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: Criminal Charges Coming Against Volkswagen’s People
We haven’t seen much by the way of actual, personal, criminal consequences for Volkswagen executives, but the first round of charges coming down the pipe might not be for who you think it is, nor from who you think they would be. From the Wall Street Journal:
South Korea’s Ministry of Environment is turning up the heat on Volkswagen AG over its emissions scandal, saying the car maker’s local unit and its chief will be brought up on criminal charges.
Rejecting the company’s recall plans, the ministry said Tuesday it would file criminal complaints against Audi Volkswagen Korea and Managing Director Johannes Thammer with the Seoul Central Prosecutor’s Office later in the day.
The Ministry went on to say that VW’s plans, as presented by Thammer, were “insuffucient and lacked key information, and are thus unacceptable.”
Under Korean law, a problem such as this one must not only be explained, but the problem must have a clear solution in a reasonable amount of time, which sounds like a very reasonable thing to do. In this case, the government isn’t satisfied, so it looks like Thammer might be in a bit of water.
There’s no word yet on whether nearly every other government in the world also plans on filing charges against anyone from VW.
2nd Gear: Volkswagen Just Snagged Two Former FBI Chiefs
In only somewhat related news, VW has reportedly hired a former head of the Federal Bureau of Investigation to help out with the inevitable tidal wave of coming settlements with owners of its illegal diesels, with another appointed by the court. The court-appointed one is Robert S. Mueller III, who served as Director of the FBI for over ten years during the George W. Bush and Barack Obama administrations, according to Reuters:
Robert S. Mueller, a Washington lawyer, was named as “settlement master” in the lawsuits by U.S. District Judge Charles Breyer, who oversees the cases.
Breyer announced his intent on Jan. 11 to name Mueller to “use his considerable experience and judgment to facilitate settlement discussions among the various parties in these complex matters.”
The other, Sueddeutsche Zeitung reports , is Louis Freeh, who was FBI director during the 1990s.
If VW’s going to fight, it’s bringing the big guns.
UPDATE: It turns out that Mueller was appointed by the court, and only Freeh was hired by Volkswagen. The post has been corrected to reflect that.
3rd Gear: But We’ll Always Have Electrics?
If not diesels, then we’ll always have electric cars, right? Unfortunately, that hasn’t really been the case, either. Since the beginning of the Obama administration in 2008, only 400,000 electric cars have been sold. That might sound like a lot, but President Obama wanted a million new electric cars during his administration. Again, via Reuters:
Last year, sales fell 6 percent over the previous year, to about 115,000, despite the industry offering about 30 plug-in models, often at deep discounts.
The issues here are many-fold. On the one hand, electric cars are a tougher sell in the world of cheap gasoline. On the other, automakers are still developing electric cars because of government mandates. But the government isn’t mandating electric cars because of some wild-eyed fascination with bolts of lightning shooting through the air, it’s because A) electric cars are generally cleaner than gasoline-powered cars and B) cars take around five years to develop – if you wait for high gas prices to hit before developing your electric car, like automakers stupidly tend to do, then you’re left with nothing to sell when there is a sudden spike.
(Gas prices nationally are around $2 a gallon, but it wasn’t long ago that they were nearly double that, is what I’m saying.)
Add in that automakers aren’t necessarily making electric cars that people actually want, not because the cars are electric, but because they’re just bland, boring cars, and you have a typical automotive industry problem.
But if you decide to make an electric car that people do actually want, like Tesla, you’ll see that there’s so much demand that a waiting list builds up.
What I’m saying is, electric cars can be fun and great too. But only if the auto industry decides to make fun and great electric cars.
4th Gear: We Need To Talk About FCA
It’s not that Fiat Chrysler Automobiles is doing anything illegal, for once in an automaker’s life. It’s that it’s really almost failing, and of course, it’s almost failing at emissions. Via Bloomberg:
FCA’s problem is that its emissions record in the U.S. is bad and time to fix it is running short.
For the fourth consecutive year, the maker of Ram pickups and Jeep sport utility vehicles finished dead last in a 2014 Environmental Protection Agency ranking of carbon-dioxide emissions among big auto manufacturers. And the agency plans to accelerate its CO2 targets sharply beginning next year.
FCA makes a huge chunk of its money on Ram pickups and Jeeps, which is great, but it doesn’t sell a lot of many other things, especially other things that are small and fuel efficient. Toyota has the Prius, BMW has hybrids, diesels, and Mini, and Lotus has all of Lotus, but small Chryslers and hybrids are few and far between.
Sure, there’s the Fiat 500, and the Dart, and you should be able to plug the new Pacifica minivan in, but those are just starts. Since breaking free of first the Germans and then private equity, Chrysler hasn’t had the time or the money to devote towards researching much fuel efficiency.
I’m sure they’ll get there, somehow. Maybe.
5th Gear: Oil’s Getting Even Cheaper
The price of a barrel of oil just slid down to below $28 a barrel. You won’t see all of that savings at the pump – the oil still has to be refined and transported, which is expensive – but gas is damn cheap and getting cheaper.
So while FCA is still pumping out Hellcats, now is the time to buy one.
Hellcats for everyone is always good in our book. You know, until the next oil spike. But by then, we’ll all be driving Hellcats through the Australian wasteland anyways.
Reverse: GM Buys Oakland!
You might know Oakland by another name today, but you still can’t buy a new one:
Oakland Motor Car was founded in 1907 in Pontiac, Michigan, by Edward Murphy, a manufacturer of horse-drawn carriages. The following year, another former buggy company executive, William Durant, founded General Motors in Flint, Michigan, as a holding company for the Buick Motor Company. GM soon bought other automakers, including Oldsmobile and Cadillac. In 1909, Oakland became part of GM. The first Pontiac model made its debut as part of the Oakland line in the 1920s. The car, which featured a six-cylinder engine, proved so popular that the Oakland name was eventually dropped and Pontiac became its own GM division by the early 1930s.
Neutral: A common myth among automakers is that people don’t want electric cars, but more likely is that people don’t want crappy electric cars. What other myths do you think automakers are holding on to?
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