Another emissions scandal brewing, another tariff threat, another Ghosn arrest, and another report about the 737 MAX crashes, plus exciting news about The Morning Shift. All this and more in The Morning Shift for Friday, April 5, 2019.
Here is yet another reminder that, for all the marketing talk about being on the vanguard of clean technology and a greener future, automakers have consistently resisted this energy transformation.
You may recall that, about two years ago, EU authorities raided BMW, Volkswagen and Audi headquarters, investigating some type of cartel. Well, the results are in, and, yep, the EU says they were indeed in collusion from 2006 to 2014 because they didn’t want to implement clean emissions technology.
The EU focus is on selective catalytic reduction systems to reduce harmful nitrogen oxides emissions of diesel passenger cars through the injection of urea, which is also called AdBlue, in the exhaust gas stream.
It is also concerned about potential collusion on “Otto” particle filters to reduce harmful particle emissions from exhaust gases of petrol passenger cars.
Ironically, BMW made particle filters standard on all gasoline models last year.
Reuters further reports that Daimler tipped off the EU to this collusion and therefore doesn’t expect to be fined. And those fines could be quite substantial. Per EU law, they can be up to 10 percent of the company’s global revenue. So we’re talking billions of dollars at stake here, which Daimler thinks it shouldn’t have to pay despite allegedly participating in the collusion. Pretty sneaky if you ask me.
In yet another attempt to get the Mexican government to do some unspecified thing about illegal immigration, President Trump replaced his threat to close the U.S.-Mexico border with merely levying tariffs on all cars crossing into the U.S. instead. From the AP:
“You know I will do it,” he said concerning his tariff threat. “I don’t play games.” That’s similar to his statement last week when he made his more extreme threat: “I am not kidding around.”
Speaking to reporters at the White House on Thursday, Trump said, “If Mexico doesn’t give the help, that’s OK. We’re going to tariff their cars coming into the United States.”
He also said something about giving Mexico a “one-year warning” to halt the flow of drugs across the border as well.
I’m no economist, but plenty of economists have made their views on the negative impact on tariffs quite clear. I guess the time the automakers told him tariffs are a terrible idea didn’t quite register.
After being arrested for the fourth time on Thursday under charges of using $5 million of Nissan’s money to enrich himself, a judge granted the police’s request to hold Ghosn for 10 days for questioning.
Ghosn, according to Reuters, is now in full bunker mentality:
In a statement released on Thursday, Ghosn said he was innocent of the “groundless charges and accusations” against him. The once-feted executive, who has said he is the victim of a boardroom coup, also called the latest arrest an attempt to silence him.
His lawyer told reporters they plan to appeal today.
As suspected, the main cause of the Ethiopian Airlines crash was a malfunctioning automatic anti-stall system, according to a preliminary report released by Ethiopian authorities. That being said, very few airplane crashes are the result of any one factor, and this case is no different.
In conjunction with the new report, Bloomberg spoke to a number of former investigators who added that the pilots keeping the throttle at full power even as they were experiencing problems didn’t help:
“The thrust was full bore the whole way,” said Roger Cox, a former accident investigator at the National Transportation Safety Board, who flew earlier models of the 737 while working as an airline pilot. “That is extremely curious.”
But it’s worth remembering that things went from bad to worse very quickly. It seems unfair to blame the pilots, who followed almost all of the emergency protocols, for missing one remediation measure as they struggled with an automatic system doing things they didn’t understand. As one pilot put it to Bloomberg:
“You can’t read the transcript and not put yourself in the cockpit,” Tajer, of the Allied Pilots Association, said. “Every honest pilot says, I could see me right there, doing that, even if it was not a good thing, or saying, yeah that makes sense.”
Who’s pumped for our semi-autonomous driving future?
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Daimler thinks it shouldn’t have to pay a fine for colluding with other automakers because it reported the collusion to the authorities. Should they?