Auto companies take sides on Trump’s fuel economy battle, GM made a nice pile of change while workers were on strike, Porsche “online” sales, Mr. Musk goes to trial, and more in The Morning Shift for Tuesday, October 29, 2019.
1st Gear: A Whole Bunch Of Car Companies Side With Trump In California Fuel Economy Battle
Remember that whole fuel economy regulations fight where the Trump administration wanted to freeze standards until 2026 and California, which sets its own fuel economy standards that dozens of other states follow, said hell no breh and formed its own agreement with Ford, Volkswagen, BMW, and Honda, then the Trump administration flipped out and now there’s a whole court battle about whether California can even have its own fuel economy standards?
Up until this point, the automakers who had spoken up had done so in California’s favor. That changed in a legal briefing Monday night, when GM, Fiat Chrysler, Toyota, Mazda, Nissan, Kia, and Subaru filed a brief supporting the Trump administration’s efforts to prevent California from setting their own standards.
More from Reuters:
John Bozzella, president and chief executive of Global Automakers, a trade group representing major foreign firms, said the companies had little choice but to back the administration.
“It’s been the federal policy for the better part of 40 years that the federal government has the sole responsibility for regulating fuel economy standards, but it doesn’t have to get to that,” Bozzella told reporters, speaking for an ad-hoc group, the Coalition for Sustainable Automotive Regulation.
“We can still reach an agreement” on fuel economy rules, Bozzella said, adding that companies still support a “middle ground” between California and the administration that would see rising attainable fuel efficiency requirements. He said the Trump administration did not ask the automakers to intervene.
As expected, Democrats and climate change activists didn’t exactly welcome the news. Here’s the New York Times:
Ann Carlson, co-director of the Emmett Institute on Climate Change and the Environment at the University of California Los Angeles, said the Trump administration had been clear from the outset that it was not interested in tightening the standards. “If you’re intervening on the side of the Trump administration to limit California’s authority, you’re siding with much less stringent standards,” she said. “I don’t think you can have it both ways.”
The move “emboldens an administration that has already rejected any sort of settlement with California,” she added.
This is a spicy meatball. No matter how auto executives and trade group spokespeople try to spin this, it effectively means the auto industry has segmented into two factions when it comes to fuel economy standards: one in favor of only the federal government setting standards (and therefore making it easier to lobby against harsher ones), and the other in favor of individual states still having the right push beyond what the Feds might mandate as they have for 50 years.
If nothing else, it has forced auto companies to put their chips down in terms of where they really stand on fuel economy issues. I expect customers who care about such things, an increasingly large portion of the population, will take notice.
2nd Gear: GM Made A Nice Little $3 Billion Profit In The Third Quarter Despite The Strike
Strike? What strike?
Tuesday, a day after full production revved back up at GM’s U.S. plants, the automaker reported a third-quarter pretax profit of $3 billion, down 5.9% from $3.2 billion a year earlier. After taxes, GM’s income was $2.3 billion, down 8.7% from a year earlier.
Yes, nearly all of GM’s key financial metrics were down in the third quarter year-over-year, but the automaker also logged a $3 billion profit in a quarter in which it experienced the longest automotive industry work stoppage in 50 years.
That being said, GM will experience the brunt of the strike’s effect over the rest of the year, according to the Detroit Free Press, so we’re yet to see the full impact. Nevertheless, it’s hard to see how this is anything other than good news for GM all things considered.
3rd Gear: Porsche Will Try Online Car Sales, But You Still Have To Go To The Dealership
A riddle for you: if you still have to go into the dealership to sign papers and get your car, are you really introducing “online sales?”
Porsche wants to find out. From Automotive News:
Porsche is launching online car sales in the U.S. in a nod to shifting consumer shopping preferences.
The pilot project with 25 dealers allows customers to shop vehicle inventory and complete paperwork online.
Once an online order is submitted, customers must visit the dealership for final signatures and to collect their vehicle, Porsche said.
Online sales make sense for certain brands and customers, and I’d wager Porsche is one of them, since Porsche buyers tend to know exactly what they want and are able to pay whatever the car costs. But there’s something funny about launching an “online sales” pilot program that still requires people to go to the dealership to sign some paperwork and get the car. It sounds to me like you still haven’t really bought the car until you go to the dealer.
4th Gear: Elon Musk’s Bizarre Pedophile Lawsuit Is Going To Trial, Just What The World Needs
It seems to me like one of the many benefits of being very rich is having enough money to simply pay people to go away. Yet, Elon Musk continues to insist on making an ass out of himself by dragging this “pedo guy” lawsuit onward. Here’s Bloomberg:
Elon Musk will have to go to trial in December after a federal judge rebuffed his latest request to throw out a defamation lawsuit filed by a U.K. caver after Musk referred to him as a “pedo guy.”
U.S. District Judge Stephen Wilson in Los Angeles on Monday ruled that a jury will have to decide whether Musk was negligent for failing to check that statements he made in his tweets and “off-the-record” emails were true. The Tesla CEO’s accusations, the judge said, were not germane to any public controversy involving Vernon Unsworth, which might have entitled him to a free-speech defense.
Unsworth only has to persuade the jury “by a preponderance of evidence rather than clear and convincing evidence,” which, given the undisputed facts of the case, does not seem particularly challenging. I’m sure the trial, should it take place, will bring us yet more cringe-worthy windows into the man that is Elon Musk.
5th Gear: Karma Tries To Figure Out What The Hell It Is
Karma Automotive, the very troubled Chinese-backed California car startup that is one of the entities emerging from the Sandy-flooded waters of Fisker, is undergoing some major changes in order to try and rid itself of the “troubled car startup” label.
More from Automotive News:
A top-to-bottom reorganization at Karma Automotive will see the Chinese-funded California startup try to steer a quick path toward profitability by selling its engineering, design, customization and manufacturing capabilities to other companies.
Karma’s plant in Moreno Valley, Calif., has capacity for up to 1,000 hand-built vehicles per year. But production of the company’s Revero GT hybrid performance sedan is expected to be between 500 and 1,000 vehicles per year. Karma wants to sell excess capacity as well as its product development and vehicle integration expertise to other automakers in a new business plan it calls 4+1.
Karma spokesman Dave Barthmuss said the company is open to building another company’s vehicles in its plant.
Also, Bob Kruse, who helped develop the (notoriously successful) Volt at GM, is out as CTO.
The company plans to move ahead with developing newer, higher-performance models and an SUV. Maybe those cars can be not awful.
Reverse: John Glenn, 77 Years Old, Returns To Space
Neutral: Would You Buy A Car Entirely Online?
Tesla is known for prioritizing online sales, and even briefly flirting with online-only sales before they realized how stupid that was. But, with Porsche making moves into the online sales space, would you buy a car online? What do you think are going to be some of the things to go wrong with sales moving out of dealerships and onto phones and desktops?