Volkswagen faces a Dieselgate legal setback, Boeing is still trying to come back from its 737 MAX disaster, and Jennifer Granholm. All that and more in The Morning Shift for December 17, 2020.
1st Gear: President-Elect Joe Biden Will Push Hard On EVs
I am a little skeptical on just how hard this push will go, given that Republicans control the Senate (for now) and Republicans have not shown much appetite for dealing with climate change. But Joe Biden will become president on January 20, and I could very much see his administration doing things aside from pass major legislation to encourage the adoption of electric cars.
That could be something as simple as strengthening emissions standards for new cars, though you can expect that the Biden administration will look deep into its toolbox for solutions that don’t involve Congress. That will start with cabinet appointments, with Pete Buttigieg named as transportation secretary this week and former Michigan governor Jennifer Granholm in the cards to be energy secretary.
Reuters looked at what that might mean for EVs, mainly based on the fact that when Granholm was governor (from 2003 to 2011) she was pretty into them. The idea is to support not only building EVs and encouraging people to buy them, but also working on the infrastructure that hasn’t exactly caught up with the cars themselves. Reuters explains:
When Jennifer Granholm was governor of auto-manufacturing Michigan, she led a charge that secured a whopping $1.35 billion in federal funding for companies to make electric cars and batteries in her state.
As President-elect Joe Biden’s expected energy secretary, Granholm now faces a bigger task: making good on his campaign promise to help the United States compete with China on electric vehicles as part of a $2 trillion plan to fight climate change.
Biden has said China was set to dramatically outpace the United States in EV production. But the United States, he said after the Nov. 3 election, could “own” the market with the right green policies. He has promised to build 550,000 EV charging stations and create over 1 million jobs by investing in clean energy research.
Joe Britton, executive director of the Zero Emission Transportation Association, or ZETA, was optimistic that Granholm, who got green initiatives done in Michigan, could make a difference.
“If we cultivate the electric vehicle sector, we can create hundreds of thousands of manufacturing jobs and Governor Granholm has been a key advocate in driving that economic development,” he said.
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The story is light on details of what Granholm could actually do, though it is somewhat reassuring in a general sense that the next administration will be staffed with people who have even a basic sense of the things that need to get done to combat climate change.
The United States has some catching up to do with China. Sales of EVs in China are expected to be about 1.1 million units this year. Numbers for 2020 U.S. sales were not yet available, but U.S. automakers sold just 326,000 EVs last year.
Besides federal funding, much work will have to be done on the nation’s electricity transmission grid to ensure it can take the load of new cars charged with power.
“This is a systemic issue,” said [Kristin Dziczek, vice president, industry, labor & economics at the Center for Automotive Research]. “It’s going to require a lot of thought and planning around a number of dimensions, and she’s got good policy chops,” she said of Granholm.
2nd Gear: Boeing Is Hiring Pilots To Help Get 737 MAX Airplanes Back Into The Skies
The pilots will be instructors for other pilots flying 737 MAX, according to Reuters. Pilot training is a big part of getting 737 MAX planes back up and running.
Boeing Co is hiring up to 160 pilots to be embedded at airlines in its latest bid to ensure its 737 MAX has a smooth comeback after a 20-month safety ban, according to a recruitment document seen by Reuters and people familiar with the move.
The new “Global Engagement Pilots” will act as instructors or cockpit observers on 35-day assignments at an equivalent annual salary that could reach $200,000, for a total potential cost of $32 million, one of the people said.
“Duties include: consulting activities and assist in customer support, including flying opportunities,” according to a summary seen by Reuters of job terms from a contracting firm carrying out the recruitment on behalf of Boeing.
Pilots must have 1,000 hours of instructor experience and “no incidents, accidents, losses or violations,” and be licensed on the 737 and other Boeing jetliners, it said.
“We continue to work closely with global regulators and customers to safely return the 737-8 and 737-9 to service worldwide,” a Boeing spokeswoman said.
3rd Gear: Volkswagen Lost In Court In Europe
Dieselgate spawned roughly 10 million separate legal actions/lawsuits/inquiries, one of which EU’s top court issued an opinion on this week. In short: Volkswagen lost.
Volkswagen Group’s use of technology that helped it bypass diesel-engine pollution tests breached European Union rules, the bloc’s top court said.
The use of a so-called defeat device can’t be justified by the fact that “it contributes to preventing the aging or clogging up of the engine,” the EU Court of Justice ruled Thursday. Decisions by the Luxembourg-based EU judges are binding.
Such software “must allow the engine to be protected against sudden and exceptional damage” and “only those immediate risks of damage which give rise to a specific hazard when the vehicle is driven” could justify its use, the court said.
The court was asked to rule in a French prosecution against VW for allegedly deceiving purchasers of diesel vehicles.
The French case concerned an exhaust gas recirculation (ERG) valve, which can redirect some exhaust gases back into the air supply for the engine to reduce final NOx emissions.
The ERG was adjusted in tests using a device to allow emissions to remain below the regulatory ceiling, but according to an expert’s report the device would in normal conditions lead to the partial deactivation of the ERG and higher NOx emissions.
Operation of the ERG would have made maintenance more frequent and expensive because, for example, the engine would clog up more quickly.
VW announced recalls of almost 950,000 vehicles in France following the diesel scandal.
Dieselgate will never stop giving.
4th Gear: Continental Says More Jobs Won’t Be Lost Over EU Emissions Rules
The German car parts company said a week-and-a-half ago that up to 30,000 jobs — out of a total workforce of 230,000 — could be cut in the transition to EVs, but yesterday its CEO said that it didn’t expect cuts beyond that, even if the EU tightens emissions restrictions further.
From the Financial Times:
Nikolai Setzer said on Wednesday the German group would not add to the 30,000 jobs already at risk in a wide-ranging restructuring plan, introduced last year to adjust to the upheaval in the auto industry.
The chief executive added that the Hanover-based company would emerge as a “winner” in the shift to battery-powered cars and would target a profit margin of up to 11 per cent, despite shifting from its traditional tyres and engine businesses to building software and high-tech components.
But Mr Setzer, a Continental lifer who took over as chief executive this month after his predecessor stepped down citing health reasons, said tighter CO2 targets would “offer more opportunities than risk” for Continental.
While stricter rules from Brussels would “definitely shift our portfolio”, and lead to greater investments in components for electric cars, it would have “no effect on autonomous mobility, on autonomous driving, on the need for tyres,” he told the Financial Times.
Continental has been talking about this 30,000 number for years.
5th Gear: Lamborghini Is Doing Just Fine
Supercar makers have been getting along all right amid the pandemic, as the rich stay rich. Lamborghini said things for it are more or less back to normal.
Lamborghini said its order intake suggests the Italian supercar maker can stabilize sales next year after they fell in 2020 because of the coronavirus pandemic.
Orders are piling up to a degree that the Volkswagen Group unit should at least match this year’s sales performance, unit chief Stephan Winkelmann said Wednesday in an interview with Bloomberg TV.
“We have a good momentum,” said Winkelmann, who took charge of the business this month.
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Neutral: How Are You?
It’s been about nine months of this shit! I am officially tired of it!