The Government Accountability Office issued a report on the U.S. Treasury’s investment in General Motors (and Ally Financial, the former GMAC credit arm of GM) which says that the automaker has improved since 2008 but that there still are concerns about competitiveness and market share as well as pension and labor costs. “Although GM’s financial performance has improved significantly since the company initially received federal assistance, questions remain about competitiveness, market share and costs,” the GAO said. Read More >
The state of California gave the Warren Buffet backed Chinese car company B.Y.D. almost $2 million in tax subsidies in 2010 to locate its North American headquarters in Los Angeles. Since then, the company has gotten contracts worth more than $40 million to build electric city buses for Los Angeles and Long Beach and it has said that it will be creating dozens of new jobs at a manufacturing plant in suburban LA. However, more than three years along, B.Y.D. is employing fewer than 40 workers in California and the company has now been fined almost $100,000 by the state for violating its minimum wage law for how it is paying the Chinese nationals it employs. According to the state, the car company employs at least 5 Chinese nationals here on temporary worker visas, and it apparently has been paying them not in dollars but rather in Chinese yuan and at a rate far below California’s $8.00 an hour minimum wage, the equivalent of $1.50/hr. Read More >
What has the shutdown (and near-meltdown) of the United States government wrought in its wake? Delayed unemployment reports, a belated spotlight upon the broken ACA website, and of course, apprehension among customers looking for their next car to lease or buy. But now that the cans have been kicked hard down the road… again, the showrooms are back in business as if our elected leaders hadn’t gone mad in the first place.
Forty years ago this month, the Organization of Arab Petroleum Exporting Countries (consisting of OPEC’s Arab members plus Egypt, Syria and Tunisia) began an oil embargo that would last through March of 1974.
Sources familiar with the process have told Reuters that a group headed by Hong Kong heir and businessman Richard Li will likely emerge as the winner of the Department of Energy’s auction last week of Fisker Automotive’s $168 million debt to the DoE’s Alternative Technologies Vehicle Manufacturing loan program. Final details of the sale are being negotiated and the DoE had said before the auction that the results would not be made public until the deal is consummated. Fisker hasn’t built a car in over a year and it doesn’t have enough cash to pay current outstanding bills. Resolving the debt would be the first step to reviving Fisker.
The head of Hyundai Motor Company’s U.S. sales unit, John Krafcik told the Bloomberg news agency that the continued partial shutdown of the United States government is affecting consumer confidence and may result in as much as a 10% drop in October sales. Krafcik said that the political impasse in Washington is creating “anxiety” for many people.
Reuters is reporting that the reason behind PSA/Peugeot Citroen’s financial tie-up with China’s Dongfeng Motors was the decision of General Motors, which owns 7% of the French automaker, to scale back cooperation with Peugeot. GM also apparently rejected a PSA/Opel merger backed by the French government.
After months of intense lobbying, Germany has convinced European Union environmental ministers to keep 2020 new car carbon dioxide emissions standards at 130 grams per kilometer instead of the proposed, stricter 95g/km standard. The German government argued that the tighter regulations would cost jobs and hurt German automakers. BMW and Mercedes-Benz produce larger and heavier cars than other European car companies like Fiat and Renault and they would have a more difficult experience trying to meet the new CO2 standards.
A New York State Supreme Court judge on Tuesday voided Nissan’s contract with New York Citys’ Taxi and Limousine Commission that would have forced taxicab operators to buy and use taxis based on the Nissan NV200 van. Judge Shlomo Hagler said that the commission “exceeded its authority” by awarding Nissan the exclusive ten year contract to supply New York City’s taxis. The ruling was the outcome of a lawsuit filed against the commission by the Greater New York Taxi Association. Read More >
In an extensive interview with the Automotive News, Christopher Grundler, director of the Environmental Protection Agency’s Office of Transportation and Air Quality, said that the auto industry is ahead of schedule on meeting the Obama administration’s new fuel economy standards that mandate a nominal average of 54.5 mpg (according to CAFE calculations) by the year 2025.
After lobbying by Germany, the governments of the European Union have for the third time delayed implementation of carbon dioxide emissions targets for Europe’s new cars. The proposed limits would have been reduced CO2 emissions from new cars to 95 grams per kilometer.
Fifty years ago, in a dispute over a German tariff on chicken imported from the United States, the U.S. government retaliated by slapping a 25% tax on imported trucks and vans, apparently to impact the then popular VW Bus. As sales of small trucks from Japan increased, the American automakers embraced the so-called Chicken Tax as a means of reducing competition. However, now that all three American based car companies sell vehicles that have been made outside the United States, the tariff has come back to haunt at least Ford. The Automotive News reports that Ford is now appealing a ruling by U.S. Customs and Border Protection that the way the company imports the Transit Connect commercial vehicle makes it subject to the 25% tariff as opposed to the much smaller 2.5% duty charged on small passenger vans. Read More >
According to regulatory filings by Toyota Motor Credit Corp., the giant automaker’s car financing arm, and American Honda Finance Corp., which fills a similar role for Honda, the United States Consumer Financial Protection Bureau and the Department of Justice are investigating major auto manufacturers for possible lending bias based on race, which would be a violation of the 1974 Equal Credit Opportunity Act. The agencies are looking into how loans that the automakers’ credit companies provide to auto dealers are priced. Bloomberg reports that as many as seven car companies have been asked for data that may be related to the borrowers’ races and interest rates charged. Both government agencies declined to comment on the matter. Read More >
The United States Treasury has reduced its stake in General Motors to 7.3% after selling off another block of the shares it acquired during the bailout of the giant automaker. According to documents released earlier this week Treasury sold at least 110 million shares between May 6 and September 13, raising more than $3.82 billion.