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Defying Trump, major automakers finalize California emissions deal

WASHINGTON — The California Air Resources Board (CARB) and major automakers on Monday confirmed they had finalized binding agreements to cut vehicle emissions in the state, defying the Trump administration's push for weaker curbs on tailpipe pollution. The agreements with carmakers Ford Motor Co, Volkswagen AG, Honda Motor Co and BMW AG were first announced in July 2019 as voluntary measures prompting anger from U.S. President Donald Trump. A month later, the Justice Department opened an antitrust probe into the agreements. The government ended the investigation without action. The Trump administration in March finalized a rollback of U.S. vehicle emissions standards to require 1.5% annual increases in efficiency through 2026. That is far weaker than the 5% annual increases in the discarded rules adopted under President Barack Obama. The 50-page California agreements, which extend through 2026, are less onerous than the standards finalized by the Obama administration but tougher than the Trump administration standards. The automakers have also agreed to electric vehicle commitments. Volvo Cars, owned by China's Geely Holdings, said in March it planned to join the automakers agreeing to the California requirements. It has also finalized its agreement. The settlement agreements say California and automakers agreed to resolve "potential legal disputes concerning the authority of CARB" and other states that have adopted California's standards. In May, a group of 23 U.S. states led by California and some major cities, challenged the Trump vehicle emissions rule. Other major automakers like General Motors Co, Fiat Chrysler Automobiles NV and Toyota Motor Corp did not join the California agreement. Those companies also sided with the Trump administration in a separate lawsuit over whether the federal government can strip California of the right to set zero emission vehicle requirements. Ford said the "final agreement will reduce emissions in our vehicles at a more stringent rate, support and incentivize the production of electrified products, and create regulatory certainty." BMW said "by setting these long-term, predictable, and achievable standards, we have the regulatory certainty that is necessary for long-term planning that will not only reduce greenhouse gas emissions but ultimately benefit consumers as well." 

Ford nets $924M in first quarter

Where General Motors' first-quarter 2015 financials showed growth in many major metrics, Ford's newly released numbers had falling figures in most of the vital categories. The automaker's Q1 revenue shrank to $33.9 billion, down $2 billion, and net income fell to $924 million, a $65-million drop. However, pre-tax profits increased slightly to $1.4 billion, $24 million more than in the same period in 2014, and operating margin rose to 3.6 percent, up 0.2 percent. Despite the less-than-stellar numbers, the Blue Oval thinks 2015 should be positive for the company. "The first quarter was a good start to a year in which our results will grow progressively stronger as the new products we have been launching start to pay off," CEO Mark Fields said in the financial announcement. The automaker has 15 vehicles to launch globally this year, and only three of them are already out. By the end of 2015, Ford predicts pre-tax profits of between $8.5 billion and $9.5 billion. In terms of vehicle sales, Ford slipped by 21,000 to a total of 1.568 million worldwide in the first quarter. North American sales dropped to 678,000, which was 39,000 less than last year, and pre-tax profits fell to $1.34 billion, a $160-million fall. The company explained the reductions on this continent as linked to the launches of the latest F-150 and Edge. In other major markets, European wholesales grew to 376,000 vehicles, a 9,000-car boost from last year. Pre-tax results there increased by $9 million, but the area still showed an overall loss of $185 million. In the Asia Pacific region, Ford moved 16,000 more units than in Q1 2014 to reach 366,000. However, due in part to preparing for new vehicles, the company only made $103 million there, a $188-million drop. The automaker released all of these figures as part of a PDF, which you can download here. Related Video:

Ford cuts 950 Russian jobs on weak demand

The Russian auto market, in decline for the past year and further hit by the declining value of the ruble and recent sanctions over its annexation of Crimea, has forced Ford to cut jobs and shifts at two of its joint venture plants there. Around 700 of the 2,700 total workers who build the Russian-market Focus and Mondeo will be cut at the plant in Vsevolozhsk, near St. Petersburg as it drops to a single production shift. A second plant about 700 miles away in Yelabuga, in the Tartarstan region, will lose 250 workers. That plant builds seven vehicles, including the Explorer, Kuga and Edge.
The Moscow Times says Ford has been especially hit by the market decline, the overall market losing 5.5 percent in 2013 compared to the year before, but Ford sales dropping 18 percent in 2013 year-on-year. This year isn't going any better, with The Blue Oval posting a 21-percent decline through the first two months of 2014. That's why, though the Yelabuga plant builds the CUVs that customers are moving into, even it is facing cuts.
The job cuts in Vsevolozhsk come on top four-week plant shutdown planned so that the paint and body shops can go to one shift. In a statement, the company said, "Ford Sollers remains absolutely committed to the Russian market and is confident it has the right product plan, people and assets to deliver long-term profitable growth."