This is The Morning Shift, our one-stop daily roundup of all the auto news that's actually important — all in one place every weekday morning. Or, you could spend all day waiting for other sites to parse it out to you one story at a time. Isn't your time more important?
1st Gear: Delphi Uses An English Base To Avoid Paying US Taxes
Interesting report from Bloomberg this morning, that during the auto bailout in 2009, President Obama's Treasury Department bailed out Delphi, one of our biggest car parts makers, with $1.7 billion in government funds. That's not the interesting part.
This is: Obama is on the record saying that companies that adopt foreign headquarters to avoid taxes are unpatriotic, but after the bailout Delphi's paper headquarters moved to the UK. Granted, the administration was more worried about General Motors than Delphi and didn't place anything stringent on Delphi to keep their HQ in the US. Now, Delphi is reportedly avoiding somewhere in the area of $110 million in taxes every year because of that move. The IRS is attempting to change this, however, telling Delphi that the benefits of the address change are to be rescinded.
Delphi is fighting it, and it's fairly obvious why. The US has some of the highest corporate tax rates around, so they'll do anything to help that bottom line.
Update: This is the Treasury's response as told to Bloomberg:
To be sure, the administration's goal in helping Delphi in 2009 was to prop up its main customer, Detroit-based General Motors Co. — not the corporate tax base. The Treasury Department said at the time that it wouldn't micro-manage GM or force changes for government policy reasons, although it did intervene in the politically sensitive area of executive pay.
Adam Hodge, a Treasury Department spokesman, said the department's work with Delphi was limited to providing funding through GM in order to shore up a crucial supplier for the automaker.
Saving Car Industry
"We weren't involved in that decision regarding the tax implications in their emergence from bankruptcy," he said, adding that he got his information from the former Treasury officials who worked on the bailout. "We were focused on trying to save the auto industry." He declined to answer specific questions, citing the pending IRS dispute….
In an interview, Rattner said as far as he can remember, he wasn't aware of any plan for Delphi to take a foreign address until Bloomberg News asked him about it a few weeks ago. He said others on his team handled the details of the Delphi negotiations, which he said contributed to the industry's revival.
2nd Gear: Bring Us All The Diesels, GM
GM currently has a diesel engine in the Chevy Cruze and a Duramax V8 in their pickups. And that's it for diesel power. But that's about to change.
Automotive News reports that GM is going to be bringing in a bunch more diesels as they see the market growing by 2020 as torque becomes what people want, not necessarily horsepower. The next diesel will be the 2.8 liter four cylinder in the Colorado coming in 2016. But look for more passenger vehicles to get them too now that the Cruze is selling as they expected.
3rd Gear: GM Has Nearly 100 Ignition Switch-Related Claims
GM began accepting claims for victims of its massive ignition switch recall on Friday, and now has 93 claim applications. They received about 50 in the first day alone.
Many of the claims are mass claims from lawyers, but 93 still seems kind of low based on the number of cars recalled. GM says they'll start providing compensation in 90 days to simpler claims and 180 days to complicated ones.
So far, GM has fixed nearly 700,000 of the 2.6 million cars recalled.
4th Gear: What China Wants, China Gets
China says that due to some "monopoly" practices, they will soon be punishing Audi and Chrysler. Punishment that could cost up to 10 percent of their annual sales.
It seems that regulators have found that both companies participated in "anti-competitive behaviors." They are also launching a probe into Mercedes Benz. This comes just after Jaguar was basically ordered to make its cars cheaper in China.
5th Gear: Don't Hack Us, Bro
Nissan and Chrysler were recently declared the most hackable cars. They don't like this. Both companies have said they will do a total review of the Jeep Grand Cherokee and the Infiniti Q50, but don't necessarily believe that they cars can be hacked as easily as these experts say.
Thing is, the people who released the study haven't even tried to hack these cars, they are just basing this assessment on data. Yeah. It could all be BS.
On this day in 1991, in a letter to around 150 of its United States franchisees, the French automaker Peugeot (manufacturer of both Peugeot and Citroen cars) announces that it will stop producing cars for the U.S. market as of the following September after five years of steadily decreasing sales.
What are your thoughts on a company like Delphi using a base in England to avoid taxes? And that it was sanctioned by the Obama administration.