Detroit Bureau on Twitter

Posts Tagged ‘obama administration’

White House To Clean Up Gas, Auto Emissions

But cutting sulfur content could slightly boost pump price.

by on Mar.29, 2013

The Obama administration is calling for new rules to lower sulfur emissions in gasoline.

The Obama Administration is proposing new rules to reduce the level of noxious sulfur in the nation’s gasoline supply, a move that should reduce emissions – but also add a very small increase in pump prices.

The so-called Tier 3 standards set to go into effect by 2017 would more than offset that increase by improving the nation’s health and saving billions in medical bills, the White House contends. It would yield add-on benefits as lower sulfur levels would permit automakers to adopt even more advanced pollution control systems, several industry executives told

Powering your Auto Knowledge!

The Administration previously took steps to reduce sulfur content in the U.S. diesel fuel supply. That has made it possible for the auto industry to meet stringent smog and particulate rules and, in turn, greatly expand the range of high-mileage diesel passenger vehicles available in the United States.


Ford Will Build a Second Engine Plant in China

Chinese industrial policy prompts $500 million JV reinvestment.

by on Sep.27, 2010

Reinvesting in China is mandated by an industrial policy that in practice requires it .

Ford Motor Company and its government dictated partners are building new engine plant in China that is due to open in 2013. With the additional capacity of 400,000 units at the new facility, Ford’s joint venture, Changan Ford Mazda Automobile Ltd (CFMA), is more than doubling its existing engine capacity of 350,000, to 750,000 engines annually.

Ford Motor Company CFO Lewis Booth joined Chongqing Mayor Huang Qifan, Chongqing New North Zone Administrative Committee Director Xiong Xue, Chongqing Changan Automobile Company chairman Xu Liuping, as well as Ford China chairman and CEO Robert J. Graziano in Chongqing at an official signing ceremony over the weekend.

China is now by far the world’s largest auto market, and Chinese industrial policy in effect requires that all profits earned there are reinvested in the country and its local partners. The U.S. remains alone among industrialized nations – with elected or totalitarian governments – without any such job and investment protecting policy.

The $500 million (RMB 3.4 billion) investment will be funded entirely by CFMA and will be located in Chongqing’s so called New North Zone.


DOE Proposes 27 “Energy Efficiency” Penalties

Chinese, Japanese, Korean firms accused of not certifying compliance with U.S. efficiency or conservation rules.

by on Sep.13, 2010

DOE has been severely criticized for its lack of enforcement of U.S. regulations.

The Department of Energy today announced 27 new proposed penalties against companies selling products in the United States without certifying that they comply with energy efficiency or water conservation standards.

The legally required certifications are said to ensure that products sold in the U.S. deliver significant energy and cost savings to buyers. Prior to the Obama Administration, the Department had never systematically enforced DOE’s 35-year-old energy efficiency standards. Lax enforcement of energy efficiency standards undermines the goal of increased energy efficiency – now clearly a national security issue.

There are other implications as well. While not directly automotive industry related, today’s enforcement actions – coming on top of a newly activist Department of Transportation in automotive safety matters and the  U.S. Trade Representatives’ duties on Chinese tire imports, among other well-publicized examples –  are the latest indications that an industrial policy of sorts to protect manufacturing jobs is underway across the Obama Administration.

The U.S. is alone among industrial nations – either communist run or elected democracies – to lack formal policies to protect U.S. jobs, now a contentious mid-term election year issue with record high unemployment levels not seen since the Great Depression.


GM’s Fired Fritz Henderson Surfaces at Sunoco

Henderson will become Chairman and CEO of SunCoke Energy.

by on Sep.07, 2010

Then GM CEO Fritz Henderson announces the Chevrolet Volt, the electric car designed to put oil companies out of business.

Sunoco, Inc. has announced that Frederick A. “Fritz” Henderson has joined the company as a senior vice president to help prepare for a previously announced separation of SunCoke Energy from parent Sunoco.

Coke is a key ingredient in steel, of course, a material that auto companies are large purchasers of during their often contentious relationships with suppliers.

Sunoco said last June that  it would separate SunCoke Energy from itself as part of a well-worn Wall Street strategy “designed to unlock shareholder value.” This type of financial engineering ploy clearly didn’t work in the now notorious auto industry captive  component maker spinoffs – GM’s Delphi and Ford Motor’s Visteon. Both transactions ultimately resulted in bankruptcies and costly shareholder losses.

SunCoke facilities in the U.S. have the capacity to manufacture approximately 3.67 million tons of metallurgical coke annually – roughly 25% of domestic production. Sunoco also has an equity interest in a 1.7 million tons-per-year coke-making facility in Vitoria, Brazil.


Car Czar from Wall Street Faces S.E.C. Ban?

Bribes by Democratic contributor Steven Rattner are an issue.

by on Jun.04, 2010

Are you shocked that kickback money played a part in New York politics?

I'm shocked, shocked that money played a part in a Wall Street contract.

A Wall Street financier who was the Obama administration’s Car Czar is apparently fighting a Security and Exchange Commission move to ban him from working in the financial industry for his part in a “pay to play” scheme.

According to numerous press reports, Steven Rattner, who masterminded the Treasury Department bankruptcy filings of General Motors and Chrysler last year, is under investigation by Andrew Cuomo, New York’s ambitious and Democratic attorney general.

Cuomo  looked at his role as part of the Quadrangle Group in a kickback scheme that netted the firm millions of dollars of business from a New York State pension fund.

The problem in trying to sort out this controversy is that the source, or sources, are un-named in the stories claiming that a brouhaha is underway between the Obama Administration, a politically ambitious prosecutor and yet another federal regulatory agency that failed to do its regulatory job.

According to the gossip, the U.S. Security and Exchange Commission wants to ban Rattner from the business for several years because of Quadrangle’s conduct. Rattner resigned his Treasury position shortly after the auto bankruptcies and 363 sales were accomplished, but has since been harshly critical in a series of public appearances  or written pieces of Detroit executives – including Rick Wagoner and Fritz Henderson of GM, who were fired by Treasury as part of the reorganizations that cost taxpayers billions.

Rattner’s former firm, Quadrangle, paid $12 million in fines last spring to settle the charges with state and federal officials. However, Rattner was not part of the plea-bargain deal with Quadrangle, where he was a founding partner-  and where he made millions upon millions – because he, allegedly, resisted the proposed settlement requiring his exile.


Fuel Economy & Greenhouse Gas Rules Finalized

The most aggressive U.S. standards ever are now in place.

by on Apr.01, 2010

The Administration has delivered a historic compromise in the face of what looked to be overwhelming odds against it.

The U.S. Department of Transportation (DOT) and the U.S. Environmental Protection Agency (EPA) today jointly established new federal rules that set the first-ever national greenhouse gas emissions standards, and will increase the fuel economy of all new passenger cars and light trucks sold in the United States.

Starting with 2012 model year vehicles, the rules together require automakers to improve fleet-wide fuel economy and reduce fleet-wide greenhouse gas emissions by about 5% every year.

NHTSA has established fuel economy standards that strengthen each year, reaching an estimated 34.1 mpg for the combined industry-wide fleet for model year 2016.

The rules, with a claimed cost of $52 billion and benefits of $240 billion, are compromised or the results of compromises in several areas, depending on your point of view. The vast majority of buyers will not see fuel economy anywhere near 34 mpg.

Because credits for air-conditioning improvements can be used to meet the EPA standards, but not the NHTSA standards, the EPA standards require that by the 2016 model-year, manufacturers must achieve a combined average vehicle emission level of 250 grams of carbon dioxide per mile. The EPA standard would be equivalent to 35.5 miles per gallon if all reductions came from fuel economy improvements.

Perhaps more worrisome from policy and health points of view are exemptions for the  gas guzzling, CO2 belching vehicles that the rich buy.

DOT and EPA received more than 130,000 public comments on the rules proposed in September 2009, and officials said there was “overwhelming support” for the new national policy. This means that automakers will be able to build a single, light-duty national fleet that satisfies all federal requirements, as well as the standards of California and other states.

The collaboration of federal agencies also allows for clearer rules for all automakers, instead of three standards (DOT, EPA, and a California standard), and was a clear victory for the Obama Administration that negotiated it after decades of gridlock and legal maneuvering.

The joint rules are also a sign of the decreasing political influence of automakers, which had long blocked fuel economy increases, and recognition of a growing green sentiment among voters.   (more…)

IRS Cuts Mileage Deductibility Rate.

Raising taxes during the Great Recession is latest political and economic gaff out of an "out of touch" Washington.

by on Dec.04, 2009

While the Obama administration was blaming businesses yesterday for what is in our view an understandable lack of hiring as the Great Recession drags on, the Internal Revenue Service made things worse by cutting the tax deductible mileage rates for firms.

Wathing Your Wallet!

Watching Your Wallet!

In effect, this is a tax increase for all those businesses that are struggling to stay afloat during the worst economic climate since the Great Depression. Is it really that hard to figure out why there is no hiring underway?

Beginning on January 1, 2010, the new standard mileage rates for the use of a car, van, pickup or panel truck will be:

  • 50 cents per mile for business miles driven
  • 16.5 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The new rates for business, medical and moving purposes are lower than last year’s by roughly ten percent. The mileage rates for 2010 reflect, according to the IRS, “generally lower transportation costs compared to a year ago.”


Budget Review Shows Deficits Growing $2 Trillion!

Government to sell auto companies “as soon as practicable.”

by on Aug.25, 2009


The fiscal situation continues to worsen. Now economic growth isn't predicted until 2010.

Today the White House Office of Management and Budget (OMB) released the mid-session review to the House of Representatives. The latest update to  the Administration’s economic forecast, last done in February, and its budget projections going out until 2019 shows a somewhat smaller federal 2009 deficit, but much larger subsequent deficits than previously projected.

It also shows two more years of 10% unemployment rates, and a -2.8% drop in the nation’s economy this year instead of  the previously forecast growth.

Executive summary devoid of spin: the economy is in bad shape with no immediate relief in sight. This is bad news for the nation’s shrinking middle class, for the automobile business and our whole consumer-spending based economy.

“Overall, it underscores the dire fiscal situation that we inherited and the need for serious steps to put our nation back on a sustainable fiscal path,” said Peter R. Orszag, Director of the OMB.

The report is certain to be attacked by the Republican party whose popularity along with the Democrats continues to decrease as economic woes continue and jobs are being lost.

The Obama Administration now predicts that taxpayer expenses for financial system bailouts will be less than anticipated. In addition, an open item for a possible further financial stabilization program has been removed. The cost of the FDIC bank rescues have also been lowered.

The bottom — red-ink — line is a slight $262 billion improvement in the 2009 deficit, now projected to be whopping $1.58 trillion – or 11.2% of Gross Domestic Product – down from a previously projected $1.84 trillion or 12.9% of GDP.


Here We Go Again: With Crude Oil at Record 2009 Prices, Where is Our Energy Policy?

Demand and speculators need reigning in; supplies added.

by on Aug.24, 2009


The price of oil is rising once again. Demand is increasing to record levels in China as the U.S. appetite for oil is growing again, too. Reserves  are dropping as well. So crude oil is now selling at more than $73 a barrel, a record for all of 2009.

Moreover, since there has been little change in the way oil is produced, traded or regulated, there is no reason speculators cannot keep oil moving up to the record $147 a barrel that it hit in July of 2008, barely a year ago. In fact, some warn oil prices won’t stop there this time.

A troubling question immediately comes to mind: will the effects of such high oil prices once again send the world’s economies into even deeper recessions than they are currently in? The timing is terrible. Western economies are just now showing signs of recovering.

Next tough question: will these higher oil prices then plunge back down to the $40 a barrel they were in December of 2008 because economies have tanked as a result of the higher oil prices? It’s a vicious circle.

The latest run-up in oil prices is prompting a debate over the various economic theories that purport to explain its pricing. How U.S. regulators and politicians interpret these theories  is key to establishing more effective policies than we have used in the past. Many critics of our lack of a coherent energy policy argue that we haven’t learned from previous mistakes; that we must now have an energy policy that takes back control of our economy and our security from hostile nations. (Click here for the history of U.S. energy policy and its ongoing failure to cut down on oil imports.)


CARS Program is Clearly an Effective Stimulus!

August sales will likely cross the one million mark for the first time in the past 12 months, just as Clunkers is about to end.

by on Aug.20, 2009

And the Clunkers trade-in new car sales winner is?

And the Clunkers trade-in new car sales winner is?

There’s good news and bad news about the government’s Car Allowance Rebate System (CARS) or “cash for clunkers” program, depending on your point of view.

First, after months of debate that started last January in Congress — as China and European countries went ahead with their own Clunkers programs — the U.S. version officially got under way in late July. CARS immediately increased vehicles sales by at least 250,000 units or more. When the first $1 billion in taxpayer funding evaporated in about a week, Congress took $2 billion from another auto technology program to keep CARS rolling. That cash is now apparently gone, or will be by September.

An announcement could come as early as today that the program’s $3,500 to $4,500 rebates are over, but we’re guessing  that the Obama administration will face the same problem that automakers have historically had with rebates – once cash handouts are in place they are almost impossible to remove as buyers simply wait for the next round of rebates or stay out of the market. We’ll see how this plays out in the depressed economy.

Meanwhile, without question, the program is wildly successful at boosting auto sales. New vehicle retail sales in August are now forecasted to cross the 1-million-unit mark for the first time in the past 12 months, according to J.D. Power and Associates, which gathers real-time transaction data from more than 10,000 dealerships across the United States.

Based on the first 13 selling days of the month, retail sales for the month of August are expected to come in at slightly more than 1 million units, up nearly 2% from one year ago. This marks the first increase in retail sales volume since June of 2007.