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Volkswagen's In Trouble For Something Other Than Diesel

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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 Stays In The Spotlight For Trouble

Volkswagen is in trouble with the law again, but not for dirty emissions this time. Reuters reports that German prosecutors and tax officers raided the offices of several Volkswagen higher-ups Tuesday, including works council chief Bernd Osterloh.


The raid, according to Reuters, was on suspicions of overpayment and tax evasion. It’s a legal breach to waste corporate funds like that in Germany, and the investigation into the Volkswagen salaries that officers have been suspicious of isn’t a new thing.

But Volkswagen claims everything will be fine. From Reuters:

That is because over-remuneration could result in overly high operating expenses and the payment of too little tax.

Files and computers were seized.

Both Volkswagen and the works council said on Wednesday they were confident that Osterloh’s remuneration would be found to be compliant with the law.

The works council added that Osterloh himself was not the target of the investigation.


Reuters reports that Osterloh told a newspaper at the time the investigation news broke that his base salary was just over $236,000 at current exchange rates, and that bonuses got it to nearly $887,000 one year.

Just imagine life if your bonuses could nearly quadruple your annual salary.

2nd Gear: Alright, Now Let’s Talk About The Emissions

In a small chunk of its huge U.S. payouts after its diesel-emissions scandal that broke more than two years ago, Reuters reports that Volkswagen agreed to pay $69 million to settle emissions suits in New Jersey. The automaker has agreed to pay more than $25 billion in the U.S. to address owner, regulator, dealer and other claims, according to Reuters. 

From the story:

New Jersey’s attorney general and the automaker confirmed the cases had been settled in a court filing on Tuesday. New Jersey had said previously that VW could have faced maximum penalties of more than $1.2 billion in the state.

“Volkswagen’s agreement with New Jersey resolves one of the most significant remaining legal exposures related to the diesel matter in the United States. It fully settles the state’s legacy consumer and environmental claims and is another important step forward for our company and our shareholders,” VW spokeswoman Jeannine Ginivan said Tuesday.

New Jersey Governor Chris Christie said the state received roughly one-and-a-half times per vehicle the amount paid any other state settling with VW for deceptive practices.


It’s kind of like Volkswagen took a big, costly trip to the ER after hurting itself in some elaborate plan it devised. The bills just keep coming.

3rd Gear: Speaking of Emissions, BMW Goes Green On All Of Its Business Operations


BMW’s going to all-green electricity to power business operations by 2020, Bloomberg reports. That’s up from 63 percent last year, and the move will include a biomass plant that “runs on cow dung and chicken droppings,” as Bloomberg puts it. There really isn’t a better way to say it than that.

From the story:

Meeting the target means the carmaker will buy local clean power for all its 31 production sites in 14 countries, said Duesmann. BMW is already getting power from diverse sources such as wind turbines at its plant in Leipzig, Germany. It’s also getting methane gas from a landfill near its Spartanburg operation in the U.S., he said.

BMW’s effort to switch to renewable energy comes as the carmaker is spending billions on a suite of electric vehicles. Claims of manufacturers making cleaner vehicles are under scrutiny as the amount of power and raw materials involved in production of batteries and electricity sources offsets advantages of emissions-free cars.


BMW will need enough extra energy to power about 222,000 average homes, according to Bloomberg. No biggie.

4th Gear: Electric Trucks Are Coming To Canada

As a native Texan, where trucks are synonymous with huge, lifted setups and clouds of extra-dark exhaust smoke, “electric” and “trucks” don’t sound very successful in the same sentence. But we’re talking about work trucks here—delivery and trash pickup, for example—and even Warren Buffett is invested in this operation.


Buffet backs Chinese automaker BYD, which Automotive News reports plans to open its first assembly plant for electric trucks in Canada next year. The company will hire 40 people to start, spokesperson Ted Dowling said. From Automotive News:

The Shenzhen-based company has decided to “significantly” accelerate its investment in Canada as growing demand for electric vehicles and provincial tax incentives create a more welcoming environment than the U.S. in the short-term, he said.

“There is less of a barrier to entry when it comes to having Chinese products in Canada compared to the U.S.,” Dowling said. The company, which is partly owned by Buffett’s Berkshire Hathaway Inc., declined to say where in the province the plant will be, how much it plans to invest or any government incentives it was offered. It expects to make an announcement in a few weeks, Dowling said.


BYD, which built an electric-bus manufacturing plant in California in 2013, will start with short-range garbage trucks and delivery vehicles in Canada before expanding, Automotive News reports.

5th Gear: Not So Fast, Automakers

Customers seem to be a lot slower to adapt to technology changes than automakers, and that’s understandable—what kind of car doesn’t have an audio knob, or a physical shifter to grab? Even in an Aston Martin, it feels awkward to press a button to go from park to drive.


Automotive News reports that automakers think people will get used to changes to the staple controls of vehicles eventually, but it’s just not happening yet. From Automotive News:

Witness the humble audio volume knob, which some automakers excitedly replaced with touch-sensitive sliders. But the tried-and-true, if dated-looking, way to turn the sound up or down with minimal distraction is very much alive in most 2018 models. American Honda relented on the 2017 CR-V and 2018 Accord after customers complained about having to repeatedly tap alongside the touch screen instead of just flicking a wrist.

“Our customers and frankly, many of you, said, ‘We want a knob,’ so the knob is back,” Jeff Conrad, then-senior vice president of Honda Division, said at a media event in Detroit last year to unveil the fifth-generation CR-V.


The story has a ton of other examples of things some automakers have tried to phase out, but most haven’t had much luck with. It’ll make you nod in respect to the volume knob and dread the future, all at the same time.

Reverse: Dale Earnhardt Ends His First Cup Series Championship Season

Nov. 15, 1980 was the end of that NASCAR Winston Cup Series season, and the end of Dale Earnhardt Sr.’s first championship run. The final race of the year was the Los Angeles Times 500, and Earnhardt finished in fifth. Benny Parsons won the race.


Earnhardt went on to win six more Cup Series championships, and is still tied for the most career titles at NASCAR’s top level along with Jimmie Johnson and Richard Petty. Johnson won’t beat that this year, since he was eliminated before the “championship four” round.

Neutral: What Kind Of Car Interior Gets Your Attention?

Personally, physical controls like audio knobs and simple interiors are what are attractive in modern-day cars. Having a million screens and pages upon pages of navigation is not at all endearing.


Does that kind of sentiment apply to you, or do more screens and confusing menus feel cooler?