Image: AP (Eckehard Schulz)
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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: Volkswagen’s Likely New Head Is Cool As A Cucumber

Sources at Volkswagen have indicated that Volkswagen Brand Chief Herbert Diess is likely to replace Matthias Müller as chief executive of the wider Volkswagen Group, reports Reuters. Müller’s contract runs through 2020, but VW has been undergoing a major management shake-up where even Müller isn’t safe.

While Müller has been at Volkswagen for the past four decades, Diess was recently brought over from BMW AG in 2015. Diess is no stranger to handling controversy, Bloomberg notes, as he’s weathered a standoff with Volkswagen’s labor unions over cost cuts already in his time at Volkswagen:

But Diess, a lanky, cool-headed Bavarian, never got ruffled and ultimately secured a landmark deal that paved the way to cut as many as 30,000 jobs and save 3.7 billion euros ($4.6 billion). In the process, he earned the trust of the Porsche/Piech clan that controls the company by fixing problems at its flagship unit, according people familiar with the matter.

Being chill in the deepest controversies seems baked into the job description of basically anything at the Volkswagen Group at this point, so that’s one plus in Diess’s favor. It’s also a direct contrast to how un-chill Müller’s been in public recently, according to Bloomberg:

While the timing of the handover seems somewhat counter-intuitive — VW is financially on the mend and has defended its status as the industry No. 1 — Mueller had at times shown signs of fatigue. At recent public events, the CEO has appeared strained and prickly, a contrast to his previous persona as the easygoing boss of the Porsche car brand — the job he held before being tapped for CEO in the chaotic days following the cheating revelations in September 2015.

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Bloomberg also notes that Müller was never viewed as the right man to head up the VW Group internally, either. That’s no bueno when Volkswagen is considering making sweeping changes in the near future, including a possible spin-off of its trucking business.

Volkswagen is expected to announce their new Chief Executive at a supervisory board meeting Friday, per Bloomberg. However, given labor leaders’ lack of confidence in Diess after the layoffs he brought to the Volkswagen brand, Reuters notes that the VW Group is expected to give labor leaders a management board seat to smooth over the deal.

2nd Gear: California Could Make A Deal With Trump’s Administration On Emissions After All

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The lack of any specific proposals from the administration’s regulation-averse agencies has led California Air Resources Board chair Mary Nichols to believe that some kind of consensus is possible, Bloomberg writes:

Nichols said she’s open to adjusting California’s regulations to make them easier for automakers to manage in a way that doesn’t abandon the state’s overall emissions-reduction goals. Rules agreed to by carmakers, California, the U.S. Environmental Protection Agency and the National Highway Traffic Safety Administration in 2011 aim to boost fuel economy to more than 50 miles per gallon by 2025, or roughly 36 miles per gallon in real-world driving.

Future changes could include granting automakers additional pollution credits for putting fleets of electric vehicles on the road that encourage car sharing, or not holding automakers responsible for the emissions of power plants that provide electricity for plug-in cars, Nichols said.

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It’s the conflict we all know at this point: California, a state aptly described by Dr. Dre as the home of “sticky green and bad traffic,” wants more power to keep smog out of their air, but Trump’s feds believe the Obama-era emissions targets are too onerous for automakers.

The state’s talks with federal regulators has been sporadic, with the state still waiting for a formal proposal from the Trump administration to materialize. Nichols told Bloomberg that she expects the state to offer a range of possibilities, some of which may even be workable.

That being said, California and other states are still considering a lawsuit to preserve its rights to set its own policy regarding vehicular emissions, Bloomberg notes.

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3rd Gear: It’s Hard To Pay Attention On Autopilot

Autopilot is that weird technology currently bridging the gap between actually having to drive our cars and the autonomous future where we can pay no mind to the road whatsoever as our robot-taxi overlords shuffle us silently and efficiently to work. Yet Tesla’s Autopilot and other sorta-autonomous systems like it feel like a fun party trick at best, as you still have to pay attention to the road and sort of double-check your car’s self-driving work to make sure it doesn’t veer into a barrier.

This is a problem, because watching Autopilot do its thing is boring as hell, reports Bloomberg:

The difficulty of keeping drivers in automated vehicles engaged — combined with the broader safety benefits of ensuring people in traditional cars and trucks aren’t peering at electronic devices or nodding off — is a growing safety concern that’s spurred several car companies, including GM and Subaru Corp., to deploy infrared cameras in the cockpit trained on the driver to track head and eye movement.

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The National Transportation Safety Board has opened up an investigation into three cases (two of which involve Tesla’s Autopilot system) that involve drivers who fail to stay engaged with their own vehicles as they steer themselves down the road. Their recommendation is to monitor driver behavior more to keep them engaged with the car, not with their phones.

Tesla installed a steering wheel sensor that requires drivers to have their hands on the wheel after a fatal Model S crash in 2016. However, it takes ten seconds or more to become really, audibly annoying to the driver and start slowing the car down, which is a lot of time at freeway speeds.

4th Gear: FCA May Already Have The Fix For Its Dirty Diesels

Advanced settlement talks continue between the California Air Resources Board, the U.S. Justice Department and Fiat Chrysler Automobiles over allegations that FCA used a software cheat to make their diesel engines appear to give off less pollution than they really do, reports Reuters.

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The problem effects 104,000 of the company’s diesel vehicles sold since 2014, but fortunately, FCA believes they already have a fix. Reuters writes:

Last July, Fiat Chrysler won approval from federal and California regulators to sell 2017 model year diesel vehicles after it was sued by the Justice Department in May 2017 for excess emissions.

To resolve the pollution issue, the company is confident it can use updated emissions software in the 2017 vehicles as the basis of a fix to address agencies’ concerns over 2014-2016 diesel vehicles. The company hopes to complete testing the proposed fix by the end of June.

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Talks are moving along quickly, and FCA expects a settlement to be finalized this summer.

5th Gear: The U.S. Wants More Engines Built Here

Mexico is bracing for a proposal from the United States that will require more parts of cars to be built in high-wage areas—and for engine production to maybe move north of the border. Reuters writes:

In an idea aimed at breaking a deadlock in talks, Washington last month suggested some automotive production should happen in areas of North America paying higher salaries.

U.S. negotiators discussing changes to the North American Free Trade Agreement (NAFTA) floated the idea that 40 percent of automotive production must happen in areas paying wages of between $16 to $19 per hour, Fausto Cuevas, the director general of auto industry group AMIA, said on Tuesday.

The negotiators have also indicated a preference that motors be built in the United States, Mexican Deputy Economy Minister Juan Carlos Baker said.

“The United States proposed baskets of products that they are more interested in. They prefer engines, the most profitable part of cars, to be made in the United States,” he said late on Monday.

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Mexico wants to see a more concrete proposal before responding, but it’s all part of the greater move to rework NAFTA the Trump administration has been particularly gung-ho for. NAFTA currently governs $1.2 trillion in annual trade between the United States, Canada and Mexico.

Reverse: Ford’s Getaway Car Could Be Any Color So Long As It Was Black

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Neutral: What are your thoughts on cars that annoy you into paying attention?

A future where the car is forcing me to pay attention to drive sounds worse than the actual one where I’m driving. Engaged. Paying attention. Are semi-autonomous cars that pester you to look over an upgrade, a downgrade, or simply a necessary middle step?