Everyone who loves a good Lexus can breathe a sigh of relief, the merger of Fiat Chrysler and Peugeot may get a bit bumpy, and California stands its ground. All that and more in the Morning Shift for November 19, 2019.
President Donald Trump was seemingly obsessed with imposing tariffs on “foreign cars” for months, as the automotive industry fretted nervously. After all, the traditional concept of what is and is not a “foreign car” is about as relevant these days as the traditional concept of riding around in a steam locomotive. Hellcats are built in Canada, and the American car factory with the largest number of exports is churning out vehicles with BMW badges.
I know, I know, it’s a little unclear whether or not the legal system applies to him as it would to normal, non-sodium humans, but let’s assume, for a minute, the fantasy that it does. And in the fantastical world where laws actually mean something, Reuters reports that Trump is no longer legally allowed to impose tariffs on foreign-built cars, thanks to some laws from the 1960s:
Trump took no action last Thursday as a deadline to impose the national security tariffs of up to 25% on automotive imports from the European Union, Japan or South Korea expired.
Automakers had expected another delay in Trump’s tariff decision as his administration pursues broader trade negotiations with the European Union and Japan.
In May, Trump invoked a six-month negotiating period under Section 232 of the Trade Expansion Act of 1962, a law aimed at protecting the U.S. Cold War-era defense industrial base. He has hailed the threat of tariffs as a strong negotiating tool to gain leverage over his opponents.
Since it’s been six months since the Trump administration officially started “negotiating” on whatever “tariffs” there “may or may not be” on the automotive industry, the law would seem to support the notion that the industry—and really, the car-buying public, which would end up bearing the vast burden of any tariffs—is in the clear.
Though maybe they were in the clear this whole time. It’s been a while since Trump has said anything about tariffs, with the last major noise coming over the summer. He probably got bored.
Speaking of our dear president, he’s currently beefing with the state of California, again, for reasons that are entirely unclear. But if you’re just catching up, the exceptionally broad overview is that, for ever-changing reasons (Trump’s own basis keeps changing, and no matter the excuses they don’t seem to follow any sort of logic), the Trump administration decided to roll back the Obama administration’s emissions targets for the next couple of years. You know what I’m talking about, the emissions targets that everyone—the federal government, state governments, the entirety of everyone that sells cars in the United States—already agreed to. To change them now would really just induce chaos.
So, California, which can set its own emissions regulations under an agreement with the federal government dating back to the 1970s and which 13 other states adhere to, put its foot down. It said that it was going to stick with the plan, believing that stability is good for business, good for consumers, and good for the environment.
Some manufacturers ended up siding with California, saying that they had already started developing vehicles for the new rules, and some ended up siding with the Trump administration. Trump made some noise about how California can’t set its own rules anymore (because, again, laws are merely trivialities meant to be ignored), and that’s sort of where the 5-D chessboard was as of this morning.
And now California is firing back, announcing that the state government will no longer buy vehicles from General Motors, Fiat Chrysler, or Toyota, since those states have chosen not to recognize California’s authority in setting its own emissions rules, according to Automotive News. And the state buys a heck of a lot of cars, it turns out:
Between 2016 and 2018, California purchased $58.6 million in vehicles from General Motors, $55.8 million from Fiat Chrysler, $10.6 million from Toyota and $9 million from Nissan.
Things were better a few years ago.
Peugeot and Fiat Chrysler Automobiles have largely agreed to merge, but there’s still a lot of moving pieces that can sink the deal. The biggest obstacle could be the consent of the unions, which represent the workers that actually build the cars that these massive conglomerates sell, but the trickiest union (the French one) seems to be supportive, Automotive News says:
The majority of unions representing workers at Peugeot maker PSA are in favor of a planned $50 billion merger with Fiat Chrysler, PSA executives and union representatives said.
However, the unions said that once the merger deal was signed, they would be seeking detailed information about the plans for the combined company.
At a PSA works council meeting, all trade union representatives on the council voted to give a favorable opinion on the merger.
Well! That’s good! I don’t think there are any more wrenches that can be thrown in this deal, especially no other big unions that could possibly
Ah. I see. It’s not that FCA’s unions don’t care for a merger with PSA, but rather that FCA has been making tons of money lately, and the workers making that actually happen want a piece of that ever-larger pie, Bloomberg reports:
Fiat Chrysler Automobiles NV, the Italian-American automaker in the midst of merger talks, has little room to maneuver in negotiations with the United Auto Workers union that’s turned its attention to the company after securing new contracts with its U.S. rivals.
The UAW won’t want to hear pleas of poverty from a company that just forecast record profit and is mapping out a plan to join forces with France’s PSA Group. And whereas Ford Motor Co. had an easy time getting a deal done with the union, Fiat Chrysler faces risk of a General Motors Co.-style walkout unless it agrees to concessions that compromise its plum position as the Detroit carmaker with the lowest labor costs.
The United Auto Workers is in a sweet bargaining position here, considering that the FCA negotiations are the last of the Big Three automakers this year, FCA made a ton of money, and FCA almost certainly wants nothing but the highest plane of labor peace and serenity going into its merger with PSA.
We wish everyone lots of luck and a fair contract.
According to rumors that we’ve never really been able to nail down with hard evidence, drug use is fairly prevalent among auto workers throughout the world. That shouldn’t be surprising, as drug use is also fairly prevalent among humans throughout the world. But in a very tiny move towards helping workers struggling with substance abuse, Ford is making a contribution towards fighting addiction, according to Automotive News:
Ford Motor Co. has agreed to invest up to $250,000 toward helping to find treatments for opioid addiction, a growing problem at many auto plants.
The automaker committed as part of its proposed contract with the UAW to formalizing an experimental pilot program started by union leaders at two Ford assembly plants in Kentucky to treat the symptoms of opioid withdrawal.
Combating addiction is great! But $250,000 is pretty paltry, don’t you think? That’s probably the salary of, like, one upper-mid-level marketing executive. But at least the salve is therapeutic, rather than punitive.
George Eyston in the enormous 7-ton 73 litre twin Rolls Royce aeroengined Thunderbolt, established a new world land speed record of 311.42 mph (502 km/h) on the Bonneville Salts Flats in Utah.
If there was one (1) automotive law you could ignore, which would it be? I’m claiming the 25-year import rule, just so I could drive around in my Alpine everywhere I go.