Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: ‘Small Government’ Is Letting Other Countries Leap Ahead
Republicans firmly control all three branches of the federal government, and a large portion of state governments as well. While the party itself has very few real ideological principles of any sort, one of its biggest remaining ideas is “small government,” where the federal government just sort of sits on its hands and waits for the individual states—bastions of efficient government and decency that they are—to come up with their own policies. This has led to a patchwork quilt of regulations when it comes to autonomous cars, if an individual state has any regulations about such things whatsoever.
That patchwork quilt created by said dereliction is enabling other countries to absolutely leapfrog the United States in terms of autonomous vehicle technology growth, as Bloomberg reports:
Cars that drive themselves are finding the clearest paths to showrooms in the U.K., Germany, South Korea and Singapore, where governments have enacted legislation allowing autonomous vehicles to be tested on public roads. And China’s not far behind.
Those nations are outpacing the U.S., where the absence of national legislation to clarify a “checkerboard of state rules” hampers the deployment of driverless cars, Bloomberg New Energy Finance said in a report. California and Arizona lead the 50 states in allowing tests of driverless cars and host the largest fleets, according to the report released Tuesday.
Part of the reason why you’d want federal-level rules is because driving in Chandler, Arizona, is wildly different from driving in the middle of Baltimore, Maryland. Just as well, driving in Xi’an, Shaanxi Province, China, is surely different than driving in Qoqek, Xinjiang. But Xi’an and Qoqek will shortly have the same rules with which to operate autonomous cars.
But Chandler and Baltimore? They’re years off from being on the same playing field, at best. If only there was some possible way to get them all on the same level, much like we do with automotive safety standards already.
2nd Gear: Do Not Be Concerned With Things Happening Elsewhere
Speaking of China, Reuters reports that its massive economy is finally beginning to slow down:
Real estate investment rose 10.2 percent in April on-year, slowing from a 10.8 percent rise in March, according to Reuters calculation based on the official data.
Property sales by floor area fell 4.1 percent in April, the biggest drop in six months, compared with a 3.2 percent rise in March. New construction starts also slowed sharply.
For the first four months of the year, sales grew just 1.3 percent.
The property slowdown is weighing on consumption, filtering through to weaker demand for home appliances and furniture.
Retail sales growth slowed to 9.4 percent in April, missing forecasts for a 10.0 percent gain and off March’s pace of 10.1 percent.
What does this have to do with you, and cars?
Even with the rumblings of a trade war, the global economy is very tightly intertwined – especially these days, when China’s economic society is changing over from one of manufacturing and exports to one of service and consumption. Because of that, a slowdown there could affect economies globally. Couple that with an inevitable spike in gas prices, and we could all be heading for another recession.
And you know what that means.
3rd Gear: Russian Sanctions Are Affecting... Volkswagen And Porsche?
The U.S. Treasury Department announced sanctions on 23 Russian oligarchs last month, mostly over shady business dealings. One of those oligarchs, Oleg Deripaska, was sanctioned because he
has been investigated for money laundering, and has been accused of threatening the lives of business rivals, illegally wiretapping a government official, and taking part in extortion and racketeering. There are also allegations that Deripaska bribed a government official, ordered the murder of a businessman, and had links to a Russian organized crime group.
Sounds like bad news. It’s such bad news, in fact, that it’s affecting Porsche Automobil Holding SE, the corporate entity through which the Porsche/Piech family controls Volkswagen and Porsche. Porsche Automobil Holding has a supervisory board, and wanted to appoint an Austrian Siegfried Wolf, the former head of huge supplier Magna International, to said board.
But Mr. Wolf is also now the head of GAZ, which is owned by—you guessed it—Oleg Deripaska.
And because Porsche Automobil Holding doesn’t want to mess with anything that could potentially run afoul of international sanctions, Mr. Wolf is now on hold, the company said in a statement:
Prof. Wolf serves as chairman of the supervisory board of the Russian car manufacturer GAZ (Gorkowski Awtomobilny Sawod) based in Nischni Nowgorod, an important partner of the Volkswagen Group, which is subject to US sanctions. In the interest of Porsche SE he wants to wait for clearance of the harmlessness of his mandate at GAZ for his new assignment on the supervisory board of Porsche SE.
“Clearance of the harmlessness of his mandate at GAZ” is the most German thing I’ve read today.
4th Gear: A Dozen Automakers Failed To Meet Their Takata Deadlines
In the wake of everyone finding out that airbags made by Japanese company Takata could spray people with deadly shrapnel, the federal government ordered every car company to start swapping them out. You know, because of the whole shrapnel thing. There was a deadline and everything. But the Wall Street Journal reports that a dozen car companies have missed the deadline, according to a letter from NHTSA Deputy Administrator Heidi King:
“I am deeply concerned that, despite this progress, millions more vehicles with defective Takata air-bag inflaters remain on the roads,” Ms. King wrote in letters to auto makers earlier in May inviting them to meetings to discuss repair plans. The agency released a sample version of the letters on Monday.
“We look forward to hearing your plans to complete the remedy program for these highest-priority vehicles and your proposed timeline for doing so,” she said.
Have you not taken your car in to get fixed yet? Please do so. What would your mother say if she finds out?
5th Gear: Speaking Of Heidi King
NHTSA Deputy Administrator Heidi King was finally nominated by President Donald Trump to lead the agency, after he left the position vacant for 15 months. But now that King has officially gotten the nod, it looks like she’s got a rough road ahead of her. A lot of senators are dissatisfied with her performance, as the Detroit News reports, especially considering that NHTSA has a lot of regulations it has yet to implement:
Already, a pair of Democratic senators with high-profile perches on the Commerce committee have peppered King with questions about unfinished automotive regulations that have been mandated by Congress.
In a letter to King, the senators cited 10 unfinished Obama-era regulations that were mandated by Congress in 2012 and 2015, including side-impact requirements for children’s car seats, backseat seat-belt reminders, electronic recall notifications and enhancements to buses that are intended to reduce the likelihood of ejections and fatalities in crashes.
“For decades, Congress has worked on a bipartisan basis to enact laws to improve automobile safety and reduce vehicle-related fatalities,” Sen. Richard Blumenthal, D-Conn., and Ed Markey, D-Mass., wrote to King. “These acts of Congress cannot have their life-saving impact if they are not actually implemented. We urge you to implement these provisions without delay.”
As the old argument goes, “if we just implemented the regulations we have, we wouldn’t need any new ones.”
It’s a silly argument, but then again, it’s Tuesday.
Reverse: Bring It Back
On this day in 1942, gasoline rationing began in 17 Eastern states as an attempt to help the American war effort during World War II. By the end of the year, President Franklin D. Roosevelt had ensured that mandatory gasoline rationing was in effect in all 50 states.
Neutral: What Small Car Will You Be Buying?
You will have to buy a small car sooner rather than later. What car will you be buying, and why is it a Lotus?