The Truth About Cars » Congress http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sun, 27 Jul 2014 20:45:49 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Congress http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Foxx: No Penalties Issued Within NHTSA Over GM Ignition Recall http://www.thetruthaboutcars.com/2014/07/foxx-no-penalties-issued-within-nhtsa-over-gm-ignition-recall/ http://www.thetruthaboutcars.com/2014/07/foxx-no-penalties-issued-within-nhtsa-over-gm-ignition-recall/#comments Tue, 22 Jul 2014 14:00:50 +0000 http://www.thetruthaboutcars.com/?p=871434 Anthony Foxx + Barack Obama et al

Though General Motors gave 15 of its employees the ax over their part of the February 2014 ignition switch recall, U.S. Transportation Secretary Anthony Foxx told those in the National Press Club Monday that no one in the National Highway Traffic Safety Administration was fired or disciplined over their part of the recall and subsequent fallout.

The Detroit News reports that while no one was penalized in the slightest within the agency, Foxx ordered a review on the NHTSA’s handling of the recall and other complaints:

I’ve asked our inspector general to go through and do an after-action on this GM situation to see if there is anything we didn’t do that we should have done. We will learn from that report, and until that time we have our team intact.

Foxx also defended the NHTSA in regards to the possibility of rehiring former employees who are currently working in the auto industry, proclaiming it has “ethical requirements that really guard against” undue influence in favor of the automakers.

Meanwhile, both houses of Congress are planning a second round of hearings with the agency later this year, with the goal to determine why it failed to link a series of complaints over ignition/airbag issues in Chevrolet Cobalts and Saturn Ions to the out-of-spec switch at the heart of the February 2014 recall.

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Obama Talks Connected Vehicles, Highway Funding http://www.thetruthaboutcars.com/2014/07/obama-talks-connected-vehicles-highway-funding/ http://www.thetruthaboutcars.com/2014/07/obama-talks-connected-vehicles-highway-funding/#comments Wed, 16 Jul 2014 10:00:06 +0000 http://www.thetruthaboutcars.com/?p=866778 Barack Obama + Connected Vehicles

Amid touring the Turner-Fairbank Highway Research Center in McLean, Va. and having a go at a driving simulator based upon a Saturn SL, President Barack Obama talked about connected vehicles and increasing highway funding before reporters in attendance Tuesday.

Autoblog and Bloomberg report the President spoke for 14 minutes on both subjects, though the majority of his speech focused upon the U.S. Highway Trust Fund. Obama warned that if Congress fails to come to a decision as to how the trust will be funded, 700,000 jobs and 100,000 active projects could be shuttered when the well runs dry next month. He offered some praise regarding bipartisan bills in both houses offering a solution, though Obama urged Congress to focus on the long term instead of “kicking the can down the road for a few months.”

On the connected vehicle front, he proclaimed his support for any new technology that could improve driver safety, referencing his 16-year-old daughter Malia alongside results of a study where 5.5 billion hours and $120 billion in time and fuel are lost annually due to traffic congestion. Obama also joked about his brief ride in the aforementioned simulator, finding the experience disorienting in relation to his diminishing driving experience.

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Bipartisan Senate Bill To Raise Fuel Taxes For The First Time Since 1993 http://www.thetruthaboutcars.com/2014/06/bipartisan-senate-bill-to-raise-fuel-taxes-since-1993/ http://www.thetruthaboutcars.com/2014/06/bipartisan-senate-bill-to-raise-fuel-taxes-since-1993/#comments Thu, 19 Jun 2014 13:00:59 +0000 http://www.thetruthaboutcars.com/?p=846921 gas-pump-save-ftr

For over two decades, the federal fuel tax has held at 18.4 cents for gasoline and 24.4 cents for diesel per gallon sold. A bipartisan bill working through the United States Senate could soon change this, especially as the nation’s Highway Trust Fund — used for funding infrastructure projects — comes closer to running dry by August of this year.

Reuters reports Sens. Bob Corker of Tennessee and Chris Murphy of Connecticut want to raise both taxes by 12 cents, which would be spread out over two years prior to linking future increases to inflation. The senators also proposed tax cuts to make up for the increase, though nothing was specified at the time.

Meanwhile, some legislators want to fund the trust through a corporate offshore profit tax repatriation holiday that would resemble a 2004 proposal led by former president George W. Bush: 12 months, 85 percent deduction for dividends paid. The Joint Committee on Taxation estimated the holiday would bring in $20 billion during the period, but would lead to expectations for more holidays down the road.

President Barack Obama opposes this method, believing “it would give large tax breaks to a very small number of companies that have most aggressively shifted profits, and in many cases, jobs, overseas,” according to White House representative Jay Carney.

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Endless GM Recall Parade Sign Of Industry-Wide Action To Come http://www.thetruthaboutcars.com/2014/05/endless-gm-recall-parade-sign-of-industry-wide-action-to-come/ http://www.thetruthaboutcars.com/2014/05/endless-gm-recall-parade-sign-of-industry-wide-action-to-come/#comments Thu, 22 May 2014 10:00:56 +0000 http://www.thetruthaboutcars.com/?p=828562 GM RenCen Storm Clouds

Detroit Free Press posits the endless recall parade General Motors has been leading since late February 2014 may be doing more harm than good for public perception or its bottom line. Though spokesman Greg Martin claimed the recalls were an effort to make his employer “a first-class safety organization” by focusing hard upon the consumer, a survey by AutoTrader found 51 percent of auto consumers were less confident in the industry’s overall safety record as a result of the actions by GM, up from 44 percent who thought the same five days’ earlier. In addition, the automaker will take a $400 million charge in Q2 2014 for the recalls since April 1 as of this writing, while its current stock price of $33.07 per share is a few cents above its IPO price from November 2010.

Autoblog continues on this thread, proclaiming what GM is doing is the beginning of an industry-wide shift toward issuing full recalls for any flaw in a given product, all under heightened scrutiny from the public and government regulators. For the first months of this year alone, all automakers have recalled a total of 22.4 million vehicles, the bulk of which belong to GM. Kelly Blue Book analyst Akshay Anand says the parade is a double-edge sword, particularly for the General; while such recalls are a sign automakers are being proactive in ensuring their products are as safe as they can be, consumers may perceive the effort as a sign automakers are failing to do their job well in the first place.

Automotive News follows with Fiat Chrysler Automobiles CEO Sergio Marchionne, who stated in a panel discussion at the Brookings Institute this week what else might occur when the GM-led parade becomes a permanent fixture in the industry:

If effectively this frequency of recalls becomes a norm, if everybody starts doing this, then I think you will see this cost being shifted to the consumer. It will transfer itself over onto the selling price of the vehicle.

Marchionne adds automakers, in turn, will act more sensibly in handling potential defects in product, noting punitive actions — such as paying $35 million in fines to the National Highway Traffic Safety Administration — will have little in the way of such handling when reputation is the bigger issue for the industry as a whole.

Speaking of the main parade itself, Autoblog reports 218,000 2004 through 2008 Chevrolet Aveos have been recalled due to the daytime running light module in the instrument panel possibly overheating, melting and setting the vehicle ablaze. According to spokesman Alan Adler, the automaker is “aware of some fires” so far, and is working on a fix for the module. Adler adds that while he doesn’t know when the fix will come, GM will send a second notice to owners when the time comes to schedule repair work.

Detroit Free Press concludes by explaining why GM continues to issue recalls as it combs through its records to avoid another decade-long delay in taking such action:

  • The government has ordered the automaker to meet with the NHTSA monthly on investigations and recalls as part of the former’s $35 million settlement with the latter
  • GM CEO Mary Barra’s appointment of Jeff Boyer to global quality chief — with the mandate to report directly to her if necessary — means anything deemed dangerous or otherwise unknown, including previously unreported defects — are up for attention
  • The automaker’s investors prefer to get the bad news out of the way and accept whatever potential pain awaits in as few quarters as possible, even if no one is happy about swallowing such medicine in the first place

The Freep also provided a list of every recall from January through this week, minus the latest recall issued Wednesday; total recall to date is 18,666,842.

GM

On the sales front, Automotive News reports dealers won’t be able to sell any of the 2009 through 2014 Chevrolet Traverse, Buick Enclave and GMC Acadia crossovers thanks to a stop-sale order issued in a recall involving the front seat belt cable in the vehicles. The order comes during one of the biggest sales weekends of the year, putting a damper on potential Memorial Day promotions. Though dealers could still close on sales without actually allowing the vehicle to leave the lot, no test drives can be carried out in affected demonstrators, making such sales more difficult. GM is offering an end-of-month incentive to maintain May sales momentum, but that may not be enough to offset the extra floorplanning costs if few vehicles can be sold until the affected units are repaired.

Back in the Beltway, Barra met with U.S. Senator Claire McCaskill of Missouri and other members of Congress to discuss recent findings in the February 2014 ignition switch recall. Though spokesman Greg Martin confirmed the meetings did take place, he did not give details on all that was said between Congress and the CEO.

Meanwhile, members of the Obama administration who helped assemble the rescue packages for both Chrysler and GM said they knew nothing about the out-of-spec switch at the heart of the recall maelstrom when said packages were crafted between them and the automaker’s senior execs. One member, Harry Wilson, stated that even if the task force asked GM point-blank about the switch, he doubted they would ever get a straight answer. Lead adviser Steven Rattner added that as far as he knew, the execs before him then didn’t know about the problem; therefore, neither could his task force.

Over in Texas, Bloomberg both GM and supplier Delphi have asked the Texas Supreme Court to combine four suits linked to the switch into one state case. The claim is fighting each one separately would cost the duo time and money, while combining the four and rolling subsequent cases going forward into a single case would “eliminate duplicative discovery, void conflicting pretrial rulings, conserve judicial resources, be more convenient for the parties and witnesses and otherwise promote a more just and efficient conduct of this litigation.” The cases mention involve wrongful injury and death.

With GM’s cadre of lawyers coming under the gun now, Detroit Free Press reports the automaker’s general counsel Michael Millikin has named attorney Lucy Clark Doughtery to advise Boyer and product development chief Mark Reuss. Millikin is also working with independent lawyer Anton Valukas on the internal investigation into why GM handled the recall the way it had. The general counsel’s own future with the company has been called into question, though GM claims Millikin has no “current plans to retire” at this time.

In financial news, Automotive News says GM Financial is preparing to go under its own test of scrutiny of loans originated by its dealership network in an effort to avoid punitive action by the Consumer Financial Protection Bureau based on allegations of discrimination in lending rates among minority consumers. The lender’s chief compliance officer, Dan Bickmore, says his role is to help reorganize the company into compliance with the CFPB, going as far as to establish a new compliance department and boosting the lender’s complaint management process and fair lending areas. He also aims to help educate dealerships on appropriate lending policies to prevent discrimination of protected classes when drafting a loan or lease contract.

On the design front, global design chief Ed Welburn says that with GM’s line of vehicles sharing the same technology and functionality with each other, styling will be needed to help differentiate each unit. He goes on to say the automaker has committed a few design sins in the past, favoring functionality over style and charm, as well as decontenting interiors when a product was overbudget. Welburn concludes that the new guard leading GM “really cares about interiors now, and it shows,” such as the interiors in the 2014 Chevrolet Corvette and Cadillac ELR.

Finally, The Detroit News says the 2015 GMC Sierra All Terrain HD will go on sale this summer. The pickup will be available in 2500 and 3500 weight classes with double and crew cab options, with trim lines to include SLE, SLT and Z71. Power is expected to come from a standard 6-liter gasoline engine, with a twin-turbo Duramax diesel on the options list.

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Foxx, Obama Administration Urge Congress To Act On Funding Highway Trust http://www.thetruthaboutcars.com/2014/05/foxx-obama-administration-urge-congress-to-act-on-funding-highway-trust/ http://www.thetruthaboutcars.com/2014/05/foxx-obama-administration-urge-congress-to-act-on-funding-highway-trust/#comments Thu, 15 May 2014 14:00:58 +0000 http://www.thetruthaboutcars.com/?p=820890 traffic

With 112,000 infrastructure projects and 700,000 jobs at stake, the Obama administration and Secretary of Transportation Anthony Foxx are both urging Congress find a way to provide funding to the United States Highway Trust Fund before the well goes dry as early as August.

Autoblog reports both parties offered Congress a four-year funding bill that would help raise the needed funds through tolling by individual states, and through closing a loophole on deferred corporate taxes on overseas earnings, which alone would bring $150 billion to the table.

In the Senate, an alternative bill is in the works that would retain funding levels at $105 billion annually with interest for six years, though sourcing the funds would come at a later date. Meanwhile, Republican legislators aren’t keen on raising taxes to fund the trust, especially during the 2014 election season.

As for why the fund is running dry, an 18.4-cent-per-gallon fuel tax issued in the 1990s hasn’t been raised in over 20 years to keep up with increased fuel efficiency among new vehicles, with more increases coming down the CAFE pipeline.

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Obama Administration Delivers $302 Billion Transportation Funding Proposal Before Congress http://www.thetruthaboutcars.com/2014/04/obama-administration-delivers-302-billion-transportation-funding-proposal-before-congress/ http://www.thetruthaboutcars.com/2014/04/obama-administration-delivers-302-billion-transportation-funding-proposal-before-congress/#comments Wed, 30 Apr 2014 11:00:52 +0000 http://www.thetruthaboutcars.com/?p=812826 Syracuse Road Construction - Utah DOT

A $302 billion, four-year plan to fund the U.S. Highway Trust Fund — and, in turn, any road and transit projects on the table during the period — was brought before Congress by the Obama administration through the U.S. Department of Transportation.

Bloomberg Businessweek reports the proposal would add $87 billion on top of what is currently in the trust fund in order to bring much-needed dollars to the many bridges and transit systems seeking rehabilitation while creating “millions of jobs” and, thus, boosting the economy, according to Transportation Secretary Anthony Foxx. The fund, currently subsisting on gasoline and diesel taxes, would be funded by a temporary tax increase on overseas earnings by companies, which is the method proposed by President Barack Obama back in February 2014 in his budget request.

Meanwhile, both houses of Congress are seeking six-year funding proposals, though none have any financial resources to draw upon thus far. Further, lawmakers on both sides of the aisle have claimed there currently are not enough votes to raise the 18.4-cent tax levied per gallon of gasoline to boost the trust fund’s coffers. One such proposal, made in 2012, failed due to being unable to decide upon a funding source, resulting in a two-year stop-gap measure funded through general tax revenue to keep construction projects moving forward.

The proposal also requested an increase in the National Highway Traffic Safety Administration’s maximum fine for automakers who fail to issue recall notices on defective vehicles in a timely manner. The current maximum fine of $35 million would rise to $300 million “to ensure when a violation occurs it is more than a rounding error,” Foxx explained.

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Foxx Pushes NHTSA $300 Million Maximum Fine Hike Before Congress http://www.thetruthaboutcars.com/2014/04/foxx-pushes-nhtsa-300-million-maximum-fine-hike-before-congress/ http://www.thetruthaboutcars.com/2014/04/foxx-pushes-nhtsa-300-million-maximum-fine-hike-before-congress/#comments Wed, 30 Apr 2014 10:00:55 +0000 http://www.thetruthaboutcars.com/?p=812602 Anthony Foxx + Barack Obama et al

As part of a $302 billion, four-year plan to fund both infrastructure and highway funding, U.S. Transportation Secretary asked Congress to allow the National Highway Traffic Safety Administration to boost its maximum fine from the current $35 million levy to $300 million.

Automotive News reports that in addition to the increased maximum fine, Foxx’s proposal also would prevent rental companies and dealerships from lending or renting affected vehicles under a recall. NHTSA administrator David Friedman lauded the proposal, stating the increase would serve as a deterrent against future recall delays and related tactics by automakers:

As the nation’s top regulator of the automotive industry, we hold manufacturers accountable for defect and compliance issues regarding their products, and are seeking to further our ability to do so in the future.

Past attempts to pass similar legislation, including a $200 million maximum levy put forth by the Obama administration, have met resistance from both the automotive industry and its dealers. With House Republicans wary of putting more tax dollars into the declining Highway Trust Fund, and industry lobbyists ready to fight they call “an unnecessary deterrent,” the new plan will face an equally difficult road to resolution.

During the 2013 fiscal year, the NHTSA levied a total of over $35 million in fines, including $17.5 million from Ford paid last June for a delayed 2012 recall of 485,000 2001 through 2004 Ford Escapes/Mavericks over a defect in the vehicles’ cruise control leading to stuck-throttle issues.

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GM Dealers Deal With Part Backlog, CEO Asked To Back Rental Car Bill http://www.thetruthaboutcars.com/2014/04/gm-dealers-deal-with-part-backlog-ceo-asked-to-back-rental-car-bill/ http://www.thetruthaboutcars.com/2014/04/gm-dealers-deal-with-part-backlog-ceo-asked-to-back-rental-car-bill/#comments Wed, 09 Apr 2014 14:03:25 +0000 http://www.thetruthaboutcars.com/?p=791337 ChevyDealership03.jpg

Automotive News reports the repairs of some 2.6 million vehicles affected by the 2014 General Motors ignition switch recall will be delayed by one week as the needed part slowly enters into the automaker’s dealership network. Though most dealers thought they would be receiving the part Monday, GM spokesman Kevin Kelly insisted the part was set to arrive sometime during “the week of April 7″:

We plan to send letters this week informing affected customers that parts are arriving at dealerships and to schedule a service appointment with their dealer. Repairs are likely to begin to follow soon after the customer letter mailing.

Until then, dealerships may face service backlogs, especially with affected vehicles already on the lot that cannot be sold until they are repaired, which can only happen once customer vehicles go through the 30-minute swap. On the other hand, while dealers have noticed some frustration from their customers, the majority of their base was found to be patient with the status of the repair plan.

Over in Washington, D.C., The Detroit Press reports Senator Barbara Boxer of California sent a letter to GM CEO Mary Barra asking her to back a bill that would keep recalled rental cars under recall off of the road. The bill would require affected rentals to be grounded within 24 to 48 hours upon receipt of a safety recall notice, as well as establish a temporary protocol evaluating safety risk if parts are not available right away, and allow the National Highway Traffic Safety Administration the oversight to investigate rental company safety practices for the first time.

Though the bill — named after two sisters who lost their lives in 2004 when their rental car caught fire and crashed into a truck — has seen support by rental companies, the Alliance of Automobile Manufacturers — where GM is a member — has stymied the legislation out of a fear that automakers would be forced to fix rental fleets first before individual-owned vehicles, as well as potential lawsuits from the rental companies over lost revenues.

Detroit Free Press reports the NHTSA is calling upon engineers to be the agency’s eyes and ears in the battle against defects like the one linked to the current recall crisis. Lead attorney Kevin Vincent laid his case out before attendees of this year’s SAE World Congress:

Each manufacturer is actually responsible for identifying defects… and promptly reporting those defects to NHTSA. The message I have delivered to senior lawyers at the automakers is that they need to have practices and procedures in place so that when they find a problem, they will respond.

The first line of defense against safety defects is not my agency — not NHTSA. You are truly the first line of defense… to prevent safety defects from reaching the American public.

The safety agency has been taken to task as of late regarding the GM recall as well as those related to Jeep, and has been asked by the Center for Auto Safety to investigate an airbag deployment issue with 2003 through 2010 Chevrolet Impalas.

Automotive News says the 2014 Chevrolet Equinox and its GMC Terrain twin both received a top safety pick+ award from the Insurance Institute for Highway Safety in surviving the group’s new small-overlap crash test designed for midsize SUVs. The results were linked to improvements in the front structure and door-hinge pillars.

Finally, The Detroit News reports GM will pay a dividend of 30 cents per share for Q2 2014 on June 26 to all shareholders of record as of June 10. The dividend is the second consecutive payment made by the automaker to shareholders — the first, worth 30 cents/share for Q1 2014 earnings, was paid last month — and will cost $1.8 billion annually.

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Congress Looks To Revamp Automotive Safety Legislation http://www.thetruthaboutcars.com/2014/04/congress-looks-to-revamp-automotive-safety-legislation/ http://www.thetruthaboutcars.com/2014/04/congress-looks-to-revamp-automotive-safety-legislation/#comments Tue, 08 Apr 2014 13:00:54 +0000 http://www.thetruthaboutcars.com/?p=790065 United States Capitol

In the wake of the 2014 General Motors recall crisis, Congress has sought to make improvements to current United States automotive safety legislation, though a number of hurdles await any pending bills needed to usher change to the automotive industry.

Automotive News reports the pressure for Congress to act quickly is building against the 24-hour news cycle, as former National Highway Traffic Safety Administration administrator David Strickland explained in January:

Time is always the enemy for any legislative effort in response to a crisis. As you move farther and farther away from the crisis, other things happen in the world. It’s difficult to maintain momentum for things that looked incredibly important just a few months earlier.

One piece of legislation would allow the public access to automakers’ early warning reports and for the NHTSA to “disclose its inspection and investigation activities,” though industry insiders see a deathmatch between the two parties over this legislation while regulators fear less reports would be filed should public access come to pass.

Another action would boost the NHTSA’s fining ability, currently capped at $35 million. Though the current cap is short of the Obama administration’s request for a maximum $200 million fine — and in light of the $1.2 billion settlement between Toyota and the Justice Department — Strickland says the agency should have a “higher penalty authority than what it currently has, for deterrent value.” The NHTSA could also decided upon standardizing algorithms determining when an airbag goes off if the industry doesn’t self-regulate first.

However, any legislation would have to go through a number of important representatives and senators, including Rep. Fred Upton of Michigan and Sen. Claire McCaskill of Missouri, as well as face the possibility of being attached to must-pass infrastructure bills such as the $302 billion, four-year highway bill proposed by President Barack Obama to provide much-needed repairs and replacements of U.S. roads and bridges.

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Barra Testifies Before US Senate Subcommittee http://www.thetruthaboutcars.com/2014/04/barra-testifies-before-us-senate-subcommittee/ http://www.thetruthaboutcars.com/2014/04/barra-testifies-before-us-senate-subcommittee/#comments Thu, 03 Apr 2014 11:55:13 +0000 http://www.thetruthaboutcars.com/?p=786625 U.S. senator accuses GM of 'culture of cover-up'

On the second and final day of testimony before Congress, The Detroit Press reports the U.S. Senate Commerce, Science and Transportation subcommittee fired several volleys at General Motors CEO Mary Barra over her lack of answers or greater action during the ongoing GM ignition recall crisis.

Finding no allies from either side of the aisle, Barra faced tough questions and criticisms from the members of the subcommittee, with the toughest attacks drawn from subcommittee head Senator Claire McCaskill of Missouri. The senator proclaimed former engineer Ray DeGiorgio “repeatedly lied” about knowledge of the April 2006 fix of the out-of-spec ignition switch, citing GM’s “culture of cover-up” as encouragement for egregious violations of the public trust.

Barra’s alleged lack of knowledge of the issues surrounding the switch recall came back to haunt her when Senator Barbara Boxer of California declared the CEO “didn’t know anything about anything,” and wondered why someone with the resume Barra has could not know anything during the 33 years she had been a part of General Motors.

Other highlights from the Senate hearing include:

  • Barra not committing to when GM’s own investigator, Anton Valukas, could be made available for questioning by the Senate, saying the decision was his to make
  • Barra not knowing how many lawsuits have been filed in relation to the out-of-spec switch, nor having been counseled by GM’s general counsel
  • Barra stating no one involved with the recall still under GM’s employ had been fired, would take action if internal investigation determined as such
  • Senator Dean Heller of Nevada wanting supplier Delphi to testify
  • Barra clarifying her comment to the House about sharing information from the internal investigation
  • GM agreeing to share documents provided by the National Highway Traffic Safety Administration with the subcommittee

Moving over to The White House, the Obama administration aims to do all they can to get a handle on the case before them, as Deputy Press Secretary Josh Earnest informed reporters aboard Air Force One during the President’s visit to Ypsilanti, Mich.:

The National Highway Traffic Safety Administration — or NHTSA — has opened a formal investigation to whether GM shared the information they had about this issue as quickly as they should. Secretary Foxx has also asked the inspector general of the Department of Transportation to conduct an audit to provide a single, comprehensive review of NHTSA’s work in this case.

Finally, The Detroit News posits that Barra’s legacy — and that of General Motors — would long be haunted by nine words uttered by an unknown GM engineer in 2005 over fixing the out-of-spec switch: “None of the solutions represents an acceptable business case.”

On the lawsuit front, attorney Dana Taschner — one of the lawyers involved in the 15 lawsuits filed in federal court on behalf of affected Chevrolet Cobalt owners — wants the cases consolidated and sent before U.S. District Judge James Selina in Santa Ana, Calif., according to Bloomberg. Tascher’s reasoning is that Selina, who is presiding over the cases linked to Toyota’s unintentional acceleration debacle, is the right judge for the job of taking GM to task:

The scope of the expanding recall and number of cars and consumers involved will result in a high volume of lawsuits filed in multiple jurisdictions warranting coordinated or consolidated proceeding.

Detroit Free Press reports safety advocate and chairman emeritus of consumer advocacy group Public Citizen Joan Claybrook is calling for reform from both GM and the NHTSA. Regarding the former, Claybrook believes Barra “has more power than any GM executive probably ever had,” and could lead the reform path toward a focus on safety over costs.

As for the latter, Claybrook — who led the agency between 1977 and 1981 — wants the NHTSA to have more resources available to do its duty to the public, change the complaint-filing process for ease-of-use by consumers, and be granted the authority to purse criminal charges against automakers who fail to recall dangerous products.

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Barra, Friedman Testify Before US House Committee http://www.thetruthaboutcars.com/2014/04/barra-friedman-testify-before-us-house-committee/ http://www.thetruthaboutcars.com/2014/04/barra-friedman-testify-before-us-house-committee/#comments Wed, 02 Apr 2014 14:00:59 +0000 http://www.thetruthaboutcars.com/?p=786393 Mary Barra

General Motors CEO Mary Barra and National Highway Traffic Safety Administration acting administrator David Friedman both testified before the U.S. House Energy and Commerce Committee in the first of two congressional hearings focused on GM’s 2014 recall of an ignition switch whose issues the automaker nor the agency chose to act upon in a swift manner in the decade leading up to the recall.

The Detroit News reports the hearing between the committee and Barra lasted two and a half hours, and while the atmosphere was calm for the most part, the elusive answers Barra gave to some questions proved frustrating to the bipartisan committee. A possible reason for the vague responses provided by Barra: Any incorrect answers could come back to haunt the company via a charge of misleading Congress by the Justice Department, who is already conducting an investigation into GM’s handling of the recall.

She also pleaded her case for patience from the federal government while the internal investigation into the recall continues, and repeatedly stood by her talking points throughout the questioning. However, when the committee asked if GM would commit to delivering the final report from the internal investigation to Congress, Barra said her company would turn over “what’s appropriate.”

Meanwhile, she revealed GM had hired attorney Kenneth Feinberg to guide the company’s executives for the next 30 to 60 days into deciding how the automaker will proceed to do “the right thing” by their customer base. Feinberg, who helped establish compensation funds for those affected by 9/11, the Boston Marathon bombing and the BP/Deepwater Horizon oil spill, may direct GM to create such a fund for affected owners whose vehicles were involved in crashes prior to the company’s bankruptcy filing in 2009, though Barra said she couldn’t commit to such a fund under questioning, opting to let Feinberg find “the best way forward.”

Following Barra’s testimony, Friedman took his turn before the House committee, defending his agency’s decision not to move forward with a formal investigation into the ignition switch issue, citing lack of data from General Motors in 2007.

He also explained that the NHTSA had voiced concerns about a number of problems GM hadn’t disclosed, such as the silent part-swap in April 2006 or the automaker’s talks with Delphi over air bags. In turn, the committee asked Friedman why his agency missed a number of red flags and failed to connect the dots in what the agency did learn from their dealings with GM. He said his agency followed proper protocol in its final decision in that there was insufficient information to press forward with a formal investigation. Friedman added that the NHTSA aims to improve this process, as well as increasing penalties for actions such as those demonstrated by GM.

The families affected by the recall witnessed the proceedings from the back of the hearing room, hoping to receive satisfactory answers from Barra as reminders of what the automaker’s poor choices had cost them hung above their heads. One of the affected, Mary Ruddy of Scranton, Penn., put it thusly:

I did not care for the answers from Ms. Barra. I thought she was very evasive, and if she’’s that evasive with the United States government… then how can we expect them to be honest with the general public.

Ruddy’s husband, Leo, also bemoaned Barra’s tactics before the committee, summing up the experience as if “it was like talking to Sgt. Schultz ["Hogan's Heroes"] — ‘I know nothing.’”

The Ruddys were among the families who met with members of Congress before a press conference calling for the establishment of a victims’ compensation fund, pulling affected vehicles off the road, strengthen current auto safety legislation, and a criminal investigation of GM by the Justice Department.

Finally, though the Chevrolet Silverado was knocked off of its pedestal by Ram’s offerings since 1999, Automotive News reports the fullsize pickup and its GMC Sierra twin helped boost GM’s overall U.S. light-duty vehicle sales in March by 4 percent to 256,047 vehicles. Overall retail sales also gained in March, rising 7 percent compared to the previous year.

As for the twins, Chevrolet’s sales rose 7 percent in March while GMC experienced a 21 percent growth, all of which is setting the place for upcoming product launches later this year, according to GM U.S. vice president of sales operations Kurt McNeil:

GM’s retail sales, like the weather and the economy as a whole, have been on an improving trend since early February. We expect to see solid economic growth in the months ahead, with the job market, household income and consumer spending all showing positive signs.

It is a strong backdrop for the launch of our all-new heavy-duty pickups, large SUVs and other new products, like the Cadillac ATS coupe coming this summer.

Transaction prices also went up in March, coming out on a record average of $34,000, as well as a 5 percent increase in commercial fleet sales; fleet sales fell by 5 percent in a planned reduction by the automaker.

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GM Recalls 1.3 Million Additional Vehicles As Barra Heads To D.C. http://www.thetruthaboutcars.com/2014/04/gm-recalls-1-3-million-additional-vehicles-as-barra-heads-to-d-c/ http://www.thetruthaboutcars.com/2014/04/gm-recalls-1-3-million-additional-vehicles-as-barra-heads-to-d-c/#comments Tue, 01 Apr 2014 10:07:19 +0000 http://www.thetruthaboutcars.com/?p=785569 GM

The Detroit News reports General Motors CEO Mary Barra boarded a commercial flight from Detroit to Washington, D.C. Sunday in order to prepare for two separate hearings before Congress regarding her company’s handling of the ongoing 2014 recall crisis. While in the nation’s capital, she also met with 25 family members whose relatives were killed in crashes linked to the ignition switch behind the recall.

CNN Money adds GM is about to reveal the names of the 13 people who lost their lives due to catastrophic failure linked to the defective part. The information will be made available to the public, with sensitive information — corporate secrets and personal data — redacted prior to publication. The information is part of a request by the National Highway Traffic Safety Administration due April 3.

As for what Barra and NHTSA acting administrator David Friedman plan to say before the House and Senate hearings, Automotive News reports Friedman is standing firm on his agency’s effort to “properly carry out its safety mission based on the data available to it and the process it followed” in prepared remarks to the House Energy and Commerce Committee, while Barra reiterates her position on the events leading up to the recall and subsequent actions moving forward:

When we have answers, we will be fully transparent with you, with our regulators and with our customers.

Automotive News also put forth four key issues Barra and Friedman will have to explain before Congress and the general public:

  • How GM’s multiple internal investigations failed to lead to a recall sooner
  • Why NHTSA failed to launch an investigation, despite signs that a faulty switch might be causing airbags not to deploy
  • Whether and how GM’s vehicle-safety protocols have changed
  • Whether GM’s internal processes were violated or laws were broken

Tying into the fourth issue, House Democrats have found and named the engineer behind the 2006 ignition redesign as Ray DeGiorgio, who denied in a 2013 court deposition having knowledge that the part was changed. They also penned a letter to Barra stating the redesigned switch still didn’t meet spec, based on information provided by supplier Delphi confirming the switches meant for 2008 – 2011 models tested poorly alongside the switch approved in 2002 now linked to 13 fatalities and 33 crashes.

Automotive News also posits the reason behind the NHTSA not pushing forward on a recall sooner was due to a heavy focus on child deaths linked to airbags. When GM introduced a smart airbag system in their vehicles in the 2000s, the agency focused on whether or not the airbags were doing their job to protect children placed in the front seat, with the goal of assessing “real world” performance while spotting “unusual circumstances” — such as the flawed ignition switch behind the recall — that would allow for “early identification of potential problems,” according to a 2004 statement by former agency boss Chip Chidester.

In new recall news, GM recalled 1.3 million vehicles made between 2004 and 2010 whose power steering could suddenly lose electric power, with the automaker aware of “some crashes and injuries” tied to the steering. Vehicles affected include: Chevrolet Malibu, Malibu Maxx, non-turbo HHR and Cobalt; Saturn Aura and Ion; and Pontiac G6.

As for reporting issues that could lead to a recall, GM leads the way in filing early-warning reports to the NHTSA with 6,493 reports between 2005 and 2007; Chrysler and Toyota filed around 1,300 in the same period, while Honda filed 290. However, the cause behind the numbers is in how each automaker follows the 2000 TREAD Act, with GM setting an extremely low threshold for reporting in comparison to other automakers.

Finally, a number of lawsuits are being aimed directly at dismantling the liability protection GM’s 2009 bankruptcy provided to “New GM.” The tactics range from securities fraud and loss of resale value, to wrongful death.

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GM Adds 824k Vehicles To Recall http://www.thetruthaboutcars.com/2014/03/gm-adds-824k-vehicles-to-recall/ http://www.thetruthaboutcars.com/2014/03/gm-adds-824k-vehicles-to-recall/#comments Mon, 31 Mar 2014 13:00:22 +0000 http://www.thetruthaboutcars.com/?p=785137 2009_Saturn_Sky_Redline_Ruby_Red_Limited_Edition

Over the weekend, General Motors called back an additional 824,000 vehicles whose ignition switches could slip out of the “on” position, cutting power to the engine, brakes and air bags. According to Automotive News, the recall now affects Chevrolet Cobalts and HHRs, Pontiac G5s, and Saturn Ions and Skys made between 2008 and 2011. The reasoning is that while those vehicles were made after the switch was improved in April 2006, some 90,000 vehicles may have received the faulty switch during repairs.

In addition, Detroit Free Press reports GM issued a stop sale order and recall of 190,000 2013 – 2014 Chevrolet Cruzes in the United States and Canada fitted with the gasoline-powered 1.4-liter Ecotec turbo-four. The right front axle half shaft could “fracture and separate without warning” under normal driving conditions, according to the automaker.

Meanwhile, 490,200 2014 Chevrolet Silverados and GMC Sierras, as well as 2015 Chevrolet Tahoes and Suburbans and GMC Yukon XLs and Yukons, are being recalled in order to fix a transmission oil cooler line that, if not “securely seated and transmission oil leaks from the fitting,” may cause oil to spill onto hot surfaces, resulting in a fire such as the one experienced earlier this month during a test drive in California earlier this month.

The few who purchased or leased a 2014 Cadillac ELR may also need to bring their vehicles in for service. Detroit Free Press says ELRs made between Sept. 26, 2013 and Valentine’s Day 2014 without adaptive cruise control may suffer from an electronic stability system unable to perform certain diagnostics that would alert the driver if the system was either partially or fully disabled, which then could lead to a crash. GM will recalibrate the electronic brake control module for free in their recall notice, set to be issued April 17.

Speaking of Cadillac, Automotive News reports brand chief and former head lobbyist Bob Ferguson has been sent to Washington, D.C. ahead of two separate congressional hearings over the 2014 ignition recall crisis, helping the automaker to prepare. Though insiders have speculated Ferguson could once again return to D.C. permanently as GM’s vice president of of global public policy, the automaker offered nothing more than what Ferguson was doing for them currently.

Bloomberg, Automotive News and Detroit Free Press report GM has had a difficult time with the ignition switch used in their small cars. The switch had been altered three times in five years, beginning with the inability to start 2003 – 2006 Saturn Ions thanks to a defect related to the car’s Passlock theft-deterrent system. The fix, which included a new part number, led to the headache currently being experienced by the automaker.

However, the fix that would have cured the new switch’s ability to accidentally shut vehicles down — such as the Chevrolet Cobalt — was cancelled in 2005 by GM on the words of a project engineering manager who cited costly tooling and piece prices as reasons not to press forward. The part was approved by GM in 2002, despite Delphi — who made the part for GM — noting the switch did not meet specification, nor did the 2006 ignition that, while preventing the slip issue linked to 31 crashes and 13 deaths, was still below what General Motors had requested.

As for the agency responsible for pushing this issue into the spotlight much sooner than 2014, Detroit Free Press says a review by the Associated Press of complaints made to the National Highway Traffic Safety Administration between 2005 and 2014 found 164 drivers of 2005 – 2007 Chevrolet Cobalts experienced their vehicle shutting down with no warning; only the Toyota Corolla of the same vintage — recalled during the government’s investigation into Toyota in 2010 — saw more complaints.

In addition, an unnamed official who headed the NHTSA’s Defects Assessment Division recommended in 2007 an investigation as to why air bags in 2003 – 2006 Cobalts and Ions didn’t deploy, stating complaints made to the agency in 2005, along with early warning data gathered from related repairs and injuries, justified such action.

Bloomberg adds the cars linked to the faulty switch were marketed to first-time drivers, whose inexperience behind the wheel may have added to the chain of events leading to the number of crashes and fatalities documented thus far. Though GM stated in 2005 the driver could regain control by shifting to neutral and restarting, auto-safety experts and driving instructors, such as American Drivers Traffic Safety Education Association CEO Allen Robinson, said the scenario presented by the ignition failure would be hard to manage by most drivers:

It’s going to be a real problem and most people are not going to know how to deal with it.These sorts of mechanical failures are so infrequent that you can’t really prepare people for them.

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GM Hires New Safety Czar As Barra, Service Bulletins Go Under The Microscope http://www.thetruthaboutcars.com/2014/03/gm-hires-new-safety-czar-as-barra-service-bulletins-go-under-the-microscope/ http://www.thetruthaboutcars.com/2014/03/gm-hires-new-safety-czar-as-barra-service-bulletins-go-under-the-microscope/#comments Wed, 19 Mar 2014 17:15:11 +0000 http://www.thetruthaboutcars.com/?p=775713 File photo of General Motors logo outside its headquarters at the Renaissance Center in Detroit

General Motors CEO Mary Barra has appointed executive Jeff Boyer to the newly created position of Vice President, Global Vehicle Safety. Meanwhile, Barra and her company’s use of service bulletins in lieu of recalls will both go under the microscope, with the new CEO likely to testify before Congress next month.

Automotive News and Just-Auto report Boyer will provide vehicle safety updates on a frequent and regular schedule to GM’s senior management, board of directors and Barra:

This new role elevates and integrates our safety process under a single leader so we can set a new standard for customer safety with more rigorous accountability. If there are any obstacles in his way, Jeff has the authority to clear them. If he needs any additional resources, he will get them.

Boyer, Barra and a number of GM execs are likely to testify before Congress sometime next month over the decade-delayed recall of 1.76 million vehicles affected globally by a flawed ignition switch that could deactivate engine power and airbags if the key is weighed down by unessential items, with her statements to highlight GM’s focus on the consumer in light of the recall going forward.

Meanwhile, the automaker’s use of service bulletins in lieu of potentially costly recalls — such as the aforementioned ignition recall — may cost GM more than the $35 million in fines the National Highway Traffic Safety Administration could levy on the automaker in terms of reputation, though they may not be alone in sharing the blame.

In 2005 and 2006, two bulletins related to the switch were sent to dealerships with instructions for dealers to ask drivers to remove unessential items from their key rings. Bulletins in general are issued for non-safety issues affecting a vehicle, and are made know only to service shops and the NTHSA, though a 2012 law entitled Moving Ahead for Progress in the 21st Century — requiring the NTHSA to create a searchable public database by 2013 — would have solved the problem had the agency fulfilled the mandate.

According to Center for Auto Safety executive director Clarence Ditlow, bulletins such as the two issued by GM over the switch result in only 10 percent or fewer affected vehicles undergoing necessary repairs, while recalls as administered by the NTHSA through the Motor Vehicle Safety Act pull in 70 percent.

Ditlow also says automakers — looking out for financial incentives — generally seek out other fixes short of an official recall, placing the NTHSA in the position of negotiator when a recall is needed, leading to the situation where the agency itself is under the microscope as Congress probes into why the NTHSA didn’t push hard enough for a recall as early as 2007, when two deaths in Wisconsin related to the switch were brought up before GM executives.

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Fisker Taken Out Behind Capitol Hill’s Woodshed http://www.thetruthaboutcars.com/2013/04/fisker-taken-out-behind-capitol-hills-woodshed/ http://www.thetruthaboutcars.com/2013/04/fisker-taken-out-behind-capitol-hills-woodshed/#comments Thu, 25 Apr 2013 11:00:47 +0000 http://www.thetruthaboutcars.com/?p=486114

Congressional Republicans blasted current and former Fisker executives, as well as an official from the Department of Energy over missed milestones for their Department of Energy loans, which saw the company repeatedly fail to meet obligations while continuing to receive taxpayer money.

Fisker has had a trouble history as an automaker, despite its namesake’s success in penning iconic designs for the likes of BMW and Aston Martin. California Republican Congressman Darrell Issa compared Fisker to the likes of Preston Tucker, John DeLorean and Malcolm Bricklin, blunty telling Fisker “Quite frankly, innovative cars have a history of failing.”

But for many Republicans, their ire was aimed less at Fisker than at the Department of Energy. Sub-committee chairman Jim Jordan noted that

“Taxpayers have effectively subsidized luxury novelty vehicles for the likes of Justin Bieber, Leonardo DiCaprio and Al Gore,” Jordan said. “Fisker was not a well thought out startup. It had a fancy design and big names behind it, but no real business acumen. It was never destined to be a company of job creators, rather skillful rent-seekers.”

Fisker’s funding was cut off in 2011, after Fisker had received $192 million of a $529 million loan had been granted. A judge ruled that Fisker had failed to reach production and sales milestones associated with the loan. While the Karma was built in Finland, the next product, the smaller Atlantic sedan, was ostensibly going to be built in a former GM plant in Delaware. But supplier issues (including the bankruptcy of A123 Systems, their battery supplier) along with Fisker’s various recalls and mechanical problems with the Karma, helped derail Fisker’s plans.

Currently, Fisker’s prospects look quite bleak. Bankruptcy is predicted by a number of industry observers, and Fisker COO Bernard Koehler stated “whether the company will find new investors or whether the company may be obliged to seek bankruptcy protection.”

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California Congressman Alleges CAFE Benefits Bailout Recipients http://www.thetruthaboutcars.com/2012/08/california-congressman-alleges-cafe-benefits-bailout-recipients/ http://www.thetruthaboutcars.com/2012/08/california-congressman-alleges-cafe-benefits-bailout-recipients/#comments Fri, 10 Aug 2012 19:38:28 +0000 http://www.thetruthaboutcars.com/?p=456316

Bloomberg is reporting that House Republicans, led by California Congressman Darrell Issa, are set to produce a report that heavily criticizes CAFE as a politicized move designed to curry favor with bailed out auto makers and environmental groups.

Issa called CAFE

“a raw political process designed to appease environmental extremists…The impact of this process will not be immediate but will be felt by manufacturers forced to make, dealers forced to sell, and consumers forced to purchase far different, more expensive and less safe vehicles,”

Singled out in particular by Issa were the influence exerted by California (which can write its own rules if it is unsatisfied with the federal government’s own rules) and environmental groups. The Detroit News reports that Toyota, along with other foreign automakers, were unhappy with the deal, and they perceived favoritism towards the home team.

Automotive News, quoting the paper, recounts how Toyota Motor Sales U.S. head  Jim Lentz told Ron Bloom, then the White House chief negotiator, how Toyota felt.

“Japan is angry. Feel like they have been screwed,” according to handwritten notes from Toyota, the News reported today. The paper said Toyota wanted credits for hybrid vehicles — similar to credits that were extended to natural gas, flex-fuel and electric vehicles — and wanted more flexibility to use car credits for meeting truck standards.”

Another sticking point for Toyota was the slippery definition of what exactly constitutes a truck. The Big Three had been using this as a way to shift vehicles, like the Chrysler PT Cruiser, into the “truck” column to help bring down their fuel economy averages on the truck side.

Toyota also argued that the definition of a full-sized pickup truck — a stronghold of Detroit automakers for years — had been written to exclude the Toyota Tundra. Lentz said the deal was an “old Detroit tactic. It may hurt me, but it hurts my competitors more,” Toyota’s notes said, the News reported. But the White House was eager for Toyota to support the deal. “It looks bad for me and bad for you if Toyota is not there,” Bloom told Lentz at one point during the process, the News reported.

 

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Florida Congressman Allen West Blames Obama For $70 Hummer H3 Fill-Up http://www.thetruthaboutcars.com/2012/02/florida-congressman-allen-west-blames-obama-for-70-hummer-h3-fill-up/ http://www.thetruthaboutcars.com/2012/02/florida-congressman-allen-west-blames-obama-for-70-hummer-h3-fill-up/#comments Fri, 24 Feb 2012 20:25:33 +0000 http://www.thetruthaboutcars.com/?p=432644

Florida Congressman Allen West is blaming President Barack Obama for paying $70 every time he wants to fill up his Hummer H3. Not surprisingly, media outlets, as well as commenters on West’s Facebook page, are up in arms.

The Hummer name undoubtedly carries negative connotations when it comes to fuel economy, but in the grand scheme of things, the H3 is quite mild, with its roots in the fairly light-duty Chevrolet Colorado/GMC Canyon twins. The DOE’s own fuel economy site lists West’s 2008 H3 as getting between 14 and 15 mpg combined – hardly impressive for a small SUV.

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66 House Reps Move To Block 2017-2025 CAFE Proposal http://www.thetruthaboutcars.com/2011/10/66-house-reps-move-to-block-2017-2025-cafe-proposal/ http://www.thetruthaboutcars.com/2011/10/66-house-reps-move-to-block-2017-2025-cafe-proposal/#comments Thu, 20 Oct 2011 20:34:22 +0000 http://www.thetruthaboutcars.com/?p=415378 The Detroit News reports that 66 US Representatives wrote to the House Appropriations Committee today to urge a measure blocking the EPA from regulating fuel economy in the 2017-2025 period. The letter, signed by 64 Republicans and three Democrats requests

A one-year ‘time out’ is necessary as EPA and (California) are setting national fuel economy standards without explicit authorization by Congress, under laws not designed to regulate fuel economy

According to the DetN, “the proposal would let the National Highway Traffic Safety Administration go forward with setting fuel economy requirements, but under the law it could only set new requirements through 2021.” And unlike past battles over CAFE, opposition this time around does not appear to be coming from the OEMs, but from NADA, the new car dealer lobby group. The only OEM to not sign onto proposed 2017-2025 standards is Volkswagen, which is reportedly in talks with regulators over the proposal.

Meanwhile, environmental groups lashed back at NADA, with a number of groups sending a letter to the lobbying group arguing that

These standards are supported by major automakers, the United Auto Workers, California and other clean car states, and numerous consumer, environmental, business and national security organizations. By continuing to oppose these standards, NADA is trying to sell Congress, dealers and the American people a lemon

The response from dealers?

Dealers face the customer every day and fully understand what will happen if vehicle prices rise $3,000 to $10,000. None of the organizations that sent this letter, DOT (Department of Transportation) or EPA, fully understand the cost of these fuel economy increases and the impact that it will have on auto sales.

The revived debate comes just days after Edmunds CEO Jeremy Anwyl argued that proposed regulations failed to take consumer preference into account. With Rep Darryl Issa attacking CAFE and GHG regulation on all fronts, and with plenty to criticize in the proposed standards, expect this debate to rage on.

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US House Committee Blasts National Toll Road Bank Proposal http://www.thetruthaboutcars.com/2011/10/us-house-committee-blasts-national-toll-road-bank-proposal/ http://www.thetruthaboutcars.com/2011/10/us-house-committee-blasts-national-toll-road-bank-proposal/#comments Fri, 14 Oct 2011 14:31:17 +0000 http://www.thetruthaboutcars.com/?p=414723

A top congressional leader on Wednesday made clear his opposition to President Obama’s idea of spending $10 billion to create a national infrastructure bank (view details). The bank, part of the White House jobs bill, would offer public subsidy for the financing of “public private partnerships” — which most often would take the form of a toll road. The chairman of the US House Transportation Committee said at a hearing the president’s plan would not advance.

“A national infrastructure bank is dead on arrival in the House of Representatives,” Chairman John Mica (R-Florida) said. “If you want a recipe to put off job creation, adopt that national infrastructure bank proposal.”

Opponents called the proposal a “distraction” from the issue of a long-term highway program reauthorization bill which would include funding for state-level toll road banks. Already, thirty-two states have their own infrastructure banks which have financed $6.3 billion in loan agreements along the same lines as the proposed federal bank.

“Many people are skeptical that bureaucrats in Washington would have any idea which transportation projects are most deserving of receiving a federal loan,” Highways and Transit subcommittee Chairman John J. Duncan, Jr (R-Tennessee) said. “This skepticism is why Congress has already established the state infrastructure bank program in SAFETEA-LU.”

In addition, the US Department of Transportation already provides federal credit for transportation projects under the Transportation Infrastructure Finance and Innovation Act (TIFIA), which has offered $8.4 billion in project finance. Dozens of other financing mechanisms are offered by the Federal Highway Administration.

“Why build one when you could build two for twice the price?” Representative Howard Coble (R-North Carolina) said sarcastically.

Democrats offered the only backing for the bank idea.

“Before Wall Street destroyed the economy, I had said, ‘Well, I really don’t see the need for an infrastructure bank — most of the states have good credit and they can go out and borrow on their own at very good rates,” said subcommittee Ranking Member Peter DeFazio (D-Oregon). “But that isn’t the case any more. The states need guarantees, they need help, many are against their borrowing limits, and most of the banks generously bailed out by Congress — not by me, I didn’t vote for it — aren’t lending. Credit and bond markets are tight.”

DeFazio only supports the use of the bank only for water, sewer and energy projects. He does not support tolls on existing interstates.

[Courtesy: Thenewspaper.com]

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Chevy-Dealing Congressman: “There Is No Market” For The Volt http://www.thetruthaboutcars.com/2011/10/chevy-dealing-congressman-there-is-no-market-for-the-volt/ http://www.thetruthaboutcars.com/2011/10/chevy-dealing-congressman-there-is-no-market-for-the-volt/#comments Thu, 13 Oct 2011 22:27:10 +0000 http://www.thetruthaboutcars.com/?p=414608

In addition to being a representative from Pennsylvania, Republican Mike Kelly is also a Chevrolet dealer whose family has sold Chevys since 1953. But in recent hearings on government fuel economy ratings, he laid into his brand’s green halo car, the Chevy Volt with surprising zeal. Or, not-so-surprising, when you realize that he decided to run for congress in the wake of the bailout-era dealer cull.

I’m a Chevrolet dealer… we have a Chevy Volt on the lot, it’s been there now for four weeks. We’ve had one person come in to look at it, just to see what it actually looks like… Here’s a car that costs $45,763. I can stock that car for probably a year and then have to sell it at some ridiculous price. By the way, I just received some additional information from Chevrolet: in addition to the $7,500 [federal] tax credit, Pennsylvania is going to throw another $3,500 to anybody foolish enough to buy one of these cars, somehow giving them $11,000 of taxpayer money to buy this Volt.

When you look at this, it makes absolutely no sense. I can stock a Chevy Cruze, which is about a $17,500 car and turns every 30 to 40 days out of inventory… or I can have a Volt, which never turns and creates nothing for me on the lot except interest costs… So a lot of these things that we’re seeing going on have a tremendous economic impact on people who are being asked to stock them and sell them. There is no market for this car. I do have some friends who have sold them, and they’re mostly to people who have an academic interest in it, or municipalities who are asking to buy these cars.

With dealers like that, who needs competitors? Seriously, Kelly even says he fired the guy who ordered a Volt for his dealership… which he then counts against the Volt’s job creation record. Hit the jump for the rest of his quote.

I can tell you… as far as job creation, the guy who ordered that Volt for my store is no longer in that job. So it actually worked against him. I was told that the reason that car is on our lot is that General Motors told him he had to stock it. I said “let me understand. I told you that under no circumstances were you to order a Volt,” and he said “yeah.” “So, why did you order it?” “Because General Motors told me.” “Is this the same General Motors that tried to take my Cadillac franchise from me? These are the guys you’re listening to, but the guy who signs your paycheck doesn’t have as much influence as the guys who tried to take away the franchise?”

So clearly Kelly has his reasons for disliking his business partners at GM, but bashing a car that Chevy managers insist is a brand-building halo is still surprising. In any case, this somewhat rambling but fascinating critique eventually led to question “do you see any market for this car at all?” directed at Edmunds CEO Jeremy Anwyl… who first took the opportunity to defend the Volt.

Well, there’s a little bit of good news. First, you mentioned that it did create some traffic for you, albeit one person. But that is something the car companies tout, that these vehicles do attract some interest, some traffic, not necessarily buyers. And let me also say, the Volt is actually a very nice vehicle. We actually bought one ourselves, it’s in the long-term fleet… people actually enjoy it.

But then came the bad news.

The problem that I think you’ve outlined is really twofold. One of them is that there are all sorts of inducements for people to be buying these vehicles… and yet when you look at whose been buying these vehicles, and there are people buying them, they are at the very high end of the demographic scale… Right now we’re seeing people who would have bought that vehicles anyway, without a tax credit, getting the tax credit at the expense of other taxpayers, and you have to wonder about the wisdom of that.

The second part of the Anwyl’s critique would have to wait, because after getting in one last knock at the Volt, Kelly was out of time. Rep Jackie Speier (D-CA) was next in line, and she jumped on Kelly’s Volt-bashing, telling him

First of all, to Mr Kelly, send that Volt to California! It doesn’t have to stay on your lot, because there is a waiting list in my district, at my Chevrolet dealership, of six months to get a Chevy Volt.

To which Kelly replied,

Give me the name of the dealer, and I’ll send it out there right away. If he’ll pick up the transportation cost, I’d love to do that.

The name was exchanged, and jokes were made about bipartisanship and “working together.” Then the partisan back-and-forth continued. You gotta love Congress.

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Anwyl: CAFE Proposals “Ignore Consumers” Who Are “Not On Board” http://www.thetruthaboutcars.com/2011/10/anwyl-cafe-proposals-ignore-consumers-who-are-not-on-board/ http://www.thetruthaboutcars.com/2011/10/anwyl-cafe-proposals-ignore-consumers-who-are-not-on-board/#comments Thu, 13 Oct 2011 21:33:08 +0000 http://www.thetruthaboutcars.com/?p=414605

The Congressional Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending held hearings this week on proposed CAFE standards, as part of Chairman Darryl Issa’s investigation of the regulations. The first panel’s testimony can be seen in its entirety in the video above (all prepared testimony can be found in PDF format here), and it’s worth watching. Though the predictable D.C. partisanship certainly shows up, Anwyl’s testimony was the highlight the hearing, being a tough but fair analysis of the standards. Hit the jump for a brief roundup.

The panel in question had two clearly partisan witnesses: Marlo Lewis of the Competitive Enterprise Institute, and Roland Hwang of the Natural Resources Defense Council. But the contributions of both Edmunds CEO Jeremy Anwyl and Ohio-based independent trucker Scott Grenerth were authentic and revealing, despite being very different in content. While Grenerth provided a ground-level perspective on practical issues with new truck emissions regulation (which is not really our department here at TTAC), Anwyl provided the most germane testimony for students of the passenger car industry: a critique of the lack of consumer input in new standards.

His argument is not complicated, and his submitted testimony (along with graphs and commentary) can be found here. In his own words,

I have three points to make this morning.

The first is that — up until now — consumers have been either ignored or misrepresented.

The second is that consumers matter.

The third is that consumers are definitely not on board.

In support of his first point, Anwyl cites the EPA’s own presentations which list environmental groups, auto firms, technology suppliers, labor unions, governmental agencies and EV charging firms as “stakeholders,” without ever referring to consumers. He goes on to argue that

I know there have been polls showing consumers “want” higher mileage standards. These polls are worse than meaningless; they are grossly misleading. Instead of polls, we should first and foremost be guided by what consumers are actually doing; by actual purchases.

And, argues Anwyl, consumers are not buying cars for fuel efficiency. Using Edmunds.com market data and its proprietary market simulator (which looks to be fairly strong considering Edmunds’ strong record in our new Grade The Analysts feature), Anwyl shows that even among subcompact purchases, fuel economy maxes out as a 15% vehicle attribute weighting. In every segment, fuel economy is a less-important attribute than “brand.” Moreover, Anwyl points out that consumers expect a 12-month return on investment in fuel-saving options like hybrid drivetrains, when in fact they tend to run much longer than that (6-9 years for Camry, for example).

Anwyl sums up

I do have some good news: looking back, the auto industry seems to have delivered the impossible. They have added features, increased safety, elevated performance—and delivered increased fuel economy. Much of this during a period when CAFE standards were stable. I credit mostly the advance of technology and expect this progress to continue. But if mandates trigger an escalation of prices, a reduction in consumer utility or the adoption of technologies before they have been proven, consumers will react. We saw this play out before in the late Seventies and early Eighties when the domestic auto industry, torn between mandates for greater fuel efficiency and consumer demand for larger vehicles, introduced a generation of truly awful vehicles. The reputational damage from this era lingers today.

Push too far, too fast and we could easily destabilize an industry that is a vital engine of our collective prosperity.

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EPA Inspector General Questions GHG Emissions Science, Issa Attacks On All Fronts http://www.thetruthaboutcars.com/2011/09/epa-inspector-general-questions-ghg-emissions-science-issa-attacks-on-all-fronts/ http://www.thetruthaboutcars.com/2011/09/epa-inspector-general-questions-ghg-emissions-science-issa-attacks-on-all-fronts/#comments Sat, 01 Oct 2011 01:59:17 +0000 http://www.thetruthaboutcars.com/?p=413095

In a report released earlier this week [PDF], the EPA Inspector General criticized the Technical Support Document for the portion of greenhouse gas regulation dealing with “Endangerment,” or the possible effects of greenhouse gasses. Inspector General Arthur A. Elkins Jr. summed up his office’s findings [PDF], writing

The OIG evaluated EPA’s compliance with established policy and procedures in the development of the endangerment finding, including processes for ensuring information quality. We concluded that the technical support document that accompanied EPA’s endangerment finding is a highly influential scientific assessment and thus required a more rigorous EPA peer review than occurred. EPA did not certify whether it complied with OMB’s or its own peer review policies in either the proposed or final endangerment findings as required. While it may be debatable what impact, if any, this had on EPA’s finding, it is clear that EPA did not follow all required steps for a highly influential scientific assessment. We also noted that documentation of events and analyses could be improved.

Oy vey. Greenhouse gas science controversy. So, what’s the problem really about?

The question basically comes down to the way the EPA assesses outside data, and whether data assessments were worthy of the Technical Support Document (TSD)’s importance. Or, to put it into DC style “summary.”

In our opinion, the TSD was a highly influential scientific assessment because EPA weighed the strength of the available science by its choices of information, data, studies, and conclusions included in and excluded from the TSD. EPA officials told us they did not consider the TSD a highly influential scientific assessment. EPA noted that the TSD consisted only of science that was previously peer reviewed, and that these reviews were deemed adequate under the Agency’s policy. EPA had the TSD reviewed by a panel of 12 federal climate change scientists. This review did not meet all OMB requirements for peer review of a highly influential scientific assessment primarily because the review results and EPA’s response were not publicly reported, and because 1 of the 12 reviewers was an EPA employee.

EPA’s guidance for assessing data generated by other organizations does not include procedures for conducting such assessments or require EPA to document its assessment. EPA provided statements in its final findings notice and supporting TSD that generally addressed the Agency’s assessment factors for evaluating scientific and technical information, and explained its rationale for accepting other organizations’ data. However, no supporting documentation was available to show what analyses the Agency conducted prior to disseminating the information.

But, there’s one more thing that the Inspector General wants to make perfectly clear:

We made no determination regarding the impact that EPA’s information quality control systems may have had on the scientific information used to support the finding. We did not test the validity of the scientific or technical information used to support the endangerment finding, nor did we evaluate the merit of EPA’s conclusions or analyses.

Accordingly the major Republican attack on the back of this report hasn’t been on the basis of GHG regulation science, but at procedural issues, most especially concerning transparency. With more than a dash of the requisite economic populism. In a statement today, House Oversight Committee Chair Darrell Issa argued

Improved fuel efficiency is a worthy goal. Unfortunately, the path pursued by the Obama Administration has the potential to increase vehicle costs for consumers, reduce passenger safety and ultimately impact American jobs. We cannot afford job-killing regulations forced through the process without regard to these consequences at a time of economic vulnerability. Further, there are real questions about the transparency of new standards negotiated in secrecy without adequate public input or concern for jobs and consumer choices.

With the news that they have delayed the release of these standards until November, it would seem the Administration is having difficulty fitting a pre-determined conclusion driven by outside special interests and the California Air Resources Board into the statutory structure created by Congress.

The general conclusion of that last sentence may seem like nothing more than a twist of the partisan knife, but there’s truth there. Earlier in the year the EPA had to coax CARB into waiting for “studies examining the technological and financial ramifications” before announcing new CAFE standards, indicating that the recent delay of the new rule until mid-November could be related to those studies. And this EPA Inspector General report just adds fuel to that fire. On the other hand, the DetN reports that the Obama Administration has already addressed Issa’s transparency concerns, noting

White House counsel Kathryn Ruemmler told Issa the government will conduct a traditional rule-writing process.

“The agencies have made clear that they intend to conduct a public rulemaking with additional opportunity for public comment,” she wrote in the Sept. 8 letter obtained by The Detroit News that has not been made public.

But Issa’s not just going after the EPA. Bloomberg reports he’s taking on NHTSA (the other agency tasked with writing CAFE) as well. Issa fired off a letter to Transportation Secretary Ray LaHood, in which he thundered

“I am concerned about the negative impact these standards could have on the safety of automobiles, the possibility that the National Highway Traffic Safety Administration acted outside the scope of congressionally delegated authority and the lack of transparency in the process leading up to the agreement”

Transparency? Scope of powers? Not my department. Safety? Well, there again Issa has done his homework. As an EPA supplemental Notice Of Intent notes

for the 2017-2025 NPRM, NHTSA and EPA will conduct an analysis of the effects of the proposed standards on vehicle safety, including societal effects. CARB is undertaking and coordinating with EPA and NHTSA on a study of how a future vehicle design that incorporates high levels of mass reduction complies with vehicle safety standards and voluntary safety guidelines. NHTSA is also initiating a new study of the feasible amount of mass reduction based on a mid-size passenger car platform, and the effects of several advanced mass reduction design concepts on fleet safety. The NHTSA studies are being coordinated with EPA, DOE, and CARB.The agencies expect that several, but not all of these studies will be completed in time to inform the NPRM. Others are expected to be completed in time to inform the final rule [Emphasis added]

In other words, Issa is concluding that a delay in the final rule could be related to this study… which could affect safety. But lets face it, cars have never been safer… and unless the EPA has a mess on its hands with this report, this could easily end up being seen as what the kids call “concern trolling.” And some will likely conclude that’s the case based on the sheer scope of Issa’s assault on GHG regulation. Issa also sent a letter to EPA Administrator Lisa Jackson today, in which, Bloomberg tells us

Issa also questioned the EPA’s role in writing a previous fuel-economy rule that takes effect next year, saying it negotiated with automakers around the same time General Motors Corp. and Chrysler LLC were getting U.S. bailout money. The timing “heightens the concern that the administration used the promise of taxpayer dollars to obtain GM and Chrysler’s support for the new fuel economy standards

This is probably the bridge too far. Issa has been harping on that theory for well over a year now, and it’s got him nowhere. And no surprise: the Obama Administration has always given the auto bailout a thin green veneer, so a successful investigation by Issa would only prove that the greenwashing had something behind it. Furthermore, the CAFE rules he’s talking about are riddled with loopholes,  and the subsequent version is even more riddled, and with larger loopholes. And that jives with what I’ve heard from industry lobbyists, who generally downplayed CARB’s power to pull the White House to the left, let alone the White House’s ability to set impossible standards. The line I got was that overhauling GM and Chrysler gave the government a “look under the hood,” which helped it see the OEM perspective on regulation.

Be that as it may, Issa is launching investigations into how the EPA and NHTSA handled auto GHG emissions regulation, adding to his ongoing investigation of the Obama Administration’s role in CAFE [PDF letter of investigation here]. He says his staff will “further review” the “serious questions” raised by the EPA Inspector General’s report. Say what you want about the guy’s politics, when he moves on something, he moves on something. And he’s definitely earning his title as Obama’s “Annoyer-in-Chief.”

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Why Did Ford Drop Its Bailout Ad? House Oversight Chair Investigates http://www.thetruthaboutcars.com/2011/09/why-did-ford-drop-its-bailout-ad-house-oversight-chair-investigates/ http://www.thetruthaboutcars.com/2011/09/why-did-ford-drop-its-bailout-ad-house-oversight-chair-investigates/#comments Fri, 30 Sep 2011 16:00:13 +0000 http://www.thetruthaboutcars.com/?p=413047

The Detroit News reports that the only Republican in Washington with subpoena power, Rep Darrel Issa has written a letter asking Ford CEO Alan Mulally for “a full and complete explanation of Ford’s decision” to stop running an advertisement that was critical of the TARP-funded auto bailout.

In a letter, Issa asks Ford if any White House, Treasury or other federal employee discussed the ad with any Ford employee “at any time via any manner of communication” and asks the automaker to turn over any documents connected to any discussion by Oct. 12.

Spokeswoman Meghan Keck said Ford will cooperate, but reiterated that the White House didn’t pressure the Dearborn automaker.

Ford took the ad off of Youtube after “individuals inside the White House questioned whether the copy was publicly denigrating the controversial bailout policy CEO Alan Mulally repeatedly supported in the dark days of late 2008,” according to Daniel Howes of the Detroit News. The same day Ford restored the video, and denied that White House pressure led to the takedown. Color us curious as to how Mulally is going to explain this little episode…

UPDATE: The Washington Post’s Plum Line reports

I just got off the phone with Detroit News managing editor Don Nauss. “We stand by our column,” he told me. “It was based on multiple sources. It’s written by a busines columnist who can draw conclusions based on the reporting that they do.”

The story contains no attribution for the central charge of White House calls to Ford. Asked about this, Nauss declined to comment.

Asked to clarify if the column was alleging any White House pressure on Ford (the story hints at it up top but quotes someone later saying there was no pressure), Nauss declined to say. “The story speaks for itself,” he said.

When contacted about his column, Howes referred me to Nauss’s comments above.

 

 

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Senators Franken And Coons Question OnStar Over New Policies http://www.thetruthaboutcars.com/2011/09/senators-franken-and-coons-question-onstar-over-new-policies/ http://www.thetruthaboutcars.com/2011/09/senators-franken-and-coons-question-onstar-over-new-policies/#comments Sun, 25 Sep 2011 18:54:29 +0000 http://www.thetruthaboutcars.com/?p=412512

Editor’s note: When I wrote about OnStar’s latest round of privacy concerns, I didn’t realize that the chairman of the Senate Judiciary subcommittee on privacy, technology and the law had voiced his own concerns in a letter published just the day before. Here is the letter, as published at Senator Franken’s website. OnStar has already said it will respond to specifically to the concerns of Senators Franken and Coons.

Ms. Linda Marshall, President
OnStar Corporation
400 Renaissance Center
Detroit, MI 48265

Dear Ms. Marshall:

We are writing to express our serious concern with OnStar’s announcement earlier this week that it would continue to track the GPS locations of its customers’ vehicles even if those customers have affirmatively ended their contractual plans with OnStar.  In this email announcement, OnStar informs its current and former subscribers that it reserves the right to track their locations “for any purpose, at any time.”  It appears that the only way to stop this tracking is to actually call OnStar and request that the data connection between OnStar and the vehicle be terminated; this service is not available online.  OnStar further reserves the right to share or sell location data with “credit card processors,” “data management companies,” OnStar’s “affiliates,” or “any third party” provided that OnStar is satisfied that the data cannot be traced back to individual customers.  See OnStar, Privacy Statement: Effective as of December 2011.  In a nutshell, OnStar is telling its current and former customers that it can track their location anywhere, anytime—even if they cancel their subscriptions—and then give or sell that information to anyone as long as OnStar deems it safe to do so.

OnStar’s actions appear to violate basic principles of privacy and fairness for OnStar’s approximately six million customers—especially for those customers who have already ended their relationships with your company.  OnStar’s assurances that it will protect its customers by “anonymizing” precise GPS records of their location are undermined by a broad body of research showing that it is extraordinarily difficult to successfully anonymize highly personal data like location.  See generally Paul Ohm, Broken Promises of Privacy: Responding to the Surprising Failure of Anonymization, 5 UCLA Law Review 1701 (2010) and Marco Gruteser and Baik Hoh, On the Anonymity of Periodic Location Samples, in Second International Conference on Security in Pervasive Computing, Boppard, Germany (2005) at 179-192.  If a data set shows the exact location where a car starts every morning, the roads that car travels on its morning commute, the office where it is parked during business hours, and the schools where it stops on its way home, it is unnecessary for that data set to include a name or license plate for it to be connected to an individual and his or her family.

We urge you to reconsider these decisions.  We also urge you to better inform your customers of their ramifications.  To that end, we request that you provide answers to the following questions:

1.      Does OnStar believe that its actions comply with federal law?
2.      Will OnStar allow its customers to deactivate their data connections online?
3.      If a customer deactivates their data connection, will OnStar delete the existing location information they have gathered for that customer?  Or does OnStar reserve the right to store and sell that information regardless of deactivation?
4.      Has OnStar ever suffered a breach of its customers’ location data?
5.      Has OnStar ever suffered a breach of any of its customers’ private information?
6.      How will OnStar protect non-anonymized data on its servers in light of recent breaches at major institutions like Citibank, Sony and the International Monetary Fund?
7.      How exactly will OnStar anonymize its location data?
8.      Will OnStar seek its customers’ consent before sharing or selling their location data to third parties?  Does OnStar believe it is legally required to do so?
9.      Will OnStar inform its customers of the entities to whom it sells location data?
10.  Has OnStar already disclosed or sold any of its customers’ location data with third parties?  Which third parties?
11.  Will OnStar agree to stop the tracking, sharing, and sale of location data for customers that have ended their subscriptions to OnStar services?

We believe that OnStar’s actions underscore the urgent need for prompt congressional action to enact privacy laws that protect private, sensitive information like location.  In the meantime, we believe that it is the responsibility of corporate citizens like OnStar to take every step possible to safeguard the privacy of their customers.

We appreciate your prompt attention to this matter.

Sincerely,

Al Franken                                                                                          Christopher A. Coons
Chairman, Subcommittee on                                                               United States Senator
Privacy, Technology and the Law

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Republicans Attempt To Gut CAFE Through EPA Funding Bill http://www.thetruthaboutcars.com/2011/08/republicans-attempt-to-gut-cafe-through-epa-funding-bill/ http://www.thetruthaboutcars.com/2011/08/republicans-attempt-to-gut-cafe-through-epa-funding-bill/#comments Mon, 01 Aug 2011 16:26:35 +0000 http://www.thetruthaboutcars.com/?p=404929

With the high political drama surrounding America’s debt ceiling crisis, last Friday’s CAFE announcement received much less attention from the media than it might have. But, flying even further beneath the radar is an attempt by Republicans to undo the fuel economy agreement that was the result of long negotiations. According to the NYT, some 39 “anti environmental” riders were attached to an Interior Department and EPA appropriations bill, including one which reads

Sec. 453. None of the funds made available under this Act shall be used— (1) to prepare, propose, promulgate, finalize, implement, or enforce any regulation pursuant to section 202 of the Clean Air Act (42 U.S.C. 7521) regarding the regulation of any greenhouse gas emissions from new motor vehicles or new motor vehicle engines that are manufactured after model year 2016 to address climate change.

Though one rider, which would have prevented any new listings on the Endangered Species Act lists of threatened and endangered species, was defeated, the NYT reports that the fuel economy rider is still pending. Politico adds that the bill is scheduled to go to the House floor today, but that President Obama is already threatening to veto the bill. Having worked with California, environmental groups and the auto industry to hammer out a compromise, it’s unlikely that the White House will approve any final bill that includes a measure to gut the new 2016-2025 standard… but the fact that Republicans are trying to eliminate the EPA’s ability to regulate fuel economy indicates that someone, somewhere wouldn’t mind seeing the newly-approved CAFE standard gutted.

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