Tag: Volkswagen Group

Business Community Pivots from Trump

By Todd Lassa

General Motors CEO Mary Barra (pictured) has announced that by the end 2025 there will be some 20 electric vehicles available to customers in the U.S. — 40 percent of all products on offer in its showrooms — which will go a long way toward the automaker meeting strict 2026 California fuel economy standards. But Barra waited until Michigan certified its 16 Electoral College votes would go to President-elect Joe Biden, to announce the automaker would separate from President Trump’s three-year plus legal proceedings to end the state’s special waiver allowing its own emissions laws.  

The California standard eases the Obama administration’s federal 54.5-mpg average by 2025, to about 51-mpg by 2026, while the Trump administration has sought a 40-mpg standard instead. GM, Toyota Motor and Fiat Chrysler signed on with the administration. Toyota, which built a reputation for low emissions and high fuel efficiency with its Prius hybrids, had said it joined Trump’s legal efforts because it prefers a single federal standard, no matter what the level.

Historically, until now, the standard set by the California Air Resources Board (CARB) has been tougher than the federal standard. California has had a waiver from the federal government to set its own rules since the late 1960s, and 16 high-population Eastern states long ago signed on. It must be noted that the corporate average fuel efficiency (CAFE) standards, whether 40 mpg or 54.5 mpg, do not literally mean automakers must meet those numbers – there are very complicated formulas for determining each car or truck models’ average. 

But with its fleet of zero-emission EVs on the way over the next few years, GM could reasonably have joined Ford Motor Company, BMW, Volvo, Volkswagen Group (which has aggressive plans for a fleet of its own EV models) and Honda (which is partnering with GM on EV projects) when they signed on with California on its 51-mpg average. 

Legal efforts to lower the future standard undoubtedly will end with Biden’s inauguration Jan. 20, when the president-elect will add a special envoy for climate to his cabinet. Biden has chosen John Kerry, Obama’s second secretary of state, who helped negotiate the Paris Agreement on climate change (another accomplishment that Trump reversed), for the post. 

Trump often attacked Biden as beholden to the Democratic Party’s progressive wing and a commitment to Rep. Alexandria Ocasio-Cortez’s “Green New Deal.” In the second presidential debate, held in late October, Trump predicted that Biden would lose Pennsylvania’s electoral votes for his commitment to turn the United States into a net-zero producer of climate-warming pollutants by 2035, and to cut total emissions to zero by 2050. For the time being, at least, Biden appears to be carving out a middle road between climate change activists and the fossil fuel industry.

Barra’s announcement Monday coincided with the administrator of the General Services Administration, Emily W. Murphy, acknowledging nearly two weeks after the fact that former Vice President Biden had won the election, which in turn allowed the transition process to commence. It also coincided with the efforts of  “160 top American executives” who signed a letter to the Trump asking him to acknowledge Biden’s victory and begin an orderly transition, The New York Times reported Nov. 24. Some of the signatories also threatened to withhold campaign contributions to Sens. Kelly Loefler and David Purdue, two incumbent Republicans seeking re-election in a January runoff in Georgia. If they both lose, the Democrats will gain majority control of the Senate. 

It seems fairly clear that the business world has moved on from Trump and his policies.

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PHOTO CREDIT: General Motors

GM Moves on to the Next Administation

By Bryan Williams

The news of General Motors retreating from the Trump Administration’s fight with the California Air Resources Board and joining Ford, BMW, VW, and Honda isn’t a surprise. President Trump was peculiarly involved in the auto industry. 

He berated the domestic brands for outsourcing assembly to other countries, especially Mexico. He also fought my home state of California over its stricter-than-federal fuel economy standards. Taking a hardline pro-business stance on the auto industry was supposed to win Trump votes in Michigan in 2020. We know how that turned out.

GM bailing out of Trump’s legal efforts against the California Air Resources Board (CARB), to me is just a business decision to curry favor with the next administration. That Detroit automakers have been based in otherwise deep-blue Michigan, complicit in union inefficiencies for decades, and receptive to government bailouts – three realities that follow the Yellow Brick Road to a preference for the Democratic Party -- is a story for another day.

But what about two sets of fuel economy standards? When President Obama abruptly dictated an astronomical increase in fuel efficiency, I thought there was no way the automakers could meet them by 2025. How do politicians expect a business with such long development time, such as the auto industry, to turn on a dime when platforms and engines are designed for seven- to 10-year product cycles? 

There should be one national standard, and it could be the California standard as long as the automakers are given enough time to implement them, without throwing mandates or lawsuits around in an attempt to appease the political base.

The auto industry will be able to meet the California fuel economy standard, which at 51 mpg by 2026 still reflects a bit of a break from the Obama administration’s 54.5 mpg by 2025. But let’s choose one national mandate and stick with it for a while. It would provide the regulatory stability businesses need.

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