REGULATORY UPDATES

3/11/14: “House panel demands recall data from GM, NHTSA”

A congressional committee, including House Energy and Commerce Chairman Fred Upton, R-St. Joseph, gave GM CEO Mary Barra and NHTSA head David Friedman two weeks to provide information regarding General Motor’s recall of 1.6 million vehicles for faulty ignition switches. Committee members wrote, “Problems involving ignition switches and stalls in the recalled GM models are not a recent or unknown phenomenon. Since 2003, consumers have filed numerous complaints.” Field reports related to ignition stalls, analyses of incident reports, and “documents that refer or relate to . . . correction actions” have been requested by the committee.
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3/9/14: “Former head rips NHTSA for inactivity on GM recall”

Former NHTSA head and safety activist Joan Claybrook says the safety agency “failed to carry out the law” when it failed to demand a recall for failing ignition switches when it knew of the potentially fatal problem in 2007. GM recalled 1.37 million cars in the U.S. last month because of the faulty switches and said it knows of 31 crashes and 13 deaths linked to the fault. Claybrook is asking the Department of Transportation to probe NHTSA’s alleged inadequate efforts. 
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3/9/14: “How dealers can keep their ads safe from FTC's hammer”

The FTC is still on the prowl for ads containing misrepresent vehicle prices, monthly payments and lease drive-off costs; improperly advertised lease details and financing terms; and bogus sweepstakes designed to get customers into the showroom.  Chief regulatory counsel for the National Automobile Dealers Association advises to be cautious when hiring advertising vendors and to make sure an attorney reviews ads before publication.
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3/4/14: “EPA Stops Illegal Import of Vehicles That Fail to Meet Pollution Standards”
Chinese powersports company and its related U.S. distributor (“Powersports”) settled the EPA’s complaint in which it is alleged over 12,000 highway motorcycles and recreational vehicles were illegally imported without proper certification.  In addition to paying combined civil penalties of $725,000, Powersports will recall and replace fuel tanks with better control on gasoline vapors and will take steps to control pollution stemming for failing to comply with federal emission standards.
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3/3/14: “UPDATE: Here's What They're Saying about EPA's Final Cleaner Fuel and Car Standards”
Many representatives in the automotive industry, health organizations and environmental organizations commend the EPA for taking steps to improve air quality and to reduce the amount of sulfur in gasoline.  The EPA’s press release compiles commentary from around the nation applauding the EPA’s Cleaner Fuel and Car standards. 
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3/3/14: “EPA Sets Cleaner Fuel and Car Standards, Slashing Air Pollution and Providing Health Benefits to Thousands”
The EPA finalized car and gasoline emission standards which will significantly reduce harmful pollution, like soot, smog and toxic emissions from cars and trucks and also prevent thousands of premature deaths and illnesses. By 2025, the Obama Administration’s actions to improve fuel economy and reduce greenhouse gases may also result in an average fuel savings of more than $8,000 over a vehicle’s lifetime.
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LITIGATION UPDATES

2/28/14: BMW of North America, LLC, et al. v. Autohaus K&H Inc., et al.

Plaintiff BMW of North America (“BMW”) seeks injunctive and monetary relief from defendant Autohaus K&H Inc. dba Texas European Autohaus (“AKH”) for alleged trademark infringement, unfair competition, and breach of contract with regard to BMW’s Roundel logo. According to the complaint, AKH wrongfully used BMW’s Roundel logo in their business signage. BMW prays for a disgorgement of profits gained by AKH resulting from their infringement of the Roundel logo, and for AKH to destroy all material articles bearing the infringing BMW Roundel logo. 
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2/28/14: Gossett Motor Cars, Inc. v. Compania Sud Americana de Vapores S.A.

Plaintiff Gossett Motor Cars, Inc. (“Gossett”) brings a class action against Chilean Corporation, Compania Sud Americana de Vapores S.A. (“CSAV”) for alleged anticompetitive actions resulting in the manipulation and price-fixing of “roll-on, roll-off” vehicles transported for retail in Tennessee by Tennessee automotive dealers and for allegedly fixing, raising, and maintaining shipping prices for new and used vehicles to be sold in Tennessee. Gossett, on behalf of itself and others similarly situated, demands trial by jury and seeks actual damages and costs to be paid by CSAV.
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2/27/14: Nemet Motors, LLC v. Kia Motors, Inc.

Plaintiff Nemet Motors, LLC (“Nemet”) brings suit against Kia Motors America, Inc. (“Kia”) for unlawfully issuing a notice to terminate Nemet’s Dealer Sales and Service Agreement. Nemet prays for money damages, an order enjoining Kia from terminating the Dealer Sales and Service Agreement, costs and attorney’s fees, and punitive damages. According to the complaint, Nemet alleges Kia terminated the agreement “to eliminate a franchise in Jamaica, Queens, New York and relocate its franchise to Bayside, Queens, New York, a more affluent area.”
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INDUSTRY INTERESTS

3/12/14: “NJ agrees to ban Tesla's direct sales”

A New Jersey agency has agreed to ban Tesla from selling cars directly to consumers in the Garden State. Tesla has been selling directly to shoppers at two locations in New Jersey for about a year, but state officials will now force the automaker to sell cars through a franchised car dealership.
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3/11/14: “NTSB chief who clashed with automakers will step down”

National Transportation Safety Board chair, Debbie Hersman, will step down from the position April 25 and replace Transportation Secretary Ray LaHood as president and CEO of the National Safety Council. Hersman often clashed with automakers, and in recent history called on the U.S. government to mandate new safety technologies, such as forward-collision and lane-departure warning systems in all vehicles, as well as for a ban on nearly all hands-free and hand-held cellphone calls.

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3/10/14: “Tesla’s direct-sales push raises auto dealers’ hackles”

Ohio auto dealers are filing lawsuits to halt Tesla’s Columbus and Cincinnati showrooms from allowing customers to special order Model S vehicles direct from the its factory. Dealers argue Tesla’s direct sales violate state automotive franchise laws, and fear that Tesla’s showroom model could set a precedent among automakers to sidestep franchise laws altogether. Elon Musk’s net worth climbed to $12 billion on the coattails of a 59% increase in share prices this year. Aaron Jacoby, lead attorney for Arent Fox LLP’s automotive practice, said, “What dealers are opposed to with Tesla, I believe, is that it’s the first step on the slippery slope toward dismantling the system in place that provides protections for the dealers.”
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3/10/14: “Women rising through ranks of GM”

A survey by Detroit-based professional development organization Inforum shows GM is industry-leading with 4 female board members, representing more than a quarter of its board and double the national average. GM’s appointment of Mary Barra to CEO, researchers said, “goes beyond tokenism” and reflects a commitment to gender diversity which could lead to industry-wide change. According to a 2013 survey by Inforum, women make up 6.9% of executive roles at 17 automakers and suppliers. 25 women were top executives or board directors at the companies surveyed, for an average of 1.47 per company, down from 32 female executives per company in 2007. 
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3/10/14: “Tesla supplier Amtek to spur sales with more takeovers”

Amtek Engineering Ltd. said it plans to double sales to $2 billion in five to seven years through acquisitions. The Singapore-based iPhone charger manufacturer and Tesla auto-parts maker announced it is paying nearly $210 million for Interplex Industries Inc., a U.S. prevision-tool maker, and expects automotive products to fuel the growth. Amtek CEO Daniel Yeong said, “In manufacturing, nobody’s going to put all their eggs in one small basket. They’d rather put all their eggs in one big basket.” Amtek shares have increased 20 percent this year, compared with a 1.3 percent decline in the Singapore benchmark Straits Times Index.
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3/9/14: “Report: Auto shopping site Cars.com put up for sale”

Cars.com is for sale for $3 billion according to a Wall Street Journal report, and investment bank Moelis has been retained as an adviser. The site is currently owned by Classified Ventures, comprising of a group of newspaper publishers including the owner of USA TODAY, Gannett, and former Washington Post owner Graham Holdings.
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3/8/14: “SXSW: Beats Music will stream audio to Chevrolets”

Chevrolet announced its partnership with Beats Music streaming service at the South by Southwest music festival this week. The streaming service will be available on select 2015 models through Chevrolet’s new AppShop feature and will utilize broadband wireless connection technology for integration. The new subscription streaming service allows paying customers to access its catalog on the internet and can be accessed through various devices. 
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3/6/14: “Fisker allowed to borrow $4.98 million from Wanxiang”
Fisker Automotive Holdings, Inc. received court approval for an interim financing of $4.98 million from Wanxiang Group, the Chinese auto-parts maker that won an auction for the bankrupt automaker. Fisker will return on March 21 to seek approval for the rest of the $10.5 million debtor-in-possession loan. Fisker listed assets of up to $500 million and debt up to $1 billion in its Chapter 11 petition.
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3/6/14: “Consignors to develop multiplatform bidding for online auctions”

Manheim, ADESA, and independent auctions announce the development of a joint platform which allows simultaneous bidding on vehicles listed across multiple online auction sites. The auction representatives have formed a steering committee to oversee the development of the platform, and as retained Auto Auction Services Corp. to build and maintain the hub technology. The platform should be reading for testing in the second half of 2014.
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3/4/14: “Crisis in Ukraine threatens Russia as market for auto sales growth”

Auto executives say that a prolonged Ukrainian crisis could not only derail the already weak rebound in European car sales, but also threaten a recovery in the broader European economy. Many automakers treat Russia as part of the European market; last year it had 2.6 million vehicle sales, compared to Germany’s European market-leading 2.9 million sales. President of General Motors Dan Ammann said, “The situation in Russia is something we are watching very closely. We do have a significant business in Russia.” Other auto industry CEOs are voicing concern over the conflict and ensuing Russian currency inflation. Jerome Stoll, head of Renault sales, said, “If Russians have less buying power, they may not buy as many cars . . . It’s a very complex situation.” 
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RECALLS

3/7/14: “6,954 Honda CB500 and CBR500 Motorcycles From 2013”

Honda recalled certain 2013 CB500 (FA, F, XA, X) and CBR500 (RA, R) motorcycles for engine bolts that may have been manufactured incorrectly, which could result in loss of power and engine stalling. 
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3/6/14: “7,067 Toyota Highlander Vehicles From 2014”

Toyota recalled certain 2014 Highlander vehicles manufactured 11/20/13 through 1/18/14 for the third row middle seat belt which may not be properly anchored, increasing the risk of injury in the event of a crash.  The affected vehicles fail to conform to the requirements of Federal Motor Vehicle Safety Standard No. 210, "Seat Belt Assembly Anchorages."
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2/28/14: “5,664 Chrysler Ram ProMaster Vehicles From 2014”

Chrysler recalled certain 2014 Ram ProMaster vehicles manufactured 7/1/13 through 11/15/13 for potential brake fluid leakage, resulting in a reduction of brake performance and increasing the risk of a crash. 
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