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What The Loss Of Its U.S. CEO Means For Volkswagen

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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: VW Disrupted, Negotiations Not So Much

It’s too early to cast now-former Volkswagen U.S. CEO Michael Horn as victim or villain in the Dieselgate crisis, but he was well-liked by American dealers and seemed more in tune with how to succeed in this market than his German bosses were comfortable with. Apparently that’s why he was forced out.


Reuters reports Horn’s departure comes at a terrible time as the company attempts to mount a comeback and salvage its sales numbers, but it won’t affect the negotiations with regulators.

The departure of Volkswagen’s (VOWG_p.DE) U.S. boss is a blow to the carmaker’s attempts to revive sales after its emissions test cheating scandal, but should not disrupt its efforts to strike a deal with U.S. regulators, analysts and sources told Reuters.

Michael Horn, whose surprise departure from the helm of Volkswagen Group of America was announced late on Wednesday, was not on the teams negotiating with U.S. regulators over a fix for almost 600,000 vehicles found to be emitting up for 40 times the legal limit of pollutants, sources close to the matter said.

[...] “VW has its back to the wall, Horn’s departure is happening at the most inconvenient time,” said Arndt Ellinghorst, an analyst at banking advisory firm Evercore ISI. “If such a key figure quits, this will inevitably cause more unrest.”


2nd Gear: Can Japan Handle Another Big Quake?

On the fifth anniversary of the devastating Japanese earthquake-tsunami that killed nearly 16,000 and led to the Fukushima nuclear disaster, Automotive News examines whether the county and its industries could survive a worse one:

The auto companies, meanwhile, are still preparing their supply chains and manufacturing footprints for when the next quake strikes. And the next quake is a question of when, not if.

Indeed, the March 11, 2011, disaster could be small potatoes compared with quakes expected to hit Tokyo and Japan’s industrial heartland someday. Nightmare scenarios for those quakes predict tens of thousands dead, another devastating tsunami and hundreds of thousands of buildings destroyed.

That’s a good story and worth the read.

3rd Gear: Tesla Fights Virginia This Time

Tesla’s at it again with another state with franchise laws that prohibit more direct-sale stores. This time it’s noted speed trap Virginia, Reuters reports.

Tesla Motor Co (TSLA.O) said it will “vigorously defend” against a lawsuit filed by the Virginia Automobile Dealers Association (VADA) that seeks to keep the electric carmaker from opening and operating a second company-owned dealership in Virginia.

Tesla has sought to open its own stores in several states despite franchise laws that, in most cases, do not allow, a manufacturer to own and operate an auto dealership.

Tesla in an emailed statement on Thursday said the VADA lawsuit “is entirely without merit.”

“Tesla has always complied with the terms of the parties’ settlement agreement” reached in 2013 that allowed the carmaker to open a dealership in northern Virginia, the company said. A Tesla dealership opened in February 2015 in Tysons Corner, a suburb of Washington, D.C.


4th Gear: Yes, This Is Still Happening

The first “bellwether” lawsuit over General Motors’ faulty ignition switch ended in a super weird way, but it was merely the first of many. The next one heads to trial in Manhattan on Monday, reports Bloomberg:

Dionne Spain was driving her 2007 Saturn Sky over the Crescent City Connection bridge in New Orleans in January 2014 when she hit her brakes to avoid a multi-car pileup. The car didn’t stop, and its power steering failed, she said. Spain rear-ended the vehicle in front of her, scraping the bridge’s inside rail. The accident left her with back and neck injuries. A passenger, Lawrence Barthelemy, was also hurt.

On March 14, Spain and Barthelemy will take their lawsuit against General Motors, maker of Saturn, to trial in federal court in Manhattan, alleging a defective ignition switch caused the brakes and steering to fail just when Spain needed them most.

The case is the first big test for plaintiffs’ lawyers and the carmaker’s attorneys in assessing the strength and value of hundreds of similar allegations against GM. At least 17 cases scheduled for trial in state and federal courts this year will help determine how much the automaker will have to pay to resolve all the claims.


The case is important because it could determine the settlement values for similar cases too.

5th Gear: Moab Rising

All those wacky Jeep concepts you saw on Truck Yeah yesterday were part of Jeep’s 50th Easter Safari offroading festival in Moab, Utah. Via The Detroit Free Press:

The Safari draws thousands of Jeep owners, aficionados and customizers to the legendary scenery and challenging off-road routes of Moab, Utah.

“Moab is the Mecca for Jeep customization,” said Pietro Gorlier, head of Fiat Chrysler Automobiles’ Mopar parts business. “Ninety-eight percent of Wranglers have at least one Mopar accessory.”

In addition to lift kits, winches, knobby tires and other off-road goodies, FCA will use the Safari to gauge response to a pair of pickups based on current production models.


We’ll be there too! If David Tracy’s $600 Craigslist Cherokee is up to the task.


Reverse: So Many Hybrids


Neutral: What Does Horn’s Departure Really Mean For VW USA?

It does seem unlikely the brand will get another leader more sympathetic to the needs of the American market.


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