9/30/13: “Shutdown would force NHTSA to stop vehicle investigations”
The government shutdown not only causes investigations and public notification of new auto recalls to stop, but functions funded by annual appropriations will be suspended. The functions affected by the shutdown include safety defect investigations, field crash investigations, setting new regulations for autos, investigations into odometer fraud, and vehicle safety research such as the “connected vehicles”.
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9/23/13: “FTC Sues to Stop Massive Sweepstakes Scam”
The Federal Trade Commission (FTC) files a complaint against Liam O. Moran and his Nevada based companies for allegedly taking more than $11 million from consumers throughout the United States and dozens of other countries throughout the world, including Canada, the United Kingdom, France, and Japan in a massive sweepstakes scam. The court order temporarily stops the illegal conduct, freezes the operation’s assets, and appoints a receiver over the corporate defendants.
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9/20/13: “Automakers’ lending practices probed by U.S. agencies for bias”
The Consumer Financial Protection Bureau (CFPB) and the Department of Justice (Justice) requested data from several auto lenders, including the finance units of Toyota Motor Corp. and Honda Motor Corp., for its investigation into auto manufacturers for pricing practices of loans and possible discrimination in lending.
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9/16/13: “DOT Seeks to Renew Part of the NASS Information Collection”
The Department of Transportation (DOT) sent a request to the Office of Management and Budget (OMB) to renew an information collection request (ICR) under the National Automotive Sampling System (NASS) and the Crashworthiness Data System (CDS). Both systems use real world crash data to assist DOT rulemaking in addition to various private and academic purposes.
View a PDF of the Release
9/12/13: “EPA Seeks to Renew Collection of fees for Granting Certificates of Conformity”
The Environmental Protection Agency (EPA) is seeking to renew an existing information collection request (ICR) that allows the agency to collect fees for certifying that certain classes of vehicles, engines and evaporative emissions comply with EPA standards.
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9/12/13: “DOE Announces App for Used Vehicle Fuel Economy Stickers”
Thanks to a new Department of Energy (DOE) app, new car window sticker information, which displays fuel economy and emissions information, can now be created for used cars. On Sept 12, DOE announced a new app that allows the public to create similar stickers for used cars. The app is part of a larger effort to greatly reduce vehicle emissions through stricter standards, investments in alternative fuels and consumer awareness; naturally the app falls into the latter category. New car stickers are governed by the U.S. Environmental Protection Agency (EPA).
Link to the App
RECALLS
9/26/13: “Toyota recalls about 694,000 Sienna minivans for shift lever flaw”
Toyota Motor Corp.’s U.S. unit recalls model year 2007 to 2009 and 2004 to 2005 Sienna minivans manufactured in Indiana for possible damage to the shift lock solenoid installed in the affected vehicles. Most of the recalled vehicles, about 615,000, are in the United States. About 56,000 of the recalled minivans are registered in Canada, 23,000 in Mexico, 300 in Germany and 10 in Guatemala.
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9/25/13: “374,618 Honda Odysseys from 2003-2004 and Acura MDX vehicles from 2003”
American Honda Motor Co. recalls certain model year 2003 and 2004 Odyssey and model year 2003 Acura MDX vehicles for air bags that may deploy inadvertently.
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9/25/13: “134,100 BMW vehicles from 2008-2010, including 528i and M5 models”
BMW of North America, LLC recalls certain model year 2008 through 2010 528i, 535i, 550i, and M5 passenger cars manufactured from 3/1/07 through 12/31/09 for faulty tail lights.
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LITIGATION UPDATES
10/4/13: “Audi CVT settlement approved, covers 64,000 cars”
A VW settlement of a class-action lawsuit involving drivers who bought or leased 2002 through 2006 Audi A4s, Cabriolets, or A6s with factory-installed CVTs in the U.S. received final approval by the U.S. District Court in Los Angeles. The lawsuit, Anna Sadowska, Yanick Godbout, and Tonya DenDekker v. Volkswagen Group of America, Inc., alleged manufacturing and design problems in the vehicles that caused transmission failure and left owners stuck with repair costs. The suit also alleged Audi was aware of the problems and hid them from consumers. Audi denied all allegations, but agreed to reimburse customers for certain repairs and costs. Audi drivers with certain CVT repairs occurring within 10 years or 100,000 miles, whichever occurred first, of the original sale or lease of the vehicle before June 19, 2013, are entitled to a cash reimbursement.
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View the CVT Settlement Website
10/2/13: “Toyota unintended-acceleration lawsuit goes to jury”
Attorneys have finished their closing arguments in the $20 million bellwether lawsuit against Toyota Motor Corp. A jury is set to decide whether Toyota was negligent in not including a brake-override system on decedent Noriko Uno’s 2006 Camry which allegedly accelerated out of control and subsequently collided with a tree. Toyota attorney, Vincent Galvin, Jr., contended the fatal wreck was due to Uno mistaking the gas pedal for the brake pedal. The outcome of the case is expected to set the direction for hundreds of similarly-posed lawsuits against the automaker.
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10/1/13: “Hyundai to defer payments due from US government staff”
Hyundai will offer federal employees who are affected by the government shutdown a payment relief on their Hyundai vehicles “for as long as they are out of work.” Affected government staff looking to buy a new Hyundai will be given a 90-day payment deferral. Hyundai America CEO John Krafcik said, “Like we did almost four years ago when we launched Hyundai Assurance, this is our way of saying, ‘We’ve got your back’ during this uncertain time.”
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10/1/13: “Justice Department Continues to Pursue Auto Parts Price-Fixing Indictments”
Nearly two dozen companies and executives have been charged in a multi-year Justice Department investigation into auto parts price-fixing. Just last week, Panasonic executive Shinichi Kotani was indicted for allegedly conspiring to fix prices for switches and steering sensors sold to Toyota Motor Corp, while G.S. Electech executive Shingo Okuda was found to have engaged in a conspiracy to rig bids and fix prices of speed-sensor wire assemblies installed in antilock brake systems. In total, the cases have accumulated more than $1.6 billion in fines. Private litigation based on similar allegations proceeds in federal court in Detroit against more than a dozen manufacturers.
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9/27/13: AutoTrader Group Inc. v. Visa Inc. et al.
Autotrader Group Inc. filed a lawsuit against Visa, Inc. et al. alleging MasterCard and their member banks fixed prices by restricting competition between the Visa and MasterCard networks and between banks that issue Visa and MasterCard payment cards. Plaintiff further alleges defendants conspired to monopolize the payment card and payment card services markets and to illegally fix, raise, and maintain, through the use of anti-steering restraints and anti-competitive practices, the credit card interchange fees.
9/26/13: “9 Auto Parts Makers Plead Guilty to Fixing Prices”
Nine Japanese automotive suppliers pleaded guilty to conspiring and fixing the prices of auto parts sold in the U.S. and abroad. Hitachi Automotive Systems and Mitsubishi Electric Corp. are among the companies that pleaded guilty and will have to pay $740 million in criminal fines. The investigation, which the Justice Department said was the largest criminal antitrust probe it has launched, involved more than a dozen separate conspiracies, 30 different kinds of parts including seatbelts, radiators, windshield wipers, and air-conditioning systems, and $5 billion in sales to GM, Ford, Chrysler, Honda, Mazda, Mitsubishi, Nissan, Subaru, and Toyota. So far in the investigation, 20 companies and 21 executives have been charged – and all but four of the 21 executives have either been sentenced to prison or entered into plea agreements. All together, the accused have paid more than $1.6 billion in fines.
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9/25/13: “DOT sued over delayed backup-camera mandate”
Two individuals and four organizations, including the Consumers Union, filed a federal lawsuit in New York against the Obama Administration asking a judge to order the U.S. Department of Transportation to set rear visibility standards for light vehicles. The DOT proposed rules in 2010 that would have required backup cameras in all new cars and light trucks, but final rules were delayed after automakers and White House officials voiced concerns over costs. The consumer groups aim to force the administration to make backup cameras a standard feature several years sooner than 2015 – a goal set by Transportation Secretary Ray LaHood before leaving office. According to NHTSA estimates, an average of 292 fatalities and 18,000 injuries occur each year as a result of back-over crashes. Additionally, NHTSA estimated the cost of adding a backup camera would cost between $58 and $203 and save between 95 and 112 lives per year, and up to $18 million per life.
Read the NHTSA Report
Industry news
10/3/13: “DMV reverses Tesla dealership ruling”
Virginia officials say Tesla Motors can apply to operate its own dealership in the state, reversing a previous ruling DMV commissioner Richard Holcomb. Tesla sought an exception to state law saying its unique marketing strategy would not be attractive to a traditional dealer. Tesla dealerships would have no inventory on hand; instead, customers would use touch screens to customize options and to order vehicles.
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10/2/13: “Tesla Model S Catches Fire, Stock Price Sinks”
A Tesla Model S caught fire after a collision with a metallic object. Associated Press reports the fire began in the vehicle’s battery back which is mounted underneath the passenger compartment floor. According to a statement made by Tesla: “the car’s alert system signaled a problem and instructed the driver . . . to exit the vehicle safely and call authorities. All indications are that the fire never entered the interior cabin of the car . . . and was extinguished on-site by the fire department.” Tesla uses lithium-ion batteries which have a reputation for running hot and catching fire – Boeing’s 787 Dreamliner was grounded earlier this year for similar electrical fires traced to the plane’s lithium-ion batteries. Tesla stock dropped $12.05 to $180.95 on Wednesday.
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9/27/13: “Seven models rate tops in IIHS crash ratings”
The IIHS announced seven models which excelled in avoiding or lessening a front end collision by employing a system which automatically slows or halts the vehicle. Those models rating superior include the Cadillac ATS sedan and SRX SUV, Mercedes-Benz C-Class sedan, Subaru Legacy sedan and Outback wagon, Volvo S60 sedan and XC60 SUV.
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9/26/13: “Daimler signs new $12 billion credit facility”
Daimler signed a $12 billion credit facility which will run for five years and has two extension options. However, the carmaker does not intend to use the credit line, and will prematurely end an existing syndicated credit line of nearly 7 billion euros. Finance Chief Bodo Uebber said, “We decided to renew the existing credit line at this early stage primarily due to the favorable market conditions, and have thus gained a sound liquidity cushion for the longer term.”
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9/26/13: “Ford buys small software startup to bolster ‘connected car’ offerings”
Ford Motor Co. acquired Livio, a five-year old Ferndale, Michigan-based software company, for less than $10 million in a bid to improve its in-car connectivity. The deal marks Ford’s first acquisition of a tech company in nearly 13 years. Ford’s Chief Technology Officer, Paul Mascarenas said, “With the acquisition, Livio now has the ability to advocate Ford’s contribution of SmartDevice Link as a standard.” Ford will keep the Livio name and its 11-person firm will operate as a wholly owned Ford subsidiary.
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9/25/13: “BMW and Hyundai in Talks for Mexico Plants, Guajardo Says”
BMW and Hyundai Motor Co. are considering building plants in Mexico. A new BMW or Hyundai factory would further strengthen Mexico’s auto industry which continues to expand yearly. Currently, Nissan, Honda, and Mazda are building plants while Ford and GM are investing in additional production.
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9/23/13: “Chrysler files for IPO”
Chrysler Group submitted a government filing on Monday which could lead to an IPO with JPMorgan listed as the lead adviser. All the shares to be sold would come from a 41.5 percent stake in Chrysler held by a United Auto Workers retirement trust, with the remaining 58.5 percent of the company owned by Fiat. The numbers of shares and price range have not been set. If the SEC approves the registration, it would be the first time since 1998 that all three Detroit automakers are publicly traded.
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