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: Embattled Airbag Supplier Takata Plans To File For Bankruptcy
The supplier is expected to seek protection in its home country first, with its U.S. subsidiary filing for Chapter 11 bankruptcy shortly thereafter, according to a person familiar with the matter, who asked not to identified because the matter isn’t public and the timing could change. Trading on Takata shares were suspended by Tokyo Stock Exchange from 8:20 a.m. to confirm the authenticity of media reports, the exchange said on its website.
Bankruptcy also puts Takata one step closer to a likely sale to American airbag maker Key Safety Systems, who a Takata steering committee recommended as their preferred bidder. Restructuring the struggling company will be costly, hence the need for a sale.
This isn’t too surprising given that the company accepted a settlement that would cost them $1 billion when they pled guilty to fraud over the defective airbags in February. Faulty Takata airbag inflators were linked to at least 17 deaths worldwide, and the company has had to replace over 100 million defective airbags worldwide.
Here’s your ever-so-often reminder, just in case anyone’s putting it off: if you have an outstanding recall on your call, get that hot mess fixed right now.
2nd Gear: California Cracks Down On How VW Spends Its Dieselgate Funds
California will benefit from $800 million of the $2 billion Volkswagen must spend to support clean vehicles to as part of their reparations for Dieselgate. However, Volkswagen unit Electrify America’s plan for the first chunk of that didn’t please California legislators, reports Reuters:
Volkswagen proposed spending $120 million on more than 400 highways and community EV charging stations by 2019, often in high-traffic areas where rivals hoped to set up commercial stations.
So, California legislators passed a bill that would force Volkswagen to spend more of these clean car funds in disadvantaged communities. There, infrastructure often lags behind high traffic areas and, more notably, Volkswagen wouldn’t have as much of an opportunity to profit from being the first company with charging facilities in a high-traffic area. Reuters writes:
The bill passed on Thursday by both chambers of the state legislature raised that pressure by instructing the Air Resources Board to “ensure to the maximum extent allowable” that at least 35 percent of investment funds go to low-income and disadvantaged communities and requiring the board’s directors approve all VW plans at public hearings.
It’s a wise move on California’s part, given that a lack of access to charging areas can be a significant barrier to entry for consumers who might otherwise be interested in electric cars. Poorer communities are also disproportionately affected by air pollution, notes Reuters.
The bill was passed as part of a budget agreement with Governor Jerry Brown, who has yet to sign it into law but who says he supports the budget package that contains the extra crackdown on Volkswagen’s spending.
3rd Gear: Proposal Wants To Bar States From Regulating Autonomous Cars
Republicans in the House Of Representatives want to bar states from setting their own rules on the testing and design of autonomous cars, per proposed legislation obtained by Automotive News. Additionally, the proposal would bar federal regulators from demanding review and approval before such technology is put into use.
Automotive News explains that it’s a big win for companies such as General Motors, Tesla, Waymo who want to develop and sell autonomous cars with as little regulatory pushback as possible. But, of course, it’s not so much of a win for anyone concerned about unproven technologies being unleashed on our public roads, or the states who feel it’s best for their own people to regulate self-driving cars more heavily.
The federal National Highway Traffic Safety Administration would become the primary agency to regulate self-driving cars in the 45-page draft package of 14 proposed bills. The proposal would still allow states to set insurance and registration rules for those cars so long as they didn’t use those rules to regulate autonomous technology.
Parts of the proposal would exempt large numbers of vehicles from existing safety rules, and potentially make a disturbing amount of information about self-driving cars confidential, writes Automotive News:
One of the bills in the proposal would allow the U.S. Transportation Department to exempt up to 100,000 vehicles per year from U.S. federal motor vehicle safety rules, which currently prevent the sale of self-driving vehicles without steering wheels, pedals and other human controls.
Another would declare crash data, other testing and validation reports from automated cars turned over to U.S. regulators to be “confidential business information.”
But it’s not just the House at work. A bipartisan trio of senators is working on a similar proposal in the Senate to remove regulatory roadblocks to the development of autonomous cars. What could possibly go wrong?
4th Gear: Euro Cars Bounce Back
European car sales have rose 7.7 percent in May with nearly all manufacturers reporting increases in sales, reports Reuters. This finally brings sales back to a level nearly to those before the big worldwide economic crisis. Reuters writes:
“In volume terms, this result comes close to May 2007 levels, just before the economic crisis hit the auto industry,” the industry group said in a statement.
European car sales returned to annual growth in 2014 after a six-year slump during which registrations fell to their lowest in decades. Demand has been growing most months since, as an improvement in consumer confidence, retail incentives and new product launches lured customers back to the showrooms.
New passenger car registrations in the European Union and European Free Trade Association rose to 1.43 million vehicles last month, the Association of European Carmakers told Reuters. Suzuki and Toyota had the biggest bumps in sales, followed by Daimler.
Bloomberg credits a rosier economic outlook and political stability in France for the bump in sales. Thanks for not electing Le Pen, you guys. It’s about time we heard some good news from somewhere.
5th Gear: Bernie Ecclestone Wouldn’t Be Doing This, That’s For Sure
The official starter for this year’s 85th running of the 24 Hours of Le Mans is none other than Formula One’s new executive chairman and CEO Chase Carey.
This comes just a year after Formula One double-booked a regular-season grand prix in Baku right over the end of the 24 Hours of Le Mans. F1's previous head honcho Bernie Ecclestone was notoriously hostile to any other series that might steal the spotlight away from F1, so Carey being involved in any way is a positive sign.
Automobile Club de l’Ouest (ACO) president Pierre Fillon released the following statement on the choice of Carey to start this year’s race:
The ACO has always been strongly attached to the passion for endurance racing, its history and above all to the fans, the people who make the discipline what it is. With Chase Carey as head of Formula One, the time has come to work together on the sporting calendar, to ensure fans can follow the Grand Prix and endurance racing seasons and enjoy both disciplines to the full.
The ACO is the group which hosts Le Mans, so needless to say, this is promising news! The Indianapolis 500 got a ton of buzz for Fernando Alonso’s attempt at the big race this year, so hopefully this means F1 is down to have its drivers run at Le Mans more often, too—or at least won’t try to make its schedule run crazy over all other kinds of motor racing.
Reverse: Ford Is Officially A Company
Neutral: How should Volkswagen should atone for Dieselgate?
Volkswagen has to spend some of its cash on clean driving technology, so how do you think they should spend it? What would be the best use of those funds?