal is official, as Bloomberg reported in a wire this morning, that BMW signed with Great Wall to produce electric Minis in China. This will be the first time Minis will be made outside of the UK. Apparently BMW had tried to get a partnership going on Mini with Toyota, but that was getting too expensive, as Automobile’s Goerg Kacher reports.
Oddly, BMW already has a partner for making cars in China (Brilliance), and BMW says this partnership will continue.
And even more oddly, BMW will also be making electric Minis in the UK, but they’d be different from the ones made in China, per The Financial Times.
In my favorite story of the past while, the European Union has figured out that a bunch of suppliers in the auto industry had been engaging in price cartels, and now there’s a $671 million (€546 million) fine that hits a number of companies including Bosch and NGK, as The Financial Times reports:
Four companies—Chile’s CSAV, Japanese carriers “K”Line and NYK, and the Norwegian/Swedish carrier WWL-EUKOR—were fined a total of €395m for a cartel that fixed the bidding to maintain the traditional market share for the deep-sea transport of new cars, trucks and farming vehicles to and from Europe from October 2006 to September 2012. MOL avoided a fine of €203m by notifying officials about the cartel.
Car parts makers Bosch and NGK were fined a total of €76m for coordinating pricing of spark plugs between 2000 and 2011 to avoid competing. Denso avoided a fine of around €1m by notifying officials about the cartel.
A further €75m fine was assessed for two cartels related to pricing of braking systems. TRW, Bosch and Continental fixed pricing of hydraulic braking systems sold to Daimler and BMW between February 2007 to March 2011. TRW avoided a €54m fine for reporting the hydraulic braking cartel to regulators.
Anytime a company gets hit for being in a cartel of any kind is juicy news, as far as I’m concerned.
Takata already pleaded guilty to a criminal penalty for its airbags last year and paid out $1 billion, and it has already declared bankruptcy, but there’s still some more legal headaches for the company to deal with. Today Takata reached a settlement with 44 U.S. states and the District of Columbia in a civil penalty to the tune of $650 million, as The Financial Times reports.
If I’m reading things right, the money going out in this settlement will be sublimated to money going out to settlements that have money going back to consumers, so us people will get our money first.
Raj Nair is out over alleged “inappropriate behavior,” and the man to replace him is Kumar Galhotra, per the FT. Galhotra has been running Lincoln as of late and was nice the last time I pestered him with questions about the time Lincoln sold complete knock down kits of the Town Car to Chinese carmaker Hongqi in the ‘90s and ‘00s.
5th Gear: BMW Pays $2 Million To Settle Claim That It Refused Lease Refunds To Military Personnel Called To Duty
This one isn’t a good look for BMW, as Reuters reports:
BMW AG agreed to pay more than $2.2 million to settle U.S. government claims that it failed to provide required refunds to 492 military personnel who lawfully terminated their vehicle leases because they were called to duty.
In the first case of its kind, the U.S. Department of Justice on Thursday said BMW Financial Services NA violated the federal Servicemembers Civil Relief Act by having since August 2011 refused to reimburse so-called capitalized cost reductions to service members who ended their leases early.
BMW didn’t admit or deny any wrongdoing, which is probably a big part of why it settled.
This is probably the best example of a case that a carmaker absolutely positively would not want to go to a trial.
The sneaking suspicion around the office is that this Great Wall/Mini partnership on EVs is going to extend to the entirety of Mini, but I’m not sure.