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Automakers already have enough of a headache with the current administration in the white house, but news that broke today is only going to make it even worse. Wilbur Ross, the U.S. Secretary of Commerce has announced that President Donald ordered an investigation under Section 232 of the Trade Expansion Act of 1962 to determine "whether imports of automobiles, including SUVs, vans and light trucks, and automotive parts into the United States threaten to impair the national security." "There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry. The Department of Commerce will conduct a thorough, fair and transparent investigation into whether such imports are weakening our internal economy," said Ross in a statement. There's also this interesting bit in the statement, The Wall Street Journal reported yesterday that tariffs as high as 25 percent could be slapped on new cars. Currently, the tariff on imported vehicles is at 2.5 percent. Imported trucks are already hit with a 25 percent tariff via the chicken tax. There are a couple likely reasons for this investigation, Mid-term elections are coming up and this is seen as a way to court voters in the heartland with the promise of bringing back jobs to the U.S. Possibly being used as leverage in negotiations with Canada and Mexico over the North American Free Trade Agreement (NAFTA); the European Union, and China. This investigation could hurt Mexico the most as they are the largest source of U.S. auto imports - delivering just under $50 billion of imports last year. As for automakers, Bloomberg reports that Jaguar Land Rover, Mazda, and Mitsubishi would be the most affected as all of their vehicles are imported. The news sent the stock prices of foreign automakers downward. Shares in Mazda dropped 5.2 percent at the close of trade in Japan, while Daimler and BMW saw their stock price drop more than two percent. This announcement has gotten condemnation from various governments, trade groups, analysts, and automakers. Here are just a few. "China opposes the abuse of national security clauses, which will seriously damage multilateral trade systems and disrupt normal international trade order," said Gao Feng, spokesman at the Ministry of Commerce in China during a regular press briefing. "We will closely monitor the situation under the U.S. probe and fully evaluate the possible impact and resolutely defend our own legitimate interests." “We have to consider this as something of a provocation. I have the growing impression that the U.S. no longer believes in the competition of ideas, but only the law of power. It fills me with grave concern,” said Eric Schweitzer, president of the Association of German Chambers of Commerce and Industry. “The U.S. auto industry is thriving and growing. To our knowledge, no one is asking for this protection. This path leads inevitably to fewer choices and higher prices for cars and trucks in America,” said John Bozzella, CEO of the Association of Global Automakers, a trade group that represents Hyundai, Nissan, Toyota, and others. Source: Automotive News (Subscription Required), Bloomberg, Reuters, Wall Street Journal (Subscription Required), U.S. Department of Commerce U.S. Department of Commerce Initiates Section 232 Investigation into Auto Imports Today, following a conversation with President Donald J. Trump, U.S. Secretary of Commerce Wilbur Ross initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended. The investigation will determine whether imports of automobiles, including SUVs, vans and light trucks, and automotive parts into the United States threaten to impair the national security as defined in Section 232. Secretary Ross sent a letter to Secretary of Defense James Mattis informing him of the investigation. “There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry,” said Secretary Ross. “The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair the national security.” During the past 20 years, imports of passenger vehicles have grown from 32 percent of cars sold in the United States to 48 percent. From 1990 to 2017, employment in motor vehicle production declined by 22 percent, even though Americans are continuing to purchase automobiles at record levels. Now, American owned vehicle manufacturers in the United States account for only 20 percent of global research and development in the automobile sector, and American auto part manufacturers account for only 7 percent in that industry. Automobile manufacturing has long been a significant source of American technological innovation. This investigation will consider whether the decline of domestic automobile and automotive parts production threatens to weaken the internal economy of the United States, including by potentially reducing research, development, and jobs for skilled workers in connected vehicle systems, autonomous vehicles, fuel cells, electric motors and storage, advanced manufacturing processes, and other cutting-edge technologies. Following today’s announcement, the Department of Commerce will investigate these and other issues to determine whether imports of automobiles and automotive parts threaten to impair the national security. A notice will be published shortly in the Federal Register announcing a hearing date and inviting comment from industry and the public to assist in the investigation. -
Automakers already have enough of a headache with the current administration in the white house, but news that broke today is only going to make it even worse. Wilbur Ross, the U.S. Secretary of Commerce has announced that President Donald ordered an investigation under Section 232 of the Trade Expansion Act of 1962 to determine "whether imports of automobiles, including SUVs, vans and light trucks, and automotive parts into the United States threaten to impair the national security." "There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry. The Department of Commerce will conduct a thorough, fair and transparent investigation into whether such imports are weakening our internal economy," said Ross in a statement. There's also this interesting bit in the statement, The Wall Street Journal reported yesterday that tariffs as high as 25 percent could be slapped on new cars. Currently, the tariff on imported vehicles is at 2.5 percent. Imported trucks are already hit with a 25 percent tariff via the chicken tax. There are a couple likely reasons for this investigation, Mid-term elections are coming up and this is seen as a way to court voters in the heartland with the promise of bringing back jobs to the U.S. Possibly being used as leverage in negotiations with Canada and Mexico over the North American Free Trade Agreement (NAFTA); the European Union, and China. This investigation could hurt Mexico the most as they are the largest source of U.S. auto imports - delivering just under $50 billion of imports last year. As for automakers, Bloomberg reports that Jaguar Land Rover, Mazda, and Mitsubishi would be the most affected as all of their vehicles are imported. The news sent the stock prices of foreign automakers downward. Shares in Mazda dropped 5.2 percent at the close of trade in Japan, while Daimler and BMW saw their stock price drop more than two percent. This announcement has gotten condemnation from various governments, trade groups, analysts, and automakers. Here are just a few. "China opposes the abuse of national security clauses, which will seriously damage multilateral trade systems and disrupt normal international trade order," said Gao Feng, spokesman at the Ministry of Commerce in China during a regular press briefing. "We will closely monitor the situation under the U.S. probe and fully evaluate the possible impact and resolutely defend our own legitimate interests." “We have to consider this as something of a provocation. I have the growing impression that the U.S. no longer believes in the competition of ideas, but only the law of power. It fills me with grave concern,” said Eric Schweitzer, president of the Association of German Chambers of Commerce and Industry. “The U.S. auto industry is thriving and growing. To our knowledge, no one is asking for this protection. This path leads inevitably to fewer choices and higher prices for cars and trucks in America,” said John Bozzella, CEO of the Association of Global Automakers, a trade group that represents Hyundai, Nissan, Toyota, and others. Source: Automotive News (Subscription Required), Bloomberg, Reuters, Wall Street Journal (Subscription Required), U.S. Department of Commerce U.S. Department of Commerce Initiates Section 232 Investigation into Auto Imports Today, following a conversation with President Donald J. Trump, U.S. Secretary of Commerce Wilbur Ross initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended. The investigation will determine whether imports of automobiles, including SUVs, vans and light trucks, and automotive parts into the United States threaten to impair the national security as defined in Section 232. Secretary Ross sent a letter to Secretary of Defense James Mattis informing him of the investigation. “There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry,” said Secretary Ross. “The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair the national security.” During the past 20 years, imports of passenger vehicles have grown from 32 percent of cars sold in the United States to 48 percent. From 1990 to 2017, employment in motor vehicle production declined by 22 percent, even though Americans are continuing to purchase automobiles at record levels. Now, American owned vehicle manufacturers in the United States account for only 20 percent of global research and development in the automobile sector, and American auto part manufacturers account for only 7 percent in that industry. Automobile manufacturing has long been a significant source of American technological innovation. This investigation will consider whether the decline of domestic automobile and automotive parts production threatens to weaken the internal economy of the United States, including by potentially reducing research, development, and jobs for skilled workers in connected vehicle systems, autonomous vehicles, fuel cells, electric motors and storage, advanced manufacturing processes, and other cutting-edge technologies. Following today’s announcement, the Department of Commerce will investigate these and other issues to determine whether imports of automobiles and automotive parts threaten to impair the national security. A notice will be published shortly in the Federal Register announcing a hearing date and inviting comment from industry and the public to assist in the investigation. View full article- 25 replies
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New documents released by congressional investigators last week are putting some doubt onto GM's own internal investigation and legal proceedings. The Wall Street Journal reports that new documents show Doug Parks, vice president of product programs was aware of the ignition switch problems on the Chevrolet Cobalt as early as 2005. At the time, Parks was the chief engineer on the Cobalt and Saturn Ion. On May 2, 2005, he was involved in a email chain with a dealer over a customer wanting the dealer to buy back his vehicle because the ignition switch moves out of the "run" position too easily. Parks responded by suggesting "coming up with a plug" to place on the key to reduce the weight and stop the switch from turning. "This appears to me to be the only real, quick solution," Parks said in the email. “As Ms. Barra has said repeatedly we have taken all of the personnel actions that we feel are appropriate at this time,” GM Spokesman Greg Martin told Bloomberg. These documents could cause big problems for GM's legal battles. The Consumerist explains that lawyers could argue that the lack of a recall, particularly when a former chief engineer and current vice president knew of this issue, could give some credence that the company was trying to cover up this problem. Source: The Wall Street Journal (Subscription Required), Bloomberg, Consumerist William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. View full article
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New documents released by congressional investigators last week are putting some doubt onto GM's own internal investigation and legal proceedings. The Wall Street Journal reports that new documents show Doug Parks, vice president of product programs was aware of the ignition switch problems on the Chevrolet Cobalt as early as 2005. At the time, Parks was the chief engineer on the Cobalt and Saturn Ion. On May 2, 2005, he was involved in a email chain with a dealer over a customer wanting the dealer to buy back his vehicle because the ignition switch moves out of the "run" position too easily. Parks responded by suggesting "coming up with a plug" to place on the key to reduce the weight and stop the switch from turning. "This appears to me to be the only real, quick solution," Parks said in the email. “As Ms. Barra has said repeatedly we have taken all of the personnel actions that we feel are appropriate at this time,” GM Spokesman Greg Martin told Bloomberg. These documents could cause big problems for GM's legal battles. The Consumerist explains that lawyers could argue that the lack of a recall, particularly when a former chief engineer and current vice president knew of this issue, could give some credence that the company was trying to cover up this problem. Source: The Wall Street Journal (Subscription Required), Bloomberg, Consumerist William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. -
General Motors Releases Ignition Switch Recall Report
William Maley posted an article in General Motors
The internal investigation has been completed and General Motors has released the report that looks into the handling of the ignition switch recall. During a town hall meeting this morning at GM's headquarters, CEO Mary Barra said the report was "extremely thorough, brutally tough, and deeply troubling," and announced changes to the company's policies and processes. “Overall the report found that, from start to finish, the Cobalt saga was riddled with failures which led to tragic results for many,” said Barra. The 315 page report, done by former U.S. Attorney Anton Valukas finds that General Motors suffered from “organizational dysfunction” and that there were deceit and missed opportunities for GM to come clean on the ignition switch problem. The report also determined that Barra, General Counsel Michael Millikin, and head of global product development Mark Reuss did not learn of the ignition switch problem and the delay in addressing them until after the decision to issue a recall was made on January 31, 2014. "The structure within GM was one in which no one was held responsible and no one took responsibility," said the report. Barra announced at the meeting that fifteen individuals have been fired after it was determined to have acted inappropriately. More than half of those individuals were in executive roles or higher. Another five individuals have received disciplinary action. Barra also announced a compensation program that will be headed up by attorney Kenneth Feinberg. The program will offer compensation to those who either suffered a serious injury or lost a loved one due to the ignition switch problem. GM has also taken action by instituting a number of changes on how it deals with safety issues. Appointing Jeff Boyer to the new position of Vice President of Global Vehicle Safety Adding 35 product safety investigators Creating the Speak up for Safety program that allows employees to report on potential safety issues Introducing a new Global Product Integrity organization to enhance overall safety and quality performance Restructuring the recall decision making process to raise it to the highest levels of the company "Together, we have to understand that the attitudes and practices that allowed this failure to occur will not be tolerated. Also, if we think that cleaning up this problem and making a few process changes will be enough, we are badly mistaken. Our job is not just to fix the problem. Our job must be to set a new industry standard for safety, quality, and excellence,” said Barra. Source: The Detroit News (2), Motoramic, General Motors, Valukas Report Press Release is on Page 2 GM Receives Extremely ‘Thorough,’ ‘Brutally Tough’ and ‘Deeply Troubling’ Valukas Report 2014-06-05 Company will act on all recommendations 15 GM employees no longer with company Five other GM employees disciplined Report reveals no conspiracy or cover-up Feinberg to administer compensation fund DETROIT – General Motors CEO Mary Barra said today that GM has received the findings of an investigation by former U.S. Attorney Anton Valukas into the Cobalt ignition switch recall and plans to act on all of its recommendations. She again expressed deep sympathy for the victims of accidents related to the ignition switch defect and their families. In addition, Barra announced that Kenneth Feinberg will administer a compensation program for those who have lost loved ones or who have suffered serious physical injuries as the result of an ignition switch failure in recently recalled vehicles. Barra described the Valukas findings as "extremely thorough, brutally tough, and deeply troubling." “Overall the report found that, from start to finish, the Cobalt saga was riddled with failures which led to tragic results for many,” Barra said, noting that the report revealed no conspiracy by the company to cover up the facts and no evidence that any employee made a trade-off between safety and cost. Barra said 15 individuals who were determined to have acted inappropriately are no longer with the company. Disciplinary actions have been taken against five other employees. GM Chairman Tim Solso said the Board of Directors has been working closely with the management team to get the facts on the ignition switch issue and to see that changes are made to prevent such a tragedy from ever happening again. “The Board engaged Anton Valukas to investigate and determine what went wrong while already working with GM’s leadership to make necessary changes,” Solso said. “We have received and reviewed Valukas’ very thorough report and are continuing to work with management to oversee the implementation of the recommendations contained in the report. “In addition, the Board also retained independent counsel to advise us with respect to this situation and governance and risk management issues. We will establish a stand-alone risk committee to assist in overseeing these efforts.” Solso said. “The Board, like management, is committed to changing the company’s culture and processes to ensure that the problems described in the Valukas report never happen again. “The Valukas report confirmed that Mary Barra, Mike Millikin and Mark Reuss did not learn about the ignition switch safety issues and the delay in addressing them until after the decision to issue a recall was made on Jan. 31, 2014,” Solso said. Barra emphasized to employees that the company has adopted and will continue to adopt sweeping changes in the way it handles safety issues. The actions to date include: Appointing Jeff Boyer as Vice President of Global Vehicle Safety, elevating and integrating GM’s safety processes under a single leader Adding 35 product safety investigators that will allow GM to identify and address issues much more quickly Instituting the Speak up for Safety program encouraging employees to report potential safety issues quickly and forcefully Creating a new Global Product Integrity organization to enhance overall safety and quality performance, and Restructuring the recall decision making process to raise it to the highest levels of the company. In her remarks to employees, Barra said she is committed to leading "in a way that brings honor and respect to this company. "Together, we have to understand that the attitudes and practices that allowed this failure to occur will not be tolerated,” she said. “Also, if we think that cleaning up this problem and making a few process changes will be enough, we are badly mistaken. Our job is not just to fix the problem. Our job must be to set a new industry standard for safety, quality, and excellence.” -
The internal investigation has been completed and General Motors has released the report that looks into the handling of the ignition switch recall. During a town hall meeting this morning at GM's headquarters, CEO Mary Barra said the report was "extremely thorough, brutally tough, and deeply troubling," and announced changes to the company's policies and processes. “Overall the report found that, from start to finish, the Cobalt saga was riddled with failures which led to tragic results for many,” said Barra. The 315 page report, done by former U.S. Attorney Anton Valukas finds that General Motors suffered from “organizational dysfunction” and that there were deceit and missed opportunities for GM to come clean on the ignition switch problem. The report also determined that Barra, General Counsel Michael Millikin, and head of global product development Mark Reuss did not learn of the ignition switch problem and the delay in addressing them until after the decision to issue a recall was made on January 31, 2014. "The structure within GM was one in which no one was held responsible and no one took responsibility," said the report. Barra announced at the meeting that fifteen individuals have been fired after it was determined to have acted inappropriately. More than half of those individuals were in executive roles or higher. Another five individuals have received disciplinary action. Barra also announced a compensation program that will be headed up by attorney Kenneth Feinberg. The program will offer compensation to those who either suffered a serious injury or lost a loved one due to the ignition switch problem. GM has also taken action by instituting a number of changes on how it deals with safety issues. Appointing Jeff Boyer to the new position of Vice President of Global Vehicle Safety Adding 35 product safety investigators Creating the Speak up for Safety program that allows employees to report on potential safety issues Introducing a new Global Product Integrity organization to enhance overall safety and quality performance Restructuring the recall decision making process to raise it to the highest levels of the company "Together, we have to understand that the attitudes and practices that allowed this failure to occur will not be tolerated. Also, if we think that cleaning up this problem and making a few process changes will be enough, we are badly mistaken. Our job is not just to fix the problem. Our job must be to set a new industry standard for safety, quality, and excellence,” said Barra. Source: The Detroit News (2), Motoramic, General Motors, Valukas Report Press Release is on Page 2 GM Receives Extremely ‘Thorough,’ ‘Brutally Tough’ and ‘Deeply Troubling’ Valukas Report 2014-06-05 Company will act on all recommendations 15 GM employees no longer with company Five other GM employees disciplined Report reveals no conspiracy or cover-up Feinberg to administer compensation fund DETROIT – General Motors CEO Mary Barra said today that GM has received the findings of an investigation by former U.S. Attorney Anton Valukas into the Cobalt ignition switch recall and plans to act on all of its recommendations. She again expressed deep sympathy for the victims of accidents related to the ignition switch defect and their families. In addition, Barra announced that Kenneth Feinberg will administer a compensation program for those who have lost loved ones or who have suffered serious physical injuries as the result of an ignition switch failure in recently recalled vehicles. Barra described the Valukas findings as "extremely thorough, brutally tough, and deeply troubling." “Overall the report found that, from start to finish, the Cobalt saga was riddled with failures which led to tragic results for many,” Barra said, noting that the report revealed no conspiracy by the company to cover up the facts and no evidence that any employee made a trade-off between safety and cost. Barra said 15 individuals who were determined to have acted inappropriately are no longer with the company. Disciplinary actions have been taken against five other employees. GM Chairman Tim Solso said the Board of Directors has been working closely with the management team to get the facts on the ignition switch issue and to see that changes are made to prevent such a tragedy from ever happening again. “The Board engaged Anton Valukas to investigate and determine what went wrong while already working with GM’s leadership to make necessary changes,” Solso said. “We have received and reviewed Valukas’ very thorough report and are continuing to work with management to oversee the implementation of the recommendations contained in the report. “In addition, the Board also retained independent counsel to advise us with respect to this situation and governance and risk management issues. We will establish a stand-alone risk committee to assist in overseeing these efforts.” Solso said. “The Board, like management, is committed to changing the company’s culture and processes to ensure that the problems described in the Valukas report never happen again. “The Valukas report confirmed that Mary Barra, Mike Millikin and Mark Reuss did not learn about the ignition switch safety issues and the delay in addressing them until after the decision to issue a recall was made on Jan. 31, 2014,” Solso said. Barra emphasized to employees that the company has adopted and will continue to adopt sweeping changes in the way it handles safety issues. The actions to date include: Appointing Jeff Boyer as Vice President of Global Vehicle Safety, elevating and integrating GM’s safety processes under a single leader Adding 35 product safety investigators that will allow GM to identify and address issues much more quickly Instituting the Speak up for Safety program encouraging employees to report potential safety issues quickly and forcefully Creating a new Global Product Integrity organization to enhance overall safety and quality performance, and Restructuring the recall decision making process to raise it to the highest levels of the company. In her remarks to employees, Barra said she is committed to leading "in a way that brings honor and respect to this company. "Together, we have to understand that the attitudes and practices that allowed this failure to occur will not be tolerated,” she said. “Also, if we think that cleaning up this problem and making a few process changes will be enough, we are badly mistaken. Our job is not just to fix the problem. Our job must be to set a new industry standard for safety, quality, and excellence.” View full article
