Government/Legal auto news

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China to overhaul factory safety standards following GM supplier plant explosion

08/06/2014   [Original: Autoblog]
Category: China, Government/Legal, Safety, GM

CHINA-EXPLOSION-DISASTER

Last weekend's explosion at the factory of an automotive component supplier in China has led to a major crackdown in plant safety across the People's Republic, as the country's communist authorities attempt to avoid another catastrophe.

According to Bloomberg, facilities that use aluminum, magnesium, coal, wood, paper, tobacco, cotton and plastic are all subject to the safety campaign instigated by the State Council Work Safety Commission.

At least 75 people were killed and 185 injured in the explosion at Kunshan Zhongrong Metal Products' factory outside of Shanghai, early Saturday morning. It's the latest incident in a trouble-filled year for Chinese industry, which has seen 19 separate safety incidents during the first half of 2014, with over 200 people killed or missing.

This latest issue is being blamed on overcrowded workshops and an inability to remove metal dust, according to Bloomberg, leading Chinese President Xi Jinping to call for harsh punishments for those responsible and prompting the safety crackdown across the PRC.

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Detroit so broke it can't afford the right batteries for parking meters that make it millions

08/06/2014   [Original: Autoblog]
Category: Government/Legal

San Francisco's Parking Ticket Fees To Become Nation's Most Expensive

The city of Detroit is desperate for two things - revenue and savings. It needs to start making more money, and it needs to curb spending. What happens, though, when those two objectives run counter to each other? Well, you get a story like this one, where cost-saving measures are actually costing the city far more in lost revenue.

The city of Detroit has over 3,400 parking meters. If they were all functional, it's estimated they could bring in an additional $6 million per year in revenue. That's money the city could desperately use. Instead, only about half are working, a spokesman for Emergency Manager Kevyn Orr told The Detroit News. The reasons for this are alarmingly easy to fix.

First, as part of the city's austerity measures, it switched to a cheaper, lower-quality battery. According to The News, BatteryJunction.com claims the current batteries being used by the city are nearly three dollars cheaper than the Duracell CopperTop nine-volts the city used before it went bust.

According to an anonymous meter attendant, the Duracells were swapped out every summer and winter. These new batteries, though, are dead well before attendants can get there with replacements. So yes, money is being saved somewhere, but revenue isn't being realized elsewhere.

Even simply changing the batteries requires a fight. The cylinder locks that house the batteries and other internals are prone to seizing when they meet water or dirt. Because maintenance budgets have been trimmed, the locks aren't replaced as often as they should be, which in turn damages the cylinder keys. This in turn exacerbates the battery issue, costing the city more money, due to its attempts at saving funds from maintenance. It really is a vicious cycle.

Of course the solution is rather simple - spend money to make money. For Detroiters, though, how do you do that when there's simply no money left to spend?

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GM financing arm investigated over subprime loans

08/06/2014   [Original: Autoblog]
Category: Car Buying, Government/Legal, GM, Earnings/Financials

General Motors Investigation

General Motors just can't seem to avoid controversy in 2014. Of course, there has been a continual run of recalls throughout the year, and now, its GM Financial division is under investigation for possibly violating the Financial Institutions Reform, Recovery and Enforcement Act, according to Reuters. FIRREA gives the DoJ the power to examine and potentially sue companies that are found to be acting fraudulently. In this case, the feds want to know the division's criteria when securitizing subprime loans.

GM bought the company previously known as AmeriCredit in 2010 for $3.5 billion and renamed it GM Financial. It allowed the automaker to have an in-house division to offer finance and lease options through dealers, since it sold off GMAC, now Ally Financial. According to Reuters, GM Financial has issued $2.15 billion in subprime-auto-loan-backed securities in the first six months of the year.

Subprime auto loans have been on the upswing this year, despite the recent financial crisis. According to a recent study from credit reporting company Equifax looking at data as of April 2014, $46.2 billion in auto loans have been extended to subprime buyers. That's an eight-year high and about 28 percent of the auto loan balance.

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What you missed on 8.5.2014

08/06/2014   [Original: Autoblog]
Category: Government/Legal, Recalls/TSBs, Cadillac

Daily U-Turn

Autoblog readers share unpopular opinions

Last week Autoblog editors went on record with some of our most unpopular opinions about cars and driving. In response our never-shy readership presented an awful lot of interesting and controversial opinions of their own. Here, we choose some of the reader responses we found most compelling (some downright strange) to feature and respond to. Click through to see what's it's like when the inmates run the asylum.

First Drive: 2015 Cadillac ATS Coupe

Cadillac's sport-sedan ATS was hailed as a legitimate contender for the BMW 3 Series throne, so removing two doors and sharpening the styling should only help it's case, right? You've heard the one about the book and it's cover... We get behind the wheel of the new Caddy two-door; finding a lot to love and a little bit to gripe about in the process.

Life sentences for execs that delay recalls?

Senator Claire McCaskill has introduced legislation that would drastically increase NHTSA's budget, remove a maximum limit on fines for automakers and punish executives at car companies if they knowingly delayed recalling cars. When we say punish, we mean punish; McCaskill's proposed law would see penalties as high as life imprisonment for execs, where recall violations resulted in death.

Top Stories

  • Ducati Scrambler to debut September 30
  • 2015 Chevy Colorado to start at $20,100*, GMC Canyon at $20,995**
  • Detroit so broke it can't afford the right batteries for parking meters that make it millions
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Ecclestone headed for $100M settlement in F1 bribery trial

08/05/2014   [Original: Autoblog]
Category: Motorsports, Euro, Government/Legal, Racing

Germany F1 Ecclestone Trial

Formula One bigwig Bernie Ecclestone has opened his wallet to finally put an end to his trial for alleged bribery in Germany. According to Britain's The Telegraph citing the Süddeutsche Zeitung, the controversial racing magnate offered a 60 million pound- ($100 million-) settlement to put the case behind him. Deutsche Welle is reporting that state prosecutors have accepted the deal. Ecclestone had initially proposed $25 million to take care of things and later increased the price further.

It already appeared quite likely that the settlement would be accepted. The German court hearing the case told scheduled witnesses that they didn't need to be there for Tuesday's proceedings. According to Deutsche Welle, Ecclestone's old age was a contributing factor the prosecutors' agreement to the offer.

Ecclestone was accused of paying German banker Gerhard Gribkowsky about $44 million in bribes in 2006 for preferential treatment in buying F1 shares. However, the case was always somewhat complicated. Ecclestone claimed that he paid the banker the money, but it was because he was being blackmailed. If convicted, he could have faced up to 10 years in prison. Gribkowsky received eight-and-a-half years behind bars for his role in the affair. Ecclestone previously stepped down from his position on the F1 board because of the trial in Germany. Although, this settlement could clear him to resume that role.

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Senator pushes for up to life sentence for auto execs found to delay recalls

08/05/2014   [Original: Autoblog]
Category: Government/Legal, Safety

GOP Groups Campaign Money

Democratic Senator Claire McCaskill (shown above) has had it with automotive execs stalling when it comes to recalls. The Missiourian has proposed a new bill, the Motor Vehicle and Highway Safety Enhancement Act, which aims to improve the automotive safety following the high-profile fiascos involving General Motors and Toyota.

Aside from a doubling of the budget for the National Highway Traffic Safety Administration over the next six years and the removal of the $35-million limit for fining automakers, the plan includes a provision that would punish auto executives if it's discovered they knowingly delayed recalls. How will it punish them, you ask? Oh, you know, just life in prison.

The bill "gives federal prosecutors greater discretion to bring criminal prosecutions for auto safety violations and increases the possible penalties, including up to life in prison for violations that result in death," McCaskill's office told The Detroit News. If a delayed recall led to serious injuries, meanwhile, execs could still face a 15-year stint behind bars.

As for that change in the fine structure for automakers, the removal of the limit is complemented by a hefty increase in the per-vehicle fine, from $5,000 to $25,000. With this change, GM could have been on the hook for $55 billion (with a "b") in fines for its bumbling of the ignition switch recall, rather than just $35 million. The News says, though, that NHTSA has "wide discretion" in handing out the fines. Considering a $55-billion fine is enough to sink any automaker, it is unlikely that such a monumental sum would be handed out. Still, the potential threat of such a death sentence should be enough for any automaker to sit up and take notice.

"With millions of Americans behind the wheel every day, and more than 33,000 killed on our roads each year, we've got to do more to keep our cars and the roads we drive them on safe," McCaskill said, according to The News. "Painful recent examples at Toyota and GM have shown us we also must make it easier to hold accountable those who jeopardize consumers' safety. For too long, auto safety resources have remained virtually stagnant while cars and the safety challenges they present have become more complex."

What do you think? Do you agree with McCaskill's proposed bill? Should the punishments for automakers and execs be more or less harsh? Have your say in Comments.

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Jalopnik scribe finds out the hard way why you should never speed in Virginia

08/05/2014   [Original: Autoblog]
Category: Government/Legal, Read This

A Fairfax, Virginia, motorcycle Officer

Being an automotive journalist can be a dangerous gig. No, we're not talking about the risk of carpal tunnel from typing for eight to ten hours a day, five to six days a week or the long periods of sitting. Instead, we're referring to what may be more obvious: the cars. For all of our talk and bravado when it comes to the high-performance vehicles we drive, testing a powerful vehicle on public roads requires a high degree of responsibility and judgment. Every journalist has found themselves lacking in these two key qualities at some point in their road-testing career (and those that claim they haven't are full of it). For the vast majority of us, it's a matter of when, not if, we'll run into trouble with the police.

That's just what happened to Jalopnik writer Patrick George. He was on a media program involving the Chevrolet Camaro ZL1 when he got nipped by the fuzz. But because he was driving in Virginia at the time, his offense - 93 miles per hour in a 55-mph zone - came with a lot more than a big fine, lots of points and a thorough dressing down from an officer. It came with jail time.

The situation, as Patrick rightly says, is one many of us have experienced. That's what makes his entire first-hand account of the events leading up to his speeding violation, as well as his three-day stint in the slammer, so disturbing. It just hits too close to home, whether you're road-testing a new Camaro like Patrick was or if you're simply headed home in your own vehicle. It's an excellent, sobering read and a highlight of the state of Virginia's borderline draconian driving laws as they relate to speeding.

Head over and take a look.

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GM extends sympathy to Chinese explosion victims as death toll climbs to 75

08/05/2014   [Original: Autoblog]
Category: China, Government/Legal, Safety, GM

65 Dead & Over 100 Injured In Kunshan Factory Blast

General Motors China has extended its "deepest sympathy" to families of the 75 killed and 185 injured in Saturday's explosion at the Kunshan Zhongrong Metal Products' factory, near Shanghai. Kunshan Zhongrong polishes aluminum wheels for GM vehicles, is a component supplier of Dicastal, a major aluminum parts manufacturer, according to Just Auto.

"For the families of the victims and those injured in this terrible tragedy, we extend our deepest sympathy to them," a GM China spokesman told Just Auto.

The death toll at the plant has risen from 71 killed to 75, while the number of people injured has fallen from 186 to 185. Initial reports claimed that 68 people were killed and 187 injured in the blast, which occurred at 7:37 AM local time on Saturday (Friday evening on America's East Coast). The plant employs some 450 employees.

Meanwhile, the Chinese government has sworn that those responsible will face severe punishment, with President Xi Jinping dispatching one of China's five state councilors to the facility, Automotive News reports. Five of the company's executives are currently in custody.

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It's been 5 years since Cash For Clunkers, was it a success? [w/poll]

08/04/2014   [Original: Autoblog]
Category: Car Buying, Government/Legal, Earnings/Financials

Cash For Clunkers Program Yielded Nearly 700,000 Sales

CARS set out to kill two birds with one stone: jumpstart slow automobile sales and get a large number of older cars off the road.

A lot has happened since 2009. President Obama was re-elected. The Arab Spring saw popular uprisings overthrow dictators across the Middle East and North Africa. General Motors declared and subsequently emerged from bankruptcy. Fiat bought Chrysler. And the Cash for Clunkers program came and went.

That's right, it's been five years since the federal government launched the Car Allowance Rebate System - known as CARS for short, or more popularly as Cash for Clunkers. The program set out to kill two birds with one proverbial stone: jumpstart slow automobile sales across the country on the one hand, and get a large number of older (and less environmentally friendly) cars off the road. Identifying both problems and a single way to solve them, the government offered financial incentives (cash) for drivers to trade-in their old cars (clunkers) in favor of new ones, following the lead set by similar scrappage programs that had taken place in other countries around the world.

Even with a moribund economy, buyers jumped at the opportunity, and in less than a month, the entire $1 billion allotted by Congress to the program had been used up. So legislators approved an additional $2 billion, which ran out before the end of August 2009 - two months ahead of schedule.

The question that lingers five years later is whether the program was actually a success. Proponents point to the rapid rate at which customers took advantage of the program as a sign of its success, providing a boost in sales to automakers and dealers across the country. The Department of Transportation also reported that the new vehicles acquired averaged over 60-percent better fuel economy than the ones that were traded in, all the while giving a shot of adrenaline to Detroit's automakers.

Critics, however, debate the veracity of those claims and paint a different picture. The program's detractors claim that the increased sales promoted by the program were not created out of nowhere, they merely pulled ahead future sales that would've taken place anyhow, resulting in a zero net gain at the cost of $3 billion to the taxpayer. Implementing the program also required the National Highway Traffic Safety Administration to take on thousands of additional employees to process the applications for reimbursement and necessitated the government setting up the National Motor Vehicle Title Information System just to keep track of it all.

Meanwhile, detractors point out, it was not American automakers but Japanese ones like Toyota, Honda and Nissan that brought in the lion's share of new car sales from the program (while American cars were ineligible under Japan's own scrappage program). The initiative is also said to have had the unfortunate side-effect of raising prices on used cars (which only made things harder on those who couldn't afford new ones during difficult financial times), and reduced the number of old cars being donated to charities that depended on them.

As for the improvement in fuel economy, critics claim that drivers are likely to drive their newly fuel-efficient cars more (canceling out any environmental benefit of their improved economy), also arguing that the environmental impact of manufacturing and shipping the new cars bought hadn't been taken into account. Further, they note that many large SUVs and crossovers qualified for the program even though they didn't meet the 20-mpg threshold for eligibility.

Whether the program, now five years in hindsight, could ultimately be viewed as a success or not, one thing's for sure: it was certainly expensive.

View Poll

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NHTSA proposes new bus rollover standards

08/04/2014   [Original: Autoblog]
Category: Government/Legal, Safety

Bus Rollover

New rules could be coming for America's coaches and large buses, as the National Highway Traffic Safety Administration has proposed standards that have been influenced by those of the European Union.

The new standards would demand that large buses undergo tests that would see the vehicles tipped off of a platform and onto a hard surface, with a particular focus on the way an impact affected its structure. According to NHTSA, the new standards would also force manufacturers to batten down the emergency doors so they'd stay shut during a rollover, and reinforce the attachments for the seats and overhead storage racks, again, so they'd stay in place.

To be fair, these all sound like fairly reasonable changes in the name of safety. They are, however, not going to be terribly cheap. NHTSA is expecting costs to manufacturers to rise between $5 and $13 million each year, with each new bus requiring an extra $282 to $507 for the changes. Other tradeoffs, including some weight gains and fuel efficiency penalties, also seem worth the benefit of two lives saved per year and four serious injuries prevented.

The blow should be softened for current coach operators, though, as only newly built buses will need to conform to the rollover standard at present. That could change, although according to The Detroit News, NHTSA said it "believes that major structural changes to the vehicle's entire sidewall and roof structure would be needed for some existing buses to meet the rollover structural integrity requirements." It scarcely needs mentioning, but NHTSA thinks that's an overly expensive proposition.

Still, NHTSA is looking at the "feasibility, benefits, and costs of any potential requirement to retrofit existing buses with stronger emergency exit mechanisms and enhanced structural integrity to increase side window glazing retention to afford a similar level of anti-ejection protection for passengers riding in existing buses." Future regulations may include the requirement of stability control.

Municipalities, meanwhile, need not fret, as school buses and public transit buses won't be required to make the changes. Nor are airport shuttle or prison buses included, as these regulations are meant for the kinds of buses that schlep people from city to city on regular routes and tourists to popular destinations.

Continue reading NHTSA proposes new bus rollover standards

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