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: President Trump Reportedly Suggests A 25-Cent-Per-Gallon Gas Tax
The U.S. government is in the middle of trying to revamp its infrastructure plan, and that means finding a way to raise money. CNN reports that, according to U.S. Democratic Sen. Tom Carper, Trump isn’t averse to considering a 25 cent increase of the gas tax, stating:
He said that he knew it was a difficult thing for legislators to support and said that he would support the leadership to do that and provide the political cover to do that...And he came back to that theme again and again and again.
Elaine Chao, the U.S. Transportation Secretary, also didn’t discount the idea of a gas tax, telling White House reporters:
The President has not declared anything out of bounds, so everything is on the table. The gas tax, like many of the other pay-fors that are being discussed, is not ideal...There are pros and cons. The gas tax has adverse impact, a very regressive impact, on the most vulnerable within our society; those who depend on jobs, who are hourly workers. So these are tough decisions, which is why, once again, we need to start the dialogue with the Congress, and so that we can address these issues on this very important point.
But U.S. Republican Sen. Jim Inhofe thinks the whole idea of a gas tax seems a lot more farfetched than what Carper may have suggested, with CNN quoting him as saying:
“He was not advocating that. He was looking at all the options,” Inhofe said. “All he said was we need to do something and that is still on the table.”
Asked if Trump offered political cover to lawmakers who supported a tax hike, Inhofe said he didn’t recall “that word being used.”
“I think that’s an exaggeration,” he said. “A combination of exaggeration and wishful thinking.”
So at this point, who knows if we’re going to see gas taxes go up for the first time since 1993, though it still seems like an option.
What we do know is that the proposal that the government showed on Monday involves turning $200 billion in federal investment into $1.5 trillion by “leveraging local and state tax dollars and private investment,” CNN says. This will likely lead to an increase in the number of road tolls, with the news site writing:
Carper said Trump also offered “full-throated support for an increase in user fees” for roads, highways, and bridges.
...While the administration has not explicitly laid out a plan for revenue, local governments will likely turn to tolls and other user fees if asked to come up with more of their own funding in order to win federal incentive grants.
One thing worth mentioning is that auto executives, especially Bob Lutz, have been advocating for a higher gas tax for years, in an effort to get people to actually want to buy fuel efficient cars, instead of the EPA’s fuel economy and emissions regulations forcing automakers to build cars that the market doesn’t want. But alas, Lutz’s dream may never become reality.
2nd Gear: J.D. Power Vehicle Dependability Results Are In
The J.D. Power Vehicle Dependability Study compares the number of reported problems (per 100 vehicles) of various automobiles during the first three years of ownership, and this year’s results are in.
Lexus, Porsche and Buick are at the top with 99, 100 and 116 problems reported per 100 vehicles, respectively, while Chrysler, Land Rover and Fiat remain at the bottom of the chart, with 211, 204 and 192 problems reported per 100 vehicles.
Automotive News highlights the changes for this year, which include Infiniti’s jump to number four after finishing in the bottom five last year, with 83 fewer problems per 100 vehicles reported in the 2018 study. Kia also saw a big jump, now sitting at fifth place with 23 fewer problems per 100 vehicles reported.
On the other end of the spectrum, the news site says Jaguar, Mercedes and Honda lost their top-10 spots for 2018, while Lincoln jumped into the top 10.
Overall, the average number of complaints dropped from 156 problems per 100 vehicles down to 142, for a 9 percent improvement over 2017, though the biggest issues still deal with infotainment, with Automotive News writing:
Echoing previous findings, J.D. Power said issues pertaining to audio, communications, entertainment and navigation systems yielded the highest number of complaints, with built-in voice recognition and built-in Bluetooth connectivity as the most common problems.
I guess I’d rather the biggest issues be infotainment-related than, say, transmission related. Still, it goes to show that human-machine interface engineers still have a long way to go.
3rd Gear: Does NHTSA Have What It Needs To Regulate Auto Safety?
At a hearing of the House Energy and Commerce Committee, members of the House questioned whether the National Highway Traffic Safety Administration is capable of doing its job, particularly as the idea of autonomous cars comes closer to reality, The Detroit News reports.
President Trump hasn’t nominated anyone to run NHTSA on a full-time basis, and the 2018 budget took a cut from the previous year, leading some to question how seriously the president takes the organization, with U.S. Democratic Rep. Frank Pallone from New Jersey, saying:
There are legit concerns that NHTSA is not prepared and is not keeping up with the quickly changing automotive industry...It’s troubling that NHTSA doesn’t have the resources, people or expertise it needs to fulfill its mandate. It’s also concerning that the administration clearly does not see this agency as a priority as we have yet to hear about a possible nomination for the role of NHTSA administrator.
He went on, highlighting some of NHTSA’s alleged deficiencies, saying:
Investigations by this committee have demonstrated how ill-prepared NHTSA is today. During this committee’s investigation of sudden intended acceleration, we learned that NHTSA did not have expertise in emerging technologies, with little to no electrical or software engineers on staff. Then during the ignition switch investigation, we found that NHTSA did understand the link between the power-mode status and the air bag system.”
The good news is that the proposed budget for 2019 is higher than this year’s, going up from about $905 million to $915 million. Current NHTSA administrator Heidi King defended her agency, saying:
NHTSA is acting on its mission of saving lives, preventing injuries and reducing economic costs.
...As the automotive transportation landscape is changing at a rapid pace, NHTSA is adapting our mission execution to assure safety while remaining in step with changing technology, addressing new and emerging risks, and encouraging industry innovation... Safety is, safety remains the Department of Transportation’s top priority.
Whether NHTSA is prepared for a world filled with self-driving EVs isn’t just going to be a political debate, it’s going to become very obvious in the coming years.
4th Gear: Workers At GM’s Plant In South Korea Protest After Closure Announcement
General Motors announced earlier this week that its plant in Gunsan, South Korea (which builds the Cruze and Orlando) is set to close by the end of May after only running at about 20 percent capacity for the past three years. Unsurprisingly, tensions in town located in southwestern region South Korea have risen, with Reuters reporting that plant workers wore “Solidarity, Fight” headbands while protesting against the closure on Wednesday, and threatening a strike. The news site quotes a top Korean union official, said described why 1,200 workers participated in the protest:
We can’t accept this. The company informed us about the closure plan, not asking for our opinion. It was already the end of the discussions... This is like a death sentence notice before the Lunar New Year holidays.
Chairwoman of the Gunsan city council helped paint a picture of what the loss of the approximately 2,000 factory jobs could do to the city of approximately 280,000, telling Reuters that one out of five people there rely on GM’s local operations, and saying to the news site:
Gunsan city worked really hard to rescue GM, buying GM cars produced from the factory. The whole town is now in panic.
GM has recently pulled out of a number of markets including Europe, Australia and South Africa as it focuses on profitability over sheer volume, and with the performance of its South Korean business waning, GM is making tough decisions on how to move forward in the country. For now, it has offered workers in South Korea a severance package, which Reuters describes, saying:
General Motors’ South Korean unit is offering workers three times their annual base salary, money for college tuition and more than $9,000 towards a new car as part of a voluntary redundancy plan at the troubled automaker.
But that’s not enough, with the union’s Gunsan branch saying its workers preparing to protest, possibly via a “sit-in rally” at the GM Korea headquarters.
5th Gear: Does It Make Sense For The President To Take Credit For GM’s Move In South Korea?
Speaking about GM’s plant closure, the Detroit Free Press has an article questioning whether the president’s claims that GM is moving back to the U.S. from Korea because of his policies have any merit. The news site mentions this quote by the president:
You don’t hear these things except for the fact that Trump became president. Believe me, you wouldn’t be hearing that. So they’re moving back from Korea to Detroit. … Also you saw Chrysler moving from Mexico to Michigan, and you have many other companies, they all want to be where the action is.
The gist of the story is that there’s no official plan to move GM jobs back to the U.S., and the reason for the plant closure apparently has everything to do with the business’s performance in that region, and not necessarily any of the current president’s policies. If you want to read about whether Trump’s bragging has merit, you can read the rest of the story here. Or don’t. Either way.
Reverse: Dale Sr. Finally Makes It Happen In Daytona
Neutral: Are You Down With A 25 Cent Gas Tax Hike?
It’s only 25 cents, right?