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: Silos
General Motors closed the door on the criminal case surrounding the ignition switch to the tune of $900 million, less than what analysts expected and with no criminal prosecutions. The whole ordeal has cost them billions in total, but they could have fared far worse.
The U.S. Attorney behind the case, Preet Bharara, has been criticized for not holding some individuals accountable, but he said the “reporting responsibility” at GM and other corporations makes it hard to do so. Via Reuters:
What is unlawful, Bharara said, is to hide problems from regulators, but he said the reporting responsibility is generally so diffuse at automakers that no single person could be held responsible.
“A particular person may have had only partial knowledge, and contributed in a chain of actions,” he said.
Describing it as a “problem in business culture,” he said such “siloing” was also harmful to corporate compliance programs designed to catch wrongdoing. Bharara also said, “it’s not as easy as it looks sometimes” to bring a prosecution.
2nd Gear: Finding New Roads
Probably no one is more glad the criminal case has been resolved than CEO Mary Barra, whose tenure began under this cloud and has been dogged by it ever since. As this other piece from Reuters notes, the automotive world is now a very different place than it was when the recalls — for a problem known for a decade — were announced in 2014:
The settlement caps a humbling episode for a company that once dominated the global auto industry. The recall scandal battered GM’s reputation in its home market, chopped more than $5 billion out of the Detroit automaker’s profit and helped usher in a new era of aggressive oversight by federal regulators.
Besides sparking the Era of the Big Recall, and the civil lawsuits that have yet to go to trial, Barra’s company post-ignition switch is free to move on to other challenges, like GM’s stock price and Sergio Marchionne’s quest for a Fiat Chrysler merger:
Barra called the settlement “tough,” and said GM would change its ways. “The steps we took to do the right thing ... persuaded the Justice Department to defer prosecutions,” Barra said during a televised talk to GM employees on Thursday afternoon. She also reminded employees, “people were hurt and people died in our cars.”
3rd Gear: Tesla Aims At Women With The Model X
Deliveries of Tesla’s first crossover, the Model X, begin at the end of this month. And the company is hoping it will bring more gender parity to their brand — Model S ownership has been largely dude-centric. Via Bloomberg:
“With the S, we might be something like two-thirds male,” Musk said in an interview with Bloomberg earlier this year. “With the X, I think we probably will be slightly majority female.”
Early in the design process, Tesla invited a dozen women to its Palo Alto, California, headquarters for a three-hour focus group led by chief designer Franz von Holzhausen. The participants, most of whom drove minivans and SUVs, were asked what they like and don’t like about their vehicles. Among the big issues: safety, a third row and getting kids in and out of car seats.
And if you’re the kind of woman who rolls her eyes at the idea of cars being all about safety, ride height and kid-hauling, there’s still Ludicrous Mode.
4th Gear: Cars To Mexico, Trucks And SUVs In America
While Fiat Chrysler looks to reshuffle vehicle plants in a way that would send most car production, like the 200 and Dart, to Mexico, it would leave the more profitable truck and SUV production here. From The Detroit News:
The contract also includes a $5.3 billion investment in U.S. plants, as part of a plan to move nearly all domestic car production to Mexico, and fill the voids left on American assembly lines with more-profitable SUVs and pickups.
Plant investments under the four-year proposed deal involve at least five vehicles and four U.S. assembly plants. The investments, like the pay hikes, are contingent on ratification by the union’s 40,000 Fiat Chrysler members.
Production of the Ram 1500 pickup would move from the Warren Truck Assembly Plant to the Sterling Heights Assembly Plant, according to two sources briefed on the matter who didn’t want to be identified because union membership hadn’t been told about the moves.
5th Gear: That’s A Lotta RAV4s
Speaking of recalls, Toyota’s doing more than 420,000 RAV4s. Via The Detroit News:
The recall covers 421,000 2009-2012 RAV4 and 2,500 2012-2014 RAV4 EV SUVs in the United States.
The Japanese automaker said “water dripping onto the windshield wiper link can, over time, cause corrosion and wear at the wiper link joint. In some cases this could result in the separation of the wiper link from the wiper motor crank arm. If separation occurs, the windshield wipers could become inoperative, which could reduce driver visibility and increase the risk of a vehicle crash.”
Reverse: Finally Canada Is Notable For Something
Neutral: What’s The Long-Term Effect On GM From The Ignition Crisis?
I don’t think there is one as the automaker moves into the resolution phase. The car-buying public certainly doesn’t seem to care much if you look at sales figures. I think the biggest effect will be the galvanization of America’s safety regulators more than anything.
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