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: The VW Fix
The number one question I get in emails and comments from Volkswagen TDI owners is this: “How are they going to fix my car?” While the fix is likely to involve reduced performance and/or fuel economy, it could be as simple as a software update, retrofit the hardware, or on the very extreme side, involve replacing the cars entirely.
Officially, VW has not decided on how to fix this or what they will do yet, but Bloomberg reports on what options they’re looking at:
Swapping out the affected models for new ones is the most extreme in a range of options the carmaker is discussing ahead of talks with regulators around the world, including an Oct. 7 deadline to present a plan in Germany, people familiar with the plans said.
Other possibilities include installing bigger catalytic converters to store and neutralize harmful emissions, said the people, who asked not to be identified because the plans aren’t final.
Cost estimates of the alternatives range from as little as 20 euros ($22) to as much as 10,000 euros a car, one of the people said. The solution will probably vary from regulator to regulator, meaning this week’s German plan will not necessarily apply elsewhere, a source said.
I think an outright replacement of all these cars is probably unlikely, but as Bloomberg notes some of the older and smaller diesel engines will be harder to retrofit. In the meantime, regulators and owners alike are demanding the announcement of a solution from Volkswagen.
2nd Gear: VW To See ‘Massive Cutbacks’
To prepare for the cost of fixing these cars, plus lawsuits, criminal cases, potential buybacks and a likely decline in sales, expect a much more austere Volkswagen from here on out. Here’s new CEO Matthias Mueller, quoted in Reuters:
“We will review all planned investments, and what isn’t absolutely vital will be canceled or delayed,” Mueller told some 20,000 employees at the company’s headquarters in Wolfsburg, Germany, today, according to an e-mailed statement of his remarks. “And that’s why we will re-adjust our efficiency program. I will be completely clear: this won’t be painless.”
VW’s R&D costs are higher than Ford and General Motors combined. Expect that to get scaled down, and I would infer this to be the death knell for their Formula One endeavor we’ve been expecting.
3rd Gear: But You Can Get One Cheap Right Now
One more VW story, I promise. In case Dieselgate hasn’t put you off buying a GTI, a Golf R or a TSI SportWagen, now’s a good time to be in the market as they offer at least $2,000 off the lease or purchase of a new gas or hybrid model. From Automotive News:
Existing VW owners will receive $2,000 toward the purchase or lease of any new VW gasoline or hybrid model, according to the brand’s website. The offer can be combined with any other VW offer, except for dealer employee participation or fleet programs, a VW spokeswoman said.
[...] VW will also continue its September incentive programs, McNabb said. Those include hefty dealer-cash bonuses of $2,000 to $2,750 for gasoline Passat midsize sedans, $2,250 for gasoline Jetta compacts and $4,000 for the Touareg crossover, CC coupe-styled sedan and Eos convertible.
4th Gear: Round 2 For FCA
It’s back to the drawing board for the United Auto Workers union as they navigate contract talks with Fiat Chrysler after the members overwhelmingly rejected the proposal last week. What’s new this time? The Detroit News reports:
United Auto Workers leaders are promising to handle a second round of contract talks with Fiat Chrysler Automobiles NV differently than the first discussions that culminated with membership overwhelmingly voting down a tentative four-year deal.
In separate messages published online Monday, UAW President Dennis Williams and Vice President Norwood Jewell said they will not only address members’ issues with the contract itself, but communicate better with updates between leadership and the 40,000 rank-and-file with Fiat Chrysler.
5th Gear: Ford Opposes Trade Deal
You can read all about what we know of the Trans Pacific Partnership trade agreement here, but Ford and lawmakers from Michigan are against it because they say it doesn’t prevent currency manipulation—a barrier to entry in many Asian countries. From The Detroit Free Press:
Ziad Ojakli, Ford’s group vice president for government and community relations, recommended Congress reject the TPP in its current form.
“Ford supports free-trade agreements that result in real market openings and a level playing field for all to compete,” he said. “Within the U.S. Congress, there is bipartisan consensus that currency manipulation needs to be meaningfully addressed. This summer, U.S. lawmakers took unprecedented action to set a clear negotiating objective for addressing currency manipulation in all future trade deals. The TPP fails to meet that test.”
Neutral: Would You Buy A VW Right Now?
Now’s a great time to get a non-TDI model. Would you go for it, or would Dieselgate make you go elsewhere?
Photo credit AP
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