Managing Automotive

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Managing Automotive

Industry Interests

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Takata's Japanese parent gets temporary litigation shield

A Delaware bankruptcy judge gave Takata’s Japanese parent, which has petitioned for Chapter 15 recognition, temporary protection from collection efforts and lawsuits in the United States, with a larger fight over whether that shield should become permanent set for September. During a hearing in Wilmington, U.S. Bankruptcy Judge Brendan L. Shannon granted the provisional relief requested by Chapter 15 debtors Takata Corp. and affiliates Takata Kyushu Corp. and Takata Service Corp. that extends what are essentially the automatic stay powers in Chapter 11 to those entities. Under bankruptcy law, debtors who file under Chapter 11 are automatically protected from collection efforts and litigation unless approved by the bankruptcy court.

[Law360]

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GM blasts $1 billion deal between ignition switch plaintiffs, creditor trust

Plaintiffs suing General Motors Co (GM.N) over faulty ignition switches and other alleged vehicle defects have reached a $1 billion settlement requiring the automaker to turn over that amount of stock, a lawyer for the plaintiffs said in a court hearing. GM lawyer Richard Godfrey strongly criticized the agreement, telling U.S. District Judge Jesse Furman in Manhattan the Detroit-based company was given no say in the deal negotiated between the plaintiffs and a trust set up for creditors of “old GM,” which holds many liabilities predating the automaker's 2009 bankruptcy. Godfrey said the settlement was a result of collusion between the plaintiffs and the trust, and "a complete surrender and sellout using new GM's money."

[Reuters]

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Tesla boosts bond sale to $1.8 billion for Model 3

Debt investors proved no more immune to Elon Musk’s charms than their swooning counterparts in the stock market. Musk’s electric-car maker Tesla Inc. raised $1.8 billion in its debut bond sale, boosting the amount by $300 million to meet demand. The eight-year bonds were priced at a record-low yield of 5.3 percent -- a touch higher than initial talk of 5.25 percent. They’ll help fund the ambitious rollout of the Model 3, the linchpin of Musk’s plans to turn Tesla into a mass-market vehicle maker.  

[Bloomberg]

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Driverless-car outlook shifts as intel takes over Mobileye

About three years ago, the chip giant Intel seemed like a bystander in Silicon Valley’s race to develop self-driving cars. Even in microchips, its strength, Intel was scrambling to catch up to its rival Nvidia, whose superfast processors were attracting automakers because of their ability to fuse images from the cameras and radar sensors to detect obstacles. But Intel is betting that it can reshape the competitive landscape with its acquisition of Mobileye, which makes cameras, sensors and software that enable cars to detect what is ahead.

[New York Times]

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Toyota teams up with Mazda on electric vehicles, $1.6 billion US plant

Japanese automakers Toyota Motor Corp. and Mazda Motor Corp. plan to spend $1.6 billion to jointly build auto manufacturing plant in the U.S. — a move that will create up to 4,000 jobs, both sides said. The plant will have an annual production capacity of about 300,000 vehicles, and will produce Toyota Corollas as well as a new Mazda crossover vehicle for the North American market. Toyota wouldn't say where the plant would be built, but because the new plant will build the Corolla, chances are it will be located near Toyota's current Corolla plant in Mississippi to be close to parts supply companies.

[Chicago Tribune]

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Industry Interests, Litigation & Investigations
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Arent Fox Secures Precedent Setting Victory on Behalf of Maserati Dealers

New York, NY - Earlier this week, Arent Fox LLP secured an important decision on margin and bonus programs for Maserati dealers in New York. The Arent Fox team argued before Administrative Law Judge Walter Zulkoski of the New York Department of Motor Vehicles, who ultimately granted in all aspects the firm’s motion for partial summary judgment. 
 

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Amazon is planning to sell CARS as online retail giant starts hiring new dealer sales staff

Reports suggest the company will start selling vehicles on the UK website, before rolling out to other countries if the trial is successful.

While Amazon hasn’t confirmed or denied the reports, details of the launch have been leaked by a trade magazine in Germany.

Automobilwoche claims the e-commerce platform wants to start selling cars in Europe, and has already started to recruit industry experts, including specialist Christoph Moeller, who confirmed to the publication that Amazon has also started hiring car sales staff.

[The Sun]

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U.S. House panel approves legislation to speed deployment of self-driving cars

An influential U.S. House committee approved a revised bipartisan bill on a 54-0 vote that would speed the deployment of self-driving cars without human controls and bar states from blocking autonomous vehicles.  The bill would allow automakers to obtain exemptions to deploy up to 25,000 vehicles without meeting existing auto safety standards in the first year, a cap that would rise to 100,000 vehicles annually over three years.  Automakers and technology companies believe chances are good Congress will approve legislation before year end.

[Reuters]

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U.S. regulators approve fix for 326,000 VW diesels

The U.S. Environmental Protection Agency and California Air Resources Board approved a fix for 326,000 Volkswagen AG diesel cars, the agencies and the automaker said.  The fix will include hardware and software upgrades, including replacing an emissions catalyst but will reduce vehicle fuel economy ratings by as much as 2 miles per gallon.  The world's largest automaker will still need to obtain approval for a resale plan for the 2009-2014 model diesel vehicles after making repairs - something that is expected in the coming weeks - but the fix is a significant milestone for the company that aims to move beyond its diesel emissions crisis.

[Reuters]

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Penske Automotive says Q2 net income rises 14 percent - Retailer calls results the best in company history

Penske Automotive Group Inc. reported a 14 percent gain in second-quarter net income, crediting increased business in used-vehicle sales, service and parts and finance and insurance.  But, like Asbury Automotive Group Inc., Penske also saw its gross profit margins per vehicle squeezed in both new and used vehicle sales.  The nation's second-largest dealership group said net income rose to $106.2 million in the quarter as revenue jumped 2.5 percent to $5.38 billion. 

[Automotive News]

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Arent Fox LLP, founded in 1942, is internationally recognized in core practice areas where business and government intersect. With more than 350 lawyers, the firm provides strategic legal counsel and multidisciplinary solutions to clients that range from Fortune 500 corporations to trade associations. The firm has offices in Los Angeles, New York, San Francisco, and Washington, DC.