A Honda fuel cell car for California, photographed being inspected by journalists in 1996. Progress is slow in the car world.
A Honda fuel cell car for California, photographed being inspected by journalists in 1996. Progress is slow in the car world.
Photo: Getty Images
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The Trump administration is dropping its antitrust probe against Ford, Honda, Volkswagen, and BMW for working with California regulators on emissions standards. It’s the end of a very inane drama, but it’s still incredibly frustrating. All that and more in The Morning Shift for Tuesday February 11, 2020.

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1st Gear: Before I Get Into That, Some Daimler Follow Up

OK, normally I should be leading with the main news here but I just want to put a bit into context of how annoying the world of emissions regulations is. The whole idea is that governments force automakers to be more clean with ever-tightening standards for how much of certain pollutants can come out of their exhaust pipes. What happens when you break the rules and cheat? Look at Daimler, parent company to Mercedes-Benz, which is reckoning for its own diesel emissions testing manipulation. Yesterday we noted that it’s looking to cut up to 15,000 jobs, and today it’s out that profits are down 60 percent, as the Financial Times reports:

Daimler suffered its worst annual performance in a decade last year as it was forced to set aside billions of euros in “Dieselgate” litigation costs, compounding its struggle to fund a late move into electric vehicles.

The German carmaker on Tuesday reported a more than 60 per cent fall in earnings in 2019 as net profits at the Mercedes-Benz parent dropped to €2.7bn last year from €7.6bn in 2018, despite sales remaining at roughly the same level.

The lacklustre results prompted the company to propose slashing its annual dividend to just 90 cents per share, down from €3.25 in 2019. 

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On the one hand, this is a sign of what a functioning regulatory apparatus looks like. The cheater is getting fined, in this case to the tune of €4bn, per the FT.

On the other hand, Mercedes is still cranking out twin-turbo V8 G-class bricks (to pick on one particularly pointless gas-burner) completely legally, and for the most part the auto industry is still chugging away as business as usual. Our means of regulation are less about changing the industry as a whole so much as making sure that everyone is playing by the rules. Weak rules.

2nd Gear: Trump’s Antitrust Threat Fizzles

Back to the main action, with that bit of context provided that while we’re talking about making change here, we’re not talking about completely overhauling this industry like we should. The bar is low. Alright, the Trump admin has dropped its “probe” into Ford, Honda, Volkswagen, and BMW, which were just working with California regulators to stick with California’s own emission standards, as the Associated Press reports:

The Justice Department’s investigation, which started last fall, had aimed to determine whether antitrust laws were violated by Ford, Honda, Volkswagen and BMW in reaching the July deal with California. Under the deal, the automakers planned to comply with pollution and related mileage requirements established by California that are tougher than the federal standards sought by President Donald Trump.

The Justice Department didn’t find conduct violating the law and has closed the investigation, a person familiar with the matter told The Associated Press on Friday. The person spoke on condition of anonymity because they weren’t authorized to speak publicly.

In September, the administration revoked California’s authority to set auto mileage standards, asserting that only the federal government has the power to regulate greenhouse gas emissions and fuel economy. Top California officials and environmental groups took legal action to stop the rollback.

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Once more, the bar is extremely low here, and even keeping the pretty low-key California regs in effect is a challenge.

That’s the frustrating part, though it’s also frustrating how desperately we need some actual antitrust work done on the tech giants like Facebook and Amazon.

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3rd Gear: Trump Eyes Another Trade War Ahead Of Election

Maybe it’s unfair to highlight that Trump is looking to restructure a trade deal with the EU in an election year. I’m sure he is just, uh, very concerned with getting potential Mercedes-Benz lessees a fair deal.

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As Reuters reports:

An emboldened President Donald Trump has set his sights on restructuring the more than $1 trillion U.S. trade relationship with the European Union, raising the spectre of another major trade war as the global economy slows and he seeks re-election.

Trump, who recently signed a Phase 1 trade deal that cooled a bitter trade war with China, has called the EU’s position on trade “worse than China” and threatened to impose tariffs on its cars and other products.

European officials say they’re willing to work with Trump to address some irritants in the relationship, but they warn that they’ll retaliate against any U.S. efforts to punish the trading bloc.

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This is particularly dumb as every time trade war threats pop up, nothing meaningful ever gets done. I’d be fine with some international agitation if it accomplished something, like boosting our domestic industry

4th Gear: Coronavirus Is Getting Complicated As Some Automakers Restart Production

Reuters reports today that “China’s Xi warned officials that efforts to contain coronavirus outbreak could hurt economy,” a story detailing how Beijing is trying to “soften” the containment of the virus. It feels especially strange to type given that I finally watched Bong Joon-Ho’s The Host last night.

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Also in today’s news is that a number of carmakers are restarting production in China, from Tesla in Shanghai as Bloomberg reports to GM as the Detroit Free Press reports to, well, it’s a lot actually. The Japan Times names Suzuki’s motorcycle operations as already starting, with Honda, Toyota, Mitsubishi, Nissan, Mazda, and Isuzu either finding alternatives or inspecting equipment for returns to come.

5th Gear: GM Shows The Mid-Engine Corvettes It Didn’t Make

In a rare moment of candor, the General put up an entire display to the history of all the mid-engine Corvettes that weren’t, all the way up to and including engine covers for the four-rotor mid-engine design that the first Oil Crisis killed off. The Freep has a full gallery you should check out of the display at the Warren Tech Center. If it were me, though, and I was in Detroit, I’d be busting down the door to see it in person myself.

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Reverse: Japan Expands Past World Stage Into Interplanetary Stage

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Neutral: What Should Car Regulations Look Like Today?

What we have today, on a global scale, is clearly not enough. But outright banning cars tomorrow is also a fool’s errand. I would love to see vast investment in public transit before I see incredibly strict emissions standards, but I wonder what comprehensive plan you might enact if you had the power, on a state level, on the federal level, or working in atop another regulatory body.

Raphael Orlove is features editor for Jalopnik.

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