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: It All Depends On How Responsible He Is
There’s responsibility, and then there’s “responsibility.” With Martin Winterkorn out as Volkswagen’s CEO in the wake of the news that the company systematically set up diesel-engined cars to cheat on emissions tests, many are looking to the future. At the moment, it looks like we’re still waiting to hear who the next CEO will be. But that doesn’t mean we’re done with Professor Dr. Winterkorn just yet, because he might be on the receiving end of a $67 million severance package, as the Washington Post notes:
Winterkorn could also be eligible for a lofty severance payment, though it’s not clear yet what he’ll receive—if anything. The company’s annual report says unless an executive is terminated “for a reason for which the Board of Management member is responsible,” those with employment contracts dating since late 2009 may receive severance payments that equal up to twice their total remuneration.
In Winterkorn’s case, that severance calculation would be mostly based on a €30 million pension. Double that under the severance rules, and you’ve got a €60 million package, which comes out to around $67 million.
Of course, that all depends on how “responsible” VW’s Executive Committee decides Winterkorn is. And the Executive Committee has already said they don’t think Winterkorn knew what was happening.
2nd Gear: California Could Take Matters Into Its Own Hands
Faced with famously toothless federal agencies, California’s traditionally gone its own way when it comes to automotive emissions standards. That independence also extends to enforcement actions, and officials at the California Air Resources Board (or CARB) is now saying that the state could slap VW with its own penalties, the federal EPA be damned. Via the Automotive News:
Air Resources Board member Alex Sherriffs said the state’s carbon market, which puts a price on emissions of heat-trapping greenhouse gases, will make it relatively easy for the state to quantify how much Volkswagen owes for violating emissions testing.
“We’re looking at the damage to the environment and that can be measured,” he said. “We’ve developed a price for carbon and we’ve developed what we understand to be the cost of reducing emissions. That looks like the easy piece in terms of putting a price on that,” he said.
The head of the board, Mary Nichols, told AN that Volkswagen is “obviously” looking at some sort of recall, but what that entails is still a bit up in the air.
3rd Gear: China’s Going Electric
Looking askance at all our woes, and looking like it’s finally determined to do something about the hazy brown fog that it calls “air,” China is turning towards the future. Yesterday it announced that it was introducing a cap-and-trade carbon regulatory program, and today a Chinese official said that the company is actually going to be aiming for electric cars in the future, Bloomberg reports:
China has said it will target raising the proportion of non-fossil fuel energy use to total consumption to 15 percent by 2020, increasing further to 20 percent by 2030.
That’s good news for Tesla, you might say, but it could be even better news for people making Tesla knockoffs.
4th Gear: Labor Trouble At FCA?
It’s probably nothing to worry about for now, but the agreement that the United Auto Workers made with Fiat Chrysler Automobiles apparently isn’t very popular. Local units have started to vote on the contract, and the votes aren’t very promising just yet, the Detroit Free Press notes:
At UAW Local 1166, which represents workers at Kokomo Casting, 59% of production workers voted to reject the contract while the skilled trades workers split their vote 50% to 50%, according to a person who was not authorized to speak publicly about the results.
Those results came in just hours after the Free Press learned that UAW Local 1264, which represents about 2,000 hourly workers at Sterling Stamping, voted to reject the contract. At that local 57% of production workers and 61% of skilled trades workers voted to reject the contract, according to a person who was not authorized to publicly disclose the results.
There are 37 bargaining units total that need to vote, so this could all blow over. Either that, or negotiations not only with FCA, but with Ford and GM could end up dragging on for a while. Just nobody say the “S” word yet, which is “strike.”
It’s not happening yet.
5th Gear: VW Dealers Oppose Any Departure Of Horn
Alright, I hate to keep you regaling you with tales of Dieselgate, but it’s still going on. I managed to avoid it for two gears, but you can’t avoid The News forever. In this case, it concerns VW dealers and the company’s CEO of American operations, Michael Horn. Horn loudly proclaimed that the company “screwed up” at its party on Monday, but that doesn’t mean the company’s dealers want him going anywhere, as AN reports:
Volkswagen’s national dealer council and other dealers are publicly opposing the VW supervisory board’s reported plans to dismiss Volkswagen of America CEO Michael Horn.
“Recent reports that his position may be in jeopardy over this situation made it imperative that the dealer body express our unconditional support for Michael Horn,” Volkswagen’s 12-member National Dealer Advisory Council said in a statement to Automotive News delivered by the group’s chairman, Alan Brown, general manager of two large VW dealerships in suburban Dallas.
Of course, if it comes out that Horn knew exactly what was going on at his company under his area of responsibility while he was in charge of its operations when he should’ve been aware of a potential regulatory and environmental ticking time bomb, that tune might change.
But that’s a big “if.”
On September 25, 2004, Chinese officials gather at the brand-new Shanghai International Circuit racetrack in anticipation of the next day’s inaugural Formula One Chinese Grand Prix. Though Formula One racing was traditionally a European sport, the builders and boosters of the state-sponsored Shanghai track–part of an elaborate complex called the Shanghai International Auto City–hoped that they could help the sport catch on in Asia.
Neutral: We definitely don’t hate diesels, as when they’re working right, they’re still pretty great. Do you think the American public will turn against diesels, like they did after the debacle that was the Oldsmobile diesel program in the 1980s?