It's The Feds Vs. The Dealers And The Dealers Will Probably Win

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1st Gear: And Customers Will Probably Lose

The Consumer Financial Protection Bureau has already clamped down hard on banks for working with dealers to screw customers — specifically, to overcharge people because they're not white.


Now the CFPB is hoping to regulate dealers directly in order to protect all consumers, with this proposed change that would allow them to do so (currently they can only deal with the financial institutions).

Of course, the National Automobile Dealers Association is against it. Here's the pro and con via Michael Martinez:

“Some people end up paying more on their auto loans than their neighbors — with the difference being not their creditworthiness, but their race or ethnicity. Such discrimination may result in millions of dollars in unjustified consumer harm every year in the auto lending industry,” Richard Cordray said then. “Our initial analysis thus far raises serious concerns about discrimination in the field of indirect auto lending, which is causing millions of dollars in harm to consumers.”

McConnell on Tuesday argued that customers would pay more under a flat-rate system.

“The current system works because it forces banks to compete and offer dealers low rates to get their business,” McConnell said. “The current system saves customers money.”

I'm with the CFPB on this one, but the dealers are a strong lobby and they've already got a bipartisan bill to remove the ability of the CFPB to give any guidance on auto lending.

2nd Gear: Marchionne Says "Ciao" In 2018


Fiat Chrysler CEO Sergio Marchionne says he's outta here after the end of 2018, which will time out with the end of his grand five-year plan.

From Bloomberg;

“I’ll undoubtedly do something else” after the end of 2018, Marchionne, 62, said last week in an interview with Bloomberg Businessweek at the Balocco test track in northern Italy. “I am not going to do any more turnarounds. I’m done; let some of the young punks do it.”


Possible replacements are many, but I'd bet on a European. Also, it's Marchionne we're talking about here, so who knows if he's actually gone in 2019.

3rd Gear: GM Recalling Cop Cars Over Gear Indicator


Here's a recall that's kind of disturbing : 7,061 Caprice cop cars might just shift out of park and into gear without hitting the brake pedal or might shift between gears while showing a different gear.

According to the Freep there have been no injuries and the company is sending out a kit to fix it.


4th Gear: Analysts Still Not Sure About GM


Not like it's been a great week for the markets anyways, but analysts looked at GM's big presentation and were like: ¯\_(ツ)_/¯

GM didn't change their profit outlook in the same way Ford did so Morgan Stanley just did it for them.


Via The Detroit News:

Jonas said GM’s North American margin goals are higher than his forecast of 7.2 percent in 2016 and 5.8 percent in 2017. He said a “10 percent margin is technically possible”; however, when factoring in North American market risks with growth, mix, content and pricing, “a margin of 0 percent has a similar probability.”


Someone deliver an aloe vera plant to the Renn Cen because THEY JUST GOT BURNNNNNNNNNNED.

5th Gear: Panasonic Turning Yen Into Batteries


The Gigafactory is coming and Panasonic is in with "tens of billions of yen" right now.

What's the hurry? Panasonic's CEO Kazuhiro Tsuga tips is hand in this WSJ report:

In a call with investors in July, Tesla founder Elon Musk said he expected Panasonic to contribute 30%- 40% of the battery factory’s total cost, likely to reach $5 billion. Tesla will cover about half the amount.

Turning his attention to foreign-exchange rates, Mr. Tsuga said separately that his company would find it desirable for rates to remain stable, and that the dollar rising as high as ¥120 would be “excessive.”

The dollar was trading around ¥109.12 early afternoon in Asia.

Yeah, I don't think thats as "separate" as it seems. For one, the weaker the yen the more of it you're going to have to spend to reach the $2 billion or so you're planning to invest. Plus, if the yen is going to continue to drop relative to the dollar it's best to send them elsewhere as soon as you can.


Reverse: Talk About A Barn Find

On this day in 1869, the inventor and mechanic Frank Duryea is born on a farm in Washburn, Illinois. When Duryea was just 24 years old, he and his older brother, Charles, designed and built the Duryea Motor Wagon, one of the first successful gas-powered motor vehicles in the United States.




Neutral: CFPB Versus Dealers, Who Wins? Who should win?

Photo Credit: Getty Images

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