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 before I start searching for Porsche Cayenne Diesels again. (Mahogany Metallic, please. Also, I need the tow package.)
1st Gear: 3.0-Liter Volkswagen Diesel Owners Are One Step Closer To Relief
U.S. District Judge Charles Breyer granted final approval on two key pieces of relief for owners who were duped into buying a dirtier-than-advertised diesel Volkswagen Group product, reports Reuters:
A federal judge on Thursday granted final approval on an agreement for Volkswagen AG (VOWG_p.DE) to pay at least $1.22 billion to fix or buy back 80,000 3.0-liter vehicles in the United States linked to the German automaker’s diesel emissions cheating scandal.
At a court hearing in San Francisco, U.S. District Judge Charles Breyer also said he was granting final approval to German auto supplier Robert Bosch GmbH’s separate settlement, under which it will pay $327.5 million to U.S. VW diesel owners for its role in developing the engines.
While Bosch admitted no wrongdoing in its settlement, the supplier who helped develop the “test mode” Volkswagen used to deceive emissions tests is still forking out a considerable chunk of cash to those who bought affected cars.
Volkswagen, however, now has an approved plan to fix its 3.0-liter diesel cars, which include the Volkswagen Tourareg, the Porsche Cayenne and a number of larger Audis. You can read more about what goes into the proposed fix and buyback plan here.
Those opting for a fix will receive between $7,000 and $16,000 in compensation if the emissions fixes are approved by regulators in a timely fashion, per Reuters. However, if regulators don’t okay the fix for all 80,000 3.0-liter diesels, Volkswagen could be on the hook for $4.04 billion instead.
This comes on top of the $14.7 billion settlement over the 475,000 2.0-liter diesels sold in the United States. The current running total that Volkswagen is having to spend to appease American regulators, owners, states and dealers will reach up to $25 billion, and they still have more to go, as Reuters notes:
VW still faces outstanding suits from U.S. bondholders, other investors and suits alleging excess carbon dioxide emissions with gasoline-powered Audi vehicles.
Dieselgate just never seems to end, does it?
2nd Gear: Malaise-Era Protectionist Policy Architect Confirmed As U.S. Trade Representative
Hey, kids! Do you like protectionist policies that have historically produced crappy cars? No? Well, that’s what you’re going to get anyway. The brains behind the not-so-voluntary Voluntary Export Restrictions of the 1980s, Robert Lighthizer, was confirmed by the United States Senate with an 82-16 vote as the new U.S. Trade Representative, reports Automotive News.
The confirmation of Lighthizer will allow the Trump administration to move faster on its “America First” trade agenda, which may include sweeping changes to import-export rules and renegotiations of existing treaties.
Lighthizer’s confirmation wasn’t without controversy. He required a waiver before he could be confirmed for representing the Brazilian government as a trade attorney, as Automotive News reports:
Committee investigators discovered Lighthizer represented the Brazilian government 30 years ago in a trade dispute with U.S. ethanol producers, potentially disqualifying him from becoming the top U.S. trade official. Under a law passed in the 1990s, no one who has represented a foreign government in a trade dispute or negotiations against the U.S. can head the trade representative’s office.
Lest we forget, policies like Lighthizer’s 1980s voluntary export restrictions (which limited foreign imports under threat of high tariffs) later merited a ban from the World Trade Organization. Either way, if you want to buy a foreign car, sooner is probably better than later—unless you want to wait 4 to 8 years for things to change again.
3rd Gear: Hyundai And Kia Issue Big Recalls At Home After Whistleblower Report
South Korea is forcing Hyundai and its sister-brand Kia to recall 240,000 vehicles over a safety defect pointed out by a whistleblower’s report, per Reuters. Twelve models are affected by the recall, including the Genesis, Santa Fe, Elantra and Sonata.
The recalls cover five of the 32 alleged problems noted by whistleblower Kim Gwang-ho, who worked as an engineer for Hyundai for 26 years. One of the problems relate to the parking brake warning light. South Korea’s transport ministry also asked prosecutors in Seoul to investigate whether the brands covered up the five defects. (Hyundai denies that there was any cover-up.)
This is the first time South Korea’s transport ministry has issued a compulsory recall, but the two marques ignored a voluntary recall request over the issue already, arguing that the flaws were not dangerous. This is also the first major whistleblower case to hit the South Korean auto industry.
This certainly doesn’t help the brands’ image at home, where they face consumer criticism over internal quality control issues, pricing and options offered in their home market. Despite this, Hyundai and Kia still make up two-thirds of the South Korean auto market.
4th Gear: Opel To Peugeot Is A Go-Go
Shareholders of Peugeot’s parent company PSA Group approved the financial plans for the $2.3 billion acquisition of General Motors’ European operations, which include the Opel and Vauxhall brands, reports the Detroit Free Press. This will make the PSA Group Europe’s second largest automaker behind the Volkswagen Group.
PSA Group head Carlos Tavares still doesn’t expect Opel to turn a profit right away, though. The marque hasn’t made a full-year profit since 1999. But it’s a start, and maybe their sale to the French is just what they needed.
5th Gear: America’s Uncertain Policy Future Is Making It Tough For Automakers To Know What To Do Next In North America
China’s Great Wall Motor Company wants to build a plant in Mexico or the United States, but plans to do so are up in the air for the time being thanks to the Trump administration’s unpredictable ways. Reuters explains:
Reuters reported last month Great Wall, which says it is China’s largest SUV and pickup maker, was eyeing an auto plant in two Mexican states hit by U.S. President Donald Trump’s drive to make American companies invest at home.
The carmaker’s chairman Wei Jianjun said the firm had looked at three possible states in Mexico and two states in the United States. He added that significant shifts in U.S. policy were having a large impact on the plans for the plant.
“Our plans to go to the American market haven’t changed,” he told reporters on the sidelines of a conference in Shanghai. “First we want to see how things work and then make a decision.”
Great Wall wants to increase their global sales from 20,000-30,000 cars a year to 100,000 by 2020. That will, of course, mean increasing its production, with the addition of plants planned in Russia and North America.
However, they’re stuck in a stalemate now, wholly dependent on how trade issues between China, Mexico and the United States play out. Which is anyone’s guess.
Reverse: Keep An Eye On That A.J. Foyt Kid, He’s Goin’ Places
Neutral: What happens now?
If Lighthizer and Friends limit auto imports again into the United States, do you think American automakers will start to produce globally uncompetitive cars again? Or are our own automakers so global in reach now that it won’t matter?