Bill would block state laws on self-driving cars

Keith Laing, Detroit News Washington Bureau
3:39 p.m. ET June 16, 2017

Washington – States would prevented from passing their own laws on the testing or design of self-driving cars under a proposed bill being drafted in the U.S. House of Representatives.

The measure, which would represent a big win for carmakers, is a stark departure from the Obama administration’s recommendation that called for automakers and technology companies to voluntarily report information about their self-driving testing to the National Highway Traffic Safety Administration before the cars are used by the public.

Under the Obama administration’s proposed rules, which were nonbinding, automakers and technology companies would have had to meet a set of 15 guidelines before they could place self-driving cars on public roads. Automakers complained that reporting on their self-driving test could delve in proprietary information that would normally be shielded from their competitors view.

The new proposal from Republican leaders on the House Energy and Commerce Committee’s Digital Commerce and Consumer Protection subcommittee would require information related to highly automated vehicles to be treated as “confidential business information,” according to a draft of the legislation obtained by The Detroit News.

The proposed legislation prohibits states and other local jurisdictions from adopting regulations related to cars’ design, construction, software or communication. States still would be allowed to regulate registration, licensing, liability, education and training, insurance or traffic laws.

The bill would also allow the U.S. Secretary of Transportation to designate up to 100,000 cars that would be exempt from the existing Federal Motor Vehicle Safety Standard, which did not contemplate the development of self-driving cars; the current limit is 2,500 cars. The measure would also increase the number of years that a manufacturer can maintain an exemption from federal motor vehicle standards from two years to five years.

U.S. Rep. Debbie Dingell, D-Dearborn, said lawmakers in both parties are working closely together to make sure the self-driving bill is bipartisan.

“We haven’t been going for the headlines, but we’ve trying to bring everybody together to make sure that we remain at the forefront of innovation,” Dingell, who is a member of the panel, said in an interview with The Detroit News. “We can’t let India and China get ahead of us on this.”

Lawmakers in the U.S. Senate also are working on a bipartisan bill to regulate self-driving cars. U.S. Sens. John Thune, R-S.D., Gary Peters, D-Bloomfield Township, and Bill Nelson, D-Fla., all members of the Senate Commerce, Science and Transportation Committee, released on Tuesday a set of “bipartisan principles” that call for prioritizing safety, promoting innovation, reinforcing separate federal and state roles, strengthening cybersecurity and educating the public on self-driving cars. The lawmakers said they have not agreed to specific legislation language.

Self-driving car advocates have been pushing federal regulators to adopt a national set of rules for autonomous driving testing because states like Michigan and California are beginning to craft their own regulations.

A bill that would allow self-driving cars to be operated on any of the Michigan’s 122,000 miles of roads and eliminate the need for a driver to be behind the wheel was passed into law last year.

California initially took the opposite tack by requiring a licensed driver — and a steering wheel — to be in the car at all times. But the state later relented with a proposal to allow car companies to request permits for robotic car testing. Automakers grumbled the steering wheel requirement would limit testing in California.

Gloria Bergquist, vice president of communications and public affairs for the Alliance of Automobile Manufacturers, an advocacy group representing 12 of the world’s largest car manufacturers, praised lawmakers for increasing the number of cars that can be exempted from federal requirements. “We support increasing the number of vehicles that can be tested, and we look forward to working with the committee to move legislation forward,” she said in a email.

John Simpson, privacy project director at the Santa Monica, California-based Consumer Watchdog group, complained that the House’s proposed self-driving legislation is “all about pre-emption of state regulations (and) expanding exemptions.

“There is no serious thought given to any kind of creation of meaningful, enforceable federal motor vehicle safety standards,” he said. “That is what we need right now.”

Rebecca Lindland, executive analyst for Kelley Blue Book, said the proposed legislative language is big a win for carmakers who have been seeking wide latitude to test self-driving cars and have pushed regulators to adopt national standards.

“In a victory for autonomous vehicle developers, a new Republican plan seeks to clarify where state and federal jurisdiction begins and ends regarding self-driving cars…,” Lindland said.

“The federal government will regulate specific aspects of development and systems, while state or political subdivisions can regulate registration, licensing, and other local concerns,” she continued. “This prevents a patchwork of standards while still providing geographical customization.”

Lindland added the proposal to expand the number of vehicles that are exempt from current safety standards and increase the length of the exemption term “further facilitates real world testing of the technology,” which she said is “key to socializing self-driving vehicles.”

Karl Brauer, executive publisher for Autotrader and Kelley Blue Book, agreed.

“There are three major components of making self-driving cars a reality: technology, hardware and regulations,” Brauer said. “The technology and hardware are rapidly evolving at various companies, but neither will matter if the regulatory element takes forever to get resolved.”

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U.S. pressed to regulate self-driving cars

Keith Laing, Detroit News Washington Bureau
4:12 p.m. ET June 14, 2017

Washington — The federal government will have to find ways to regulate self-driving cars that don’t stifle innovation among auto manufacturers and technology companies, lawmakers and industry groups agreed during a hearing that took place hours after a shooting rocked Capitol Hill on Wednesday.

Proceeding with business as usual after a brief acknowledgment of the shooting of House Majority Whip Steve Scalise, R-La., during practice for an annual Congressional baseball game, members of the U.S. Senate Commerce, Science and Transportation Committee described the delicate tightrope walk that regulators face with self-driving autos.

“Current federal motor vehicle safety standards do not address automated technologies, and in some cases directly conflict with them,” said Sen. John Thune, R-S.D., who is chairman of the panel. “We are looking for ways to address these conflicts in dated rules without weakening the important vehicle safety protections they provide.”

Thune quickly added: “We also must be careful to avoid picking winners and losers in this space… It is important for Congress not to favor one path before the market figures out what really works best.”

Thune, along with Michigan U.S. Sen. Gary Peters, D-Bloomfield Township, and Bill Nelson, D-Fla., all members of the Senate Commerce Committee, released on Tuesday “bipartisan principles” to guide legislation on self-driving cars.

Thune, who said he rode in an Audi A7 that had self-driving features last week, said the advent of autonomous cars will require drastic changes for both automakers and regulators.

“Government needs to challenge itself to overcome the traditional 20th-century conception – and regulation – of a car and a human driver,” he said. “AVs (autonomous vehicles) will – over time – bring changes to jobs, insurance, law enforcement, infrastructure and many other things we cannot yet foresee. Similar to when the car was first invented, these challenges are not insurmountable.”

Democrats on the panel agreed, talking up the potential safety and economic benefits of self-driving cars.

“This technology is without question one of the most transformative technologies to come out of the auto industry probably since the first car came off of the assembly line,” Peters said. “Certainly we know what happened when that first automobile came off of the assembly line, it literally transformed America. It created the American middle class.”

Peters touted Michigan’s role in the development of self-driving cars, arguing that the state is “leading the way” in innovation in the arena of autonomous vehicles.

Auto industry groups pushed lawmakers to act fast in creating regulations for self-driving cars, arguing that they are closer to appearing on U.S. roads than many people think.

“The key question this committee must ask is how to use public policy to optimize the safe deployment of these vehicles and their promise of social good, while continuing to let innovation spur economic growth,” said Mitch Bainwol, president of the Alliance of Automobile Manufacturers, which lobbies for automakers in Washington.

Bainwol said driver-assist systems that have become popular in recent years like adaptive cruise control and active lane keep have “accelerated significantly” the move toward autonomy in the automotive sector.

“The more consumers experience driver-assist systems, the more they are favorable toward full automation,” Bainwol said.

Colleen Sheehey-Church, national president of Mothers Against Drunk Driving, said self-driving cars hold the promise to reduce the number of car crashes that involve inebriated drivers, noting that her 18-year-old son was killed in a 2004 crash that involved a driver who was under the influence of alcohol and drugs.

“Technology will ultimately be the way we eliminate drunk driving,” she said. “Autonomous vehicles are vital in helping us achieve our goal.”

Other safety groups complained that they did not have a seat at the table in Wednesday’s hearing, however, noting that MADD’s agenda is narrowly focused on eliminating drunk driving.

“A spokesman for MADD has the laudable, but narrow, agenda of combating drunk driving,” Santa Monica, Calif.-based Consumer Watchdog wrote in a letter to leaders of the Senate panel. “This is an industry-dominated panel with no representatives of auto safety or consumer protection organizations.”

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Senators crafting ‘bipartisan principles’ for robo-cars

Keith Laing, Detroit News Washington Bureau
5:38 p.m. ET June 13, 2017

Washington — The day before a Senate panel is to discuss federal regulations for self-driving cars, three senators released “principles” to guide that legislation.

U.S. Sens. John Thune, R-S.D.; Gary Peters, D-Bloomfield Township; and Bill Nelson, D-Fla., all members of the Senate Commerce, Science and Transportation Committee, on Tuesday released “bipartisan principles” to guide legislation on self-driving cars. The panel will hold a hearing Wednesday about the “hurdles for testing and deployment” of robotic cars.

The lawmakers said the guidelines would ensure the safety of the cars and reduce regulatory conflicts about autonomous vehicles that most major carmakers are testing.

The senators said the principles call for prioritizing safety, promoting innovation, reinforcing separate federal and state roles, strengthening cybersecurity and educating the public.

“Working on a bipartisan basis, we continue to make progress in writing what we expect will become the first-ever changes in federal law helping usher in this new transportation era,” panel chairman Thune said in a statement.

Peters said the principles are an important step in ensuring the U.S. “remains the world leader in transportation innovation.”

Prior to Tuesday, the federal government’s effort to craft new guidelines for self-driving cars appeared to be stuck in neutral at a time when automakers are actively testing them in Michigan and other states.

The National Highway Traffic Safety Administration had begun working on a set of nonbinding guidelines at the end of the Obama administration, but the agency has been silent about self-driving cars and most other regulations involving automakers since President Donald Trump took office in January.

Carmakers have said they cannot put self-driving cars into production until federal regulators sort out issues involving accident liability and split-second decision-making in life-or-death situations.

Ford Motor Co. Executive Chairman Bill Ford told a Washington, D.C., audience recently that “no one manufacturer is going to be able to program in one ethical equation that is different than the others,” so the federal government will likely have to step in.

As an example, he posed the question on whether a car should decide in an emergency situation to save the life of the driver or save 10 pedestrians: “Those all have to be thought through and no one manufacturer is going to be able to program in one ethical equation that is different than the others. I mean, that would be chaos. And imagine the fun the trial lawyers would have with that, too.”

Ford has said it plans to build fully autonomous cars — without a steering wheel or brake or accelerator pedals — for use in ride-hailing or ride-sharing services by 2021. Other automakers have also called for federal guidance as they ramp up self-driving car testing too.

General Motors Co. will work with regulators to update the guidelines proposed by the Obama administration, GM Chairman and CEO Mary Barra told reporters Tuesday at an event at its Orion Assembly Plant where the company said 130 self-driving Chevrolet Bolt EVs had been completed for testing.

“I think as we continue, as this technology is moving at such a rapid pace, as we continue to develop, we’re going to work in partnership with our regulators to make sure we have the right standards because it’s so important for this technology to be rolled out safely,” she said.

Brad Stertz, Audi’s director of government affairs, said his company hopes to get certainty about what’s going to be required for autonomous vehicles as it ramps up testing of a prototype Audi A7 that’s capable of driving autonomously at highway speeds up to 70 mph.

Audi says its self-driving prototype is capable of initiating lane changes and passing, braking automatically and adapting its speed based on posted limits and surrounding vehicles. Stertz said the company is leery about allowing the car to go faster than posted speed limits without federal guidance on how fast is acceptable to keep up with traffic.

“Our position is the car will be programmed to follow the law,” he said. “It may be the slowest car on the interstate, but if you want to go faster, you will just have to drive yourself.”

The Obama administration’s proposed rules focused on 15 guidelines that called for automakers and technology companies to voluntarily report on testing and safety to federal regulators before autonomous cars are sold to the public. Before self-driving cars are allowed to roll on U.S. roads, automakers would have been required to report how they were tested, how the systems work and what happens if those systems fail.

The U.S. Department of Transportation did not respond to a request for comment on the status of the proposed rules. U.S. Transportation Secretary Elaine Chao said recently the Trump administration was planning to update the rules soon.

Safety advocates have said the Trump administration is moving too slowly.

“The Trump administration’s delay on autonomous vehicle policy is outrageous and could ultimately put drivers at risk,” said John Simpson, privacy project director at the Santa Monica, California-based Consumer Watchdog group. “Developers of automated vehicles are rushing to test them and are now turning to states like Arizona were there are new rules in place.”

He noted that no automakers have filed out the proposed 15-point assessment in the original proposal. Although he considers those rules inadequate, “it at least would have indicated that developers had considered critical issues raised by robot cars and would have explained how they intended to deal with those issues.”

The Alliance of Automobile Manufacturers, which lobbies for U.S. automakers in Washington, said its members expected the Trump administration to tinker with those proposed rules.

Gloria Bergquist, vice president of public affairs at the alliance, said, “We expect this living document will be modified and improved with appropriate industry collaboration as technology advances.” She said the alliance supports federal leadership to avoid a network of differing state and local laws.

Staff writer Melissa Burden contributed to this report.

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Public assets could be sold under Trump road plan

Keith Laing, Detroit News Washington Bureau
12:02 a.m. ET June 8, 2017

Washington — President Donald Trump said Wednesday that his administration’s efforts to create a more business-friendly regulatory environment in the U.S. will encourage private companies to invest in construction of public assets such as airports, bridges and highways.

Trump is calling for federal spending of $200 billion over 10 years that administration officials say can be used to “incentivize” up to $800 billion in private, state and local spending on infrastructure. At the plan’s core is the assumption that private companies would enter into “public-private” partnerships with local and state governments.

The president said during a speech on Wednesday in Cincinnati that businesses “are ready to invest in creating jobs, but we’ve been waiting for a responsible partner in the federal government,” although he did not identify specific projects that will receive private money.

“We will work directly with state and local governments to give them the freedom and flexibility they need to revitalize our nation’s infrastructure,” Trump said. “Working with states, local governments and private industry, we will ensure that these new federal funds are matched by significant additional dollars for maximum efficiency and accountability.”

Critics say Trump’s privatization of public assets could lead to increased use of tolls and other mechanisms that will allow private companies to generate profits in exchange for financing projects. They cite examples of companies that have entered into agreements with state and local governments and later gone bankrupt or charged higher than expected tolls for the use of roads and bridges.

And it could lead to increased use of tolls and other mechanisms that will allow private companies to generate profits in exchange for financing projects.

U.S. Rep. Brenda Lawrence, D-Southfield, is skeptical of such privatization plans.

“There is a difference between government and private industry,” she said in an interview with The Detroit News. “One exists to make a profit and one exists to ensure the quality of life for its citizens. We had a glaring example of looking at just profit when we looked at Flint.”

Trump advisers have said private companies may be able to operate infrastructure more efficiency than federal, state and local governments can. They said that to entice state and local governments to sell some of their assets, the administration is considering paying them a bonus. Proceeds of the sales would then go to other infrastructure projects.

Infrastructure was expected to be one area where Trump could work with Democrats in Congress to achieve a bipartisan legislative victory, but the idea of privatizing public assets is anathema to many members of the minority party.

“We’ve invested millions of dollars in our infrastructure. Are we just going to give it away?” Lawrence asked, adding that private investment could come at a steep price. “If a private company comes in and says ‘We’re going to invest in your port,’ they’re going to want a return on their investment. That’s the business way.”

The traditional source for U.S. transportation funding has been revenue collected by the federal gas tax, which is currently 18.4 cents per gallon. The federal government usually spends about $50 billion per year on roads, but the gas tax only brings in $34 billion. The gas tax has not been raised since 1993, and there is little appetite in Washington for taking a vote to do so now. Congress has turned to other areas of the federal budget in recent years to close the infrastructure funding gap, most recently transferring $70 billion to help cover five years worth of transportation spending that will run out in 2020.

Critics say the Trump administration’s plan relies too heavily on the idea that private companies will be willing to finance the nation’s construction projects.

“The idea that the private sector is going to provide a charitable donation to states to build roads is not how it works,” said Beth Osborne, senior policy adviser at the Washington, D.C.-based nonprofit organization Smart Growth America, which advocates for “responsible transportation and community development practices” in U.S. cities. “Policymakers are trying to find easy solutions for problems were there are none.”

Partnership debate

In southeast Michigan, Detroit’s half of the Detroit-Windsor Tunnel was sold in 2013 to Syncora Guarantee, a Bermuda-based insurance company, during the city’s bankruptcy. Windsor still owns its half of the tunnel, which forced Detroit officials to include their Canadian counterparts in negotiations over the sale. More recently, the new QLine streetcar was built in part with federal money, but it is owned and operated by a nonprofit organization known as M-1 Rail that is separate from the city. Then there is the contentious private ownership of Ambassador Bridge over the Detroit River that has prompted plans for a publicly owned span between Detroit and Windsor.

The success in other states of most so-called “public-private partnerships,” or P3s, is up for debate.

In 2006, Indiana signed a 75-year lease of the Indiana Toll Road to a Spanish-Australian consortium for $3.8 billion. Eight years later, the private company filed for bankruptcy. Supporters have said it was better for taxpayers that a private company absorbed the losses that led to the bankruptcy, while others questioned whether lower-than-estimated usage of the toll road showed the investment that sparked the deal was unsound to begin with.

“In Indiana, they called it successful that the P3 went bankrupt because it didn’t fall on the state,” Osborne said. “But maybe it was not a wise investment to begin with.”

Robert Puentes, president and CEO of the independent Washington-based Eno Center for Transportation think tank, said Indiana ended up being very well protected. “They got the improvements to the road,” he said. “They got that up front and they got the road back when the company went bankrupt and they can bid that thing back out.”

The toll road was then purchased by an Australian company. Tolls went up this year after a state subsidy that was paid by the Indiana government to prevent toll hikes ended.

Virginia has been touted as model of the potential for public-private partnership since its successful launch of high-occupancy toll lanes on Interstates 95 and 495 in the Washington, D.C., suburbs in northern Virginia, which cost $925 million and $2 billion to build respectively. Drivers there have complained about high “on-demand” rush-hour toll rates are set by another private op private operator based on traffic conditions. Tolls at peak times have occasionally reached as high as $20.

Private partnership ‘supplemental’

Ed Mortimer, executive director of Transportation Infrastructure at the U.S. Chamber of Commerce, said public-private partnerships are likely to always to part of the transportation funding solution, but he said only a small number of projects in densely populated areas can work as public-private partnerships. “There are only about 10 percent of transportation projects that would be even be amenable to P3s,” he said.

Mortimer said the Trump administration has looked into the possibility of selling the value of current assets to private firms to allow them to capture any return on investment through a process called “asset recycling.”

“It’s not something that we have done in the U.S., but it’s something the administration and members of Congress are looking very closely at,” he said.

He said the U.S. business community sees public-private partnerships as “supplemental, not a replacement for increased federal investment.”

“We think the best thing we can do is sure up the Highway Trust Fund to gives states and local governments some predictability,” Mortimer said.

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VW sweetens the deal for unsold U.S. diesels

Keith Laing, Detroit News Washington Bureau
5:08 p.m. ET May 5, 2017

Washington — Volkswagen is offering sweet deals to entice drivers to buy its remaining diesel cars in stock at U.S. dealers after receiving clearance from federal regulators to sell its 2-liter TDI diesels from the 2015 model year.

The beleaguered German automaker is giving drivers a 24-month lease option with an $8,500 bonus, or 0 percent, 72-month financing with a $5,000 bonus, on its Generation 3 2.0L TDI vehicles. Eligible models include TDI version of the 2015 Jetta, Golf, Beetle, Passat and Audi A3, each modified to meet U.S. emission standards after the automaker was caught cheating regulations.

Volkswagen received clearance from the U.S. Environmental Protection Agency and the California Air Resources Board to sell the remaining 2015 TDIs after the U.S. government indicted six present and former VW executives. It also charged the company with three criminal felony counts for what regulators called a “10-year conspiracy” to rig hundreds of thousands of diesel cars to cheat U.S. emission standards.

Under the agreement, Volkswagen had to remove the so-called “defeat device” software that regulators said altered the emission performance of the TDI vehicles and replace it with software that directs the vehicle’s emission controls to function effectively in all normal driving conditions.

Volkswagen says of the changes: “The emissions modification will change the way your car’s engine and emission control systems interact. This will affect technical functions under some operating conditions, for example when the vehicle is started for the day. No significant changes to key vehicle attributes are expected, including fuel consumption, reliability, durability, vehicle performance, drivability, or other driving characteristics.”

The company says 11,000 of the modified diesels are now available for sale, roughly 3,100 of which were sold last month. By contrast, VW reported sales of more than 7,400 diesels the month in August 2015, enough to count for nearly 23 percent of sales in the month before the emission scandal broke.

Mike DiFeo, chairman of Volkswagen’s U.S. Dealer Council and dealer principal at Linden Volkswagen in Linden, New Jersey, says the once-barred cars have now become a hot commodity VW’s U.S. showrooms.

“Volkswagen publicly said they are not bringing diesels back to the U.S.,” he said. “With that being said, there’s still a lot of people that enjoy these vehicles.”

DiFeo’s dealership has 24 TDI vehicles available for sale. Three of them have already been sold, and he has received inquires about many of the others.

“These cars are not going to last,” he said.

Parent Volkswagen AG, Europe’s largest automaker and a cornerstone of corporate Germany, was forced to plead guilty to charges of participating in a conspiracy to defraud the United States and violating the Clean Air Act. It paid $2.8 billion in criminal fines and $1.5 billion in civil penalties related to the fraud.

In addition to the fines, Volkswagen agreed to pay a $14.7 billion settlement between Volkswagen and U.S. regulators to fix or buy back about 475,000 rigged 2-liter diesel vehicles. It also agreed to pay $1.2 billion to fix or buy back approximately 78,000 additional 3-liter diesels that were built to cheat U.S. emission standards. The scheme has cost Volkswagen more than $20 billion in fines and settlements.

Brian Moody, executive editor of Autotrader, said Volkswagen has benefited from a loyal U.S. fanbase that has helped it to weather the storm from federal regulators.

“Volkswagen’s TDI cars have always been popular with a select group of consumers, achieving almost cult-car status in just a few years,” he said. “The combination of great fuel-economy, fun, torque-rich acceleration and that ‘VW certain something’ mean a lot of owners are fiercely loyal to the VW diesel models. The cars are remarkably fun to drive. This group of loyal diesel buyer will likely be the audience for the newly re-available 2015 cars.”

Volkswagen has been under fire with U.S. regulators since the company was accused by the EPA in September 2015 of selling diesels for years with software that activated required air pollution equipment only during emissions tests. They had been marketed as “clean diesels” for the company’s Volkswagen, Audi and Porsche brands between 2008 and 2015.

The German automaker has admitted to programming its diesel cars to trick emissions testers into believing the engines released far less pollution into the air than they actually do, in violation of the federal Clean Air Act. Regulators have said in normal driving, they emitted up to 40 times more smog-causing nitrogen oxide than the legal limit.

DeFio, the VW dealer counsel chairman, said the company has offered a “great deal” to entice buyers to consider buying the modified diesels. One requirement: Volkswagen had to place new window stickers on the once-verboten diesel cars before they could offer them for sale.

Alan Brown, former VW U.S. Dealer Advisory Council president and general manager of Bobby Beck’s McKinney Volkswagen in Texas, said the TDIs have “been in the sales process for about two weeks and the inventory is going quickly.”

“We had 1,500 buybacks scheduled at our stores,” he said. “Eighty to 90 percent of that customer didn’t really want to give up the car. The financial incentives were so good that they gave the car up, but a lot of the feedback we got is that was the best car they ever had.”

The company agreed to compensate owners who purchased 2-liter diesels before September 2015 with payments of $5,100 to $10,000, depending on the age of their cars, as part of its settlement with federal regulators. Some drivers have not been satisfied with Volkswagen’s offered for their polluting diesels.

“This thing has been nothing but a nightmare of trouble,” Michael Soileau, 67, of Atlanta, Texas, who owns a 2014 TDI Volkswagen Passat, told The Detroit News. “The dealers have been jacking me around. They don’t want to give me enough money back to make the deal worthwhile. It’s a $35,000 car, which I’m still making payments on. They want to give me $18,000.”

Soileau would not consider buying another TDI diesel from Volkswagen, no matter how good the incentives: “Oh my God, how could I justify it? It’s the worst situation I’ve ever been in my life as far as owning a car. I mean, it’s horrible. They’ve got me over a barrel because I still owe like $25,000 on the car…. It’s the scammiest thing I’ve seen.”

Moody, the Autotrader editor, predicted there are likely enough Volkswagen fans remaining who do not feel as strongly as Soileau to allow the company to move its remaining 2015 U.S. diesels.

“The VW incentives are not enough to move Toyota Prius or Chevy Volt shoppers into a VW dealership,” he said, “but are enough that VW diesel fans will be back and think twice before looking, or buying, elsewhere.”

Brown, the former Volkswagen dealer council leader, said VW dealers are in better shape now than they were when the emission scandal first began in 2015.

“I think Volkswagen is going to be the franchise to own,” he said. “I’m glad we weathered the storm that we did. I think dealer attitude is at all-time high compared to what it was 24 months ago.”

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Critics fear Trump will tap auto exec for NHTSA

Keith Laing, Detroit News Washington Bureau
12:15 a.m. ET April 24, 2017

Washington — Car-safety advocates are worried that President Donald Trump might turn over the keys to the agency charged with regulating the safety of the nation’s automobiles to someone from within the industry’s ranks.

Rosemary Shahan, president of the Sacramento, Calif.-based Consumers for Auto Reliability and Safety group, said she would not be surprised if Trump reaches out to an auto executive to fill the position of National Highway Traffic Safety administrator, vacant since Trump took office in January.

“He has a penchant of appointing people who have been regulated and allowing them to dismantle agencies,” Shahan continued. “You have all these companies who have been under investigations for safety violations recently. I wouldn’t be surprised if he appointed somebody from one of them. It would be consistent with his other appointments.”

No names for candidates appear to be circulating among industry and government insiders in Washington. Several have said it does not appear that filling the position is a high priority for the president, who has yet to make numerous appointments in the government.

But Shahan speculates on one potential candidate: General Motors Co. Chairman and CEO Mary Barra.

“He seems to be very friendly with her,” Shahan said of Trump’s relationship with GM’s chief, noting he has named Barra to a Strategic and Policy Forum that advises him on economic issues and jobs growth, and met with her in Washington on at least two occasions.

The White House declined to comment on the president’s plans for filling the vacancy. GM would not comment on whether Barra would be interested in the regulatory job.

Barra, who became the first woman to lead an automaker in January 2014, is in a strong position at her company, which is posting record profits. She has assembled a cohesive team of executives who all stand to earn substantial bonuses if they remain with the company.

Trump has appointed other high-level business executives to serve in his Cabinet: Former Exxon Mobile CEO Rex Tillerson is U.S. secretary of state. Investor Wilbur Ross is commerce secretary. Additionally, Trump selected school-choice advocate Betsy DeVos, a West Michigan GOP mega-donor and philanthropist, to be his education secretary. World Wrestling Entertainment CEO Linda McMahon leads the Small Business Administration.

“If he appoints someone from the auto industry, there is going to be a lot of concern on the Hill and among groups like ours,” said former Public Citizen president Joan Claybrook, who was National Highway Traffic Safety administrator during the Carter administration in the late 1970s. “That’s a real conflict of interest. You need someone who is more even-minded about what needs to be done.”

Trump has signed an executive order that requires the federal government to cut two regulations for every one that’s enacted. He has proposed cutting $2.4 billion, or 13 percent, from the U.S. Department of Transportation’s current budget levels as part of his effort to cut non-military spending by $54 billion to support an increase in defense funding. NHTSA is a subsidiary of the transportation department.

Shahan, the safety group president, expressed concern that an industry insider would target regulations that address auto safety.

“He’s on a deregulation kick,” she said. “That’s not comforting. That’s worrisome. Is the new administrator at NHTSA going to deregulate auto safety? He’s so fixated on threats from outside the U.S. that he doesn’t consider that there are threats to us domestically like auto crashes. When he talks about threats to our safety, he’s talking about ISIS.”

NHTSA and other federal agencies have career staffers who remain in place when presidential administrations change. It will likely be hard for Trump to make drastic changes to auto regulations before naming a new top highway safety cop.

Jeff Davis, senior fellow with the independent Eno Center for Transportation think tank in Washington, said Trump is not tardy with his NHTSA choice by recent historical standards. He noted that Obama did not nominate his first NHTSA administrator until nearly 11 months after taking office. President George W. Bush did not nominate his first until five months after moving into the White House. And President Bill Clinton did not nominate his first NHTSA administrator until 13 months after taking office.

Davis said the NHTSA vacancy is not impeding the Trump administration’s ability to police safety regulations.

“Legally, the authority to issue and revise motor vehicle safety standards … is vested in the secretary of transportation,” he said. “The secretary can delegate or un-delegate that authority to the NHTSA administrator as they see fit, but the important thing is that the regulation-and-recall process can be carried out by the career staff of NHTSA and put into legal effect by the secretary in the absence of a confirmed NHTSA administrator.”

Claybrook, the former NHTSA administrator, said she started working at the agency three months after Jimmy Carter became president. “Agency heads are usually the last ones to get appointed,” she said.

But she said the highway safety agency needs a strong administrator because it has “always been a bit of a stepchild among agencies” and it is “desperately underfunded.”

“You need someone who is talented to fight those battles,” she said of the effort to convince Congress to spend more money on such things as hiring staff to monitor potential safety recalls. “There are quite a number of opportunities to save lives that there is no leadership on right now.”

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Dems fight to save funding for Ann Arbor EPA facility

Keith Laing, Detroit News Washington Bureau
5:34 p.m. ET April 19, 2017

Washington — Democrats in Michigan’s congressional delegation are working to stave off cuts proposed for the U.S. Environmental Protection Agency’s facility in Ann Arbor, which is home to most of the agency’s car-emissions testing.

The Trump administration has proposed cutting $48 million from the EPA’s Federal Vehicle and Fuels Standards and Certification program and eliminating federal funding for 168 full-time jobs at the agency’s National Vehicle and Fuel Emissions Laboratory in Ann Arbor, according to a March 21 planning document obtained by the Washington Post. According to that document, 304 people work in the program. The EPA would not say Wednesday how many employees of the program are at the Ann Arbor lab.

The Ann Arbor facility is where the EPA certifies that vehicles and engines meet federal emissions and fuel economy standards. It is also used by the agency to analyze fuels and fuel additives.

U.S. Rep. Debbie Dingell, D-Dearborn, said in a Wednesday interview with The Detroit News that the Ann Arbor laboratory is “critical for issues that matter in the auto industry.”

“It’s the national laboratory for both fuel economy and emissions,” said Dingell, adding she is “going to do everything I can” to protect the jobs at the Ann Arbor facility.

“It’s simply critical to the auto industry, both domestic and foreign manufacturers, and emissions,” she said. “It’s important to consumers, but also to the (auto) companies.”

Late Wednesday, Dingell sent a letter to President Donald Trump, EPA Administrator Scott Pruitt and Office of Management and Budget Director Mick Mulvaney. She demanded answers about the proposed elimination of federal funding for the EPA in general and the emissions-testing jobs in Ann Arbor.

“Their research, testing, analysis and technological studies provide critical background for the establishment and monitoring of both cafe and emission standards,” she wrote. “Policymakers like me depend on their work as do consumers who are being protected by these environmental regulations.”

Dingell said she has attempted to visit the Ann Arbor facility to bring attention to the importance of the work that is done there, but she said the EPA has rebuffed her requests.

Sen. Debbie Stabenow, D-Lansing, added in a statement provided to The News on Wednesday: “The Trump administration’s proposed cuts to the Ann Arbor Fuel Emissions Laboratory are shortsighted and harmful. Not only could these cuts increase costs for people in Michigan who are purchasing a car, but they also hurt our auto industry and put Michigan jobs at risk.”

A statement from Sen. Gary Peters, D-Bloomfield Township, reads: “We should be investing in the development of these job-creating vehicle technologies, not eliminating positions that help ensure Michigan’s auto industry remains a world leader in vehicle innovation.”

The cuts to the Ann Arbor facility are part of a proposed budget for the EPA during the 2018 fiscal year that calls for the agency’s overall funding to be cut by $2.6 billion, or 31 percent, from its current spending levels. The budget would eliminate 3,200 positions at the agency charged with ensuring the quality of the nation’s air and water supplies.

The EPA’s budget document said the Trump administration plans to submit legislative language to Congress that would make the EPA’s fuel efficiency certification program and the affected positions at the Ann Arbor facility reliant on fees that are paid by automakers. Environmentalists have warned the elimination of federal funding for the Ann Arbor positions would hinder the EPA’s ability to catch automakers, like who might be cheating on U.S. emission rules as it was able to do with its recent investigation of Volkswagen AG.

A spokeswoman for the EPA said earlier in the week the agency is “evaluating different approaches to implementing the president’s budget that would allow us to effectively serve the taxpayers and protect the environment.”

“While many in Washington insist on greater spending, EPA is focused on greater value and results,” EPA spokeswoman Liz Bowman said in an email to The News on Tuesday. “The EPA will partner with the states to ensure a thoughtful approach is used to maximize every dollar to protect our air, land and water.”

Wade Newton, director of communications at the Washington, D.C.-based Alliance of Automobile Manufacturers, said the proposed cuts to federal funding for emission-testing positions at the EPA’s Ann Arbor facility could delay new-car certifications.

“As automakers, we place a tremendous deal of importance on certification and compliance matters,” Newton said in an email. “Because certification is one of the Clean Air Act’s requirements, we can’t ship from our plants or docks vehicles that haven’t been certified. Whatever happens, automakers will want to avoid any delays in the certification process that could increase vehicle costs and limit vehicle availability to market.”

The proposed cuts would follow an investigation by the EPA of Volkswagen for selling hundreds of thousands polluting diesels in the U.S. The probe led to the German automaker paying $2.8 billion in criminal fines and $1.5 billion in civil penalties related to the fraud. The agency also opened an investigation during the final days of the Obama administration into Fiat Chrysler Automobiles NV’s compliance with federal emission standards the agency says could involve software it says could be similar to Volkswagen’s so-called “defeat devices.”

FCA has vigorously disputed the agency’s charges, although the company has warned shareholders about the potential for fines related to the EPA’s accusations.

Nick Conger, press secretary for the Natural Resources Defense Council and former communications director for the EPA’s Office of Enforcement and Compliance, said the EPA budget cuts proposed by Trump will make the agency powerless to catch future environmental scofflaws in the auto industry.

“These funding proposals and budget cuts are a thinly veiled attempt to gut the programs that protect us from vehicle emissions,” Conger, who served under former EPA Administrator Gina McCarthy from 2013 to 2016, told The News.

“EPA brought Volkswagen to justice for cheating and illegally polluting our air,” Conger continued. “There could be other automakers out there cutting corners and endangering the air we breathe. Without a fully funded EPA, these violations would go unchecked.”

Andrew Linhardt, the Sierra Club’s associate director for federal advocacy, added: “The fact that they’re targeting agencies that are about enforcement shows what their priorities are. They’re about helping polluters. There doesn’t seem to be much for environmental protection or climate change.”

Lindhart said he knows he will have a fight on his hands to push back against Trump’s proposed budget cuts, but he predicted Congress would ultimately ignore the president’s suggestions about most funding levels. He said he is “pretty comfortable” it’s a non-starter.

“I don’t know the last time a president’s budget passed in that form on the Hill,” he said.


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