Among Other Things Trump's Infrastructure Order Will Burn Money

Photo: AP
Photo: AP

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, so listen up.


1st Gear: Before We Raise $1 Trillion For Infrastructure We Must Burn Cash

Hey, there! Busy day yesterday, eh? Between the work commutes and the president’s forceful support of the “very fine” people who marched with white supremacists and neo-Nazis in Virginia over the weekend, I almost forgot that yesterday was a Big Infrastructure Day. Woo.

We’ve been waiting for this!

So, I’m sure you’re wondering, how’s U.S. President Donald Trump going to find $1 trillion to overhaul our infrastructure? Uh, I—still—couldn’t tell you. But the president did sign an executive order for infrastructure yesterday that’ll definitely make it harder to find some of that necessary cash.

Here’s how The New York Times winds it up:

President Trump announced on Tuesday that he had signed a sweeping executive order to eliminate and streamline some permitting regulations and to speed construction of roads, bridges and pipelines, declaring that the moves would fix a “badly broken” infrastructure system in America and bring manufacturing jobs back to the country.


Voila! Permits, streamlined; roads, fixed. Here’s another fun part:

Rolling back the Federal Flood Risk Management Standard, established by Mr. Obama in an executive order in 2015, is the latest effort by the Trump administration to unravel the former president’s climate change agenda. Building trade groups and Republican lawmakers had criticized the rule as costly and overly burdensome.

But environmental activists, flood plain managers and some conservatives had urged the Trump administration to preserve it, arguing that it protected critical infrastructure and taxpayer dollars.


If you peel away the people aggrieved in the second paragraph—environmental activists, flood plain managers, and even some conservatives!—you’re left with a basic fact of what Trump’s order does: it effectively burns money. This isn’t an argument.

Obama’s order, according to the Times, provided federal agencies with three options to flood-proof new infrastructure: use the best climate change science around to dictate how to build stuff; require roads and railways to be built even higher, above the national 100-year flood elevation standard; or build infrastructure to “at least the 500-year flood plain.”


That’s what Trump rescinded yesterday. That is to say Trump is giving the go-ahead to build new infrastructure that is more prone to floods. Very logical. The best logic around.

2nd Gear: Subprime Loans Performing ... Bad

Regardless of your view—humans are born with an innate understanding of the intricacies of complex financial transactions, so if they obtain a loan with terrible terms they’re obviously an idiot; or, sometimes people are desperate, while others simply make mistakes—subprime auto loans are continuing to deteriorate, according to Bloomberg. In particular, it’s the section of folks considered “deep” subprime that are seeing the worst of things.


During the last quarter, one analyst who spoke to Bloomberg said that borrowers with shoddy credit started showing “the kinds of late payment profiles that accompanied the start of the financial crisis.” Uh oh.

“We’re seeing an increase in delinquencies across all credit scores, but in the highest credit quality, it’s just a basis point or two,” Chief Economist Amy Crews Cutts said in an email Tuesday. “In deep subprime, the rise is more substantial. What stood out to me was the issuers. Those that have been doing this for a decade or more were showing the ‘better’ performance, while those that were relative newcomers were in the ‘worse’ category.”

The reason for the increase, she posited, is that lenders have loosened underwriting requirements as more firms tap into a declining market for car loans, not that there are more customers with worsening credit profiles.


This is no good.

3rd Gear: Geely Kicking Ass

Geely’s profits are soaring, and it’s riding high thanks to Volvo, reports Reuters.

Although known at one point more for its copycat designs and lower quality vehicles, the Hangzhou-based firm has transformed itself into an automaker with up-market aspirations.

Vehicles engineered with Volvo know-how, such as the GC9 sedan and the Boyue sport-utility vehicle, have been hot-sellers in China, the world’s biggest auto market.

“So far in 2017, the group’s performance has exceeded management’s original expectations despite a generally weaker market in China during the same period,” the company said in a statement to the Hong Kong bourse.


Geely’s net profit jumped a whopping 128 percent this year compared to the same quarter in 2016. I’m still wondering why the company bought Terrafugia, though.

4th Gear: No FCA For Geely

Sergio Marchionne, for years, has made it seem like he’d merge with anyone down to the auto startup you run out of your parent’s garage. That’s what made a report from Automotive News this week so interesting. Someone wants to buy Fiat Chrysler! Several unnamed Chinese automakers are seeking out a “turnkey” operation, according to the report, and one of them is Geely.


Not so, Geely says. Here’s what Reuters says:

Geely Automobile said it has no plan to buy Fiat Chrysler, denying an Automotive News report that the company was one of the Chinese suitors for the Italian automaker.

Gui Shengyue, executive director of Geely Automobile, said on the sidelines of an earnings conference when asked if he was interested in Fiat: “We don’t have such a plan at the moment.”


“At the moment.” Hm. Sounds like Geely execs have toyed with the idea at least.

5th Gear: NAFTA Talks Begin

It always felt like an open question whether Trump planned to outright leave the North American Free Trade Agreement, or if it was all a silly little bluff. But he eventually moved forward with opening renegotiations of the deal—it’s wildly unclear as to how far his administration wants to take things—and now those talks are beginning today, according to Reuters, with negotiators saying they’re looking to be “ambitious” in the first round.”

“We are actually going to be quite ambitious in this first round,” the [U.S. Trade Representative] official said, without elaborating on specifics on any of the proposals.

The official, speaking on condition of anonymity, said the aim of the United States was to get a “more balanced, reciprocal trade agreement that supports high-paying jobs for Americans and grows the U.S. economy.”


Particularly, auto execs don’t want the U.S. to tighten the pact’s rules of origin. The anonymous official suggested that’s still on the table, saying the nation’s looking to do “more to incentivize and create more manufacturing and more manufacturing jobs in the United States,” according to Reuters.

The talks are going to be interesting to follow.

Reverse: DeLorean Drives Away Clean


Neutral: Infrastructure

I don’t know about you, but I’m eagerly awaiting the rollout of this $1 trillion infrastructure proposal. Any shitty road in mind you’d like to see overhauled?

Senior Reporter, Jalopnik/Special Projects Desk



I don’t know about you, but I’m eagerly awaiting the rollout of this $1 trillion infrastructure proposal. Any shitty road in mind you’d like to see overhauled?

It would be great to get I-90 from Albany, NY to Buffalo, NY bumped out to 6 lanes from the current 4. All it takes is one Subaru or Prius in the passing lane to do 66mph to gum it up for miles. It just cant handle the traffic flow 60 years later. It is a toll road so you think that the money would be there to do it, but it isn’t.