Sep 18, 2019

Axios Navigate

Joann Muller

It's Hump Day! Thanks for reading. Please tell your friends they can subscribe here. If you have tips or feedback, just reply to this email.

  • Expert Voices contributor Tiffany Chu considers a bill that would incentivize less driving.
  • Smart Brevity count: 1,158 words, ~ 4 minutes.
1 big thing: GM and UAW bargaining in the dark

A striking auto worker at GM's assembly plant in Flint, Mich. Photo: Jeff Kowalsky/AFP/Getty Images

The conflict between GM and its 46,000 striking workers comes down to a fundamental issue: both sides are unclear about where the industry is headed.

The big picture: The labor dispute is shaped, in part, by the changing transportation landscape. Traditional business models are fading, but it's not clear whether investments in new technologies like electric vehicles and self-driving cars will pay off.

What's happening: Faced with uncertainty, anxious workers naturally want to lock down income and job guarantees — exactly the opposite of what employers want, which is flexibility and contingency.

Where it stands: Prospects for a quick settlement faded Tuesday, after GM cut off union members' health benefits, escalating the dispute that has shut down 55 factories, warehouses and other GM facilities.

  • Workers are eligible for continued coverage under union-paid COBRA benefits, but the move significantly increases the cost to the UAW to keep workers off the job.
  • The tactic could eventually drive the parties toward a resolution, but little progress was reported Tuesday and sources said "main table" negotiations on financial issues had been suspended as of Tuesday evening.

Details: Businesses hate uncertainty, and carmakers are awash in it right now.

  • Fuel economy standards aren't finalized because the EPA wants to roll back Obama-era targets and revoke California's authority to set stricter rules; a court battle is likely.
  • A new trade deal between the U.S., Canada and Mexico has yet to be ratified.
  • President Trump's trade war with China is escalating.
  • Steel tariffs, while lifted on Canada and Mexico, remain in place for imports from other countries.
  • Trump is threatening 25% tariffs on imported cars and auto parts to protect U.S. national security.

Meanwhile, the shift toward electric vehicles is a major source of anxiety for the union.

  • EVs have 80% fewer parts, and are easier to assemble, which means they'll require a lot fewer workers, including those who manufacture parts like engines and transmissions, according to a UAW analysis.

But EVs could also create new jobs making things like batteries, electric motors, electronics and thermal systems.

  • The union's worry is the production of these EV components could shift to new players that are more likely to import them from overseas.
  • The UAW wants companies like GM to commit to re-tool plants, re-train workers, and produce new components in the U.S.
  • GM has said its offer to the union includes a new electric pickup truck to be built in Michigan and a new battery facility in Ohio.

"You can't be paralyzed by the uncertainty," Kristin Dziczek of the Center for Automotive Research, tells Axios. "Businesses have to move forward, make bets on technology and plan their supply chain based on where they think trade policy will go."

The bottom line: Until the 2 sides can unite on a shared vision for at least the next 4 years, the strike against GM will continue.

2. Feds spend $60M for AV tests on public roads

A Ford Argo AI test vehicle being tested in downtown Detroit. Jeff Kowalsky/AFP/Getty Images

The U.S. Department of Transportation today announced nearly $60 million in federal grants to 8 automated driving projects in 7 states.

Why it matters: The projects will help communities gather significant safety data that will be shared with the agency to help shape future regulations on self-driving cars.

"The Department is awarding $60 million in grant funding to test the safe integration of automated vehicles into America's transportation system while ensuring that legitimate concerns about safety, security, and privacy are addressed."
— Transportation Secretary Elaine Chao

The funding program attracted more than 70 applicants, including cities, states and local transit authorities, universities and research centers.

Of note:

  • 3 projects, in Texas, Iowa and Ohio, will focus on rural applications of automated driving.
  • Virginia Tech received two grants, totaling $15 million.

Read the list of recipients here.

3. How the government could incentivize less driving

Illustration: Aïda Amer/Axios

The current U.S. Highway Code does not have a single performance measure that focuses on the reduction of greenhouse gases or vehicle miles traveled, but a new bill in Congress aims to establish a connection and incentivize reductions, Tiffany Chu writes for Axios Expert Voices.

Why it matters: Transportation contributes 28% of U.S. greenhouse gas emissions. Driving represents 83% of trips, and the number of miles driven is rising, posing a serious problem to curbing emissions.

What's happening: U.S. transportation funding typically prioritizes roadway expansion projects, which can reduce congestion, at least temporarily, and increase speeds.

  • But building and widening roads actually encourages more people to drive.
  • The Federal Highway Administration reports that vehicle miles traveled (VMT) is increasing: U.S. driving topped 1.58 trillion miles in the first half of 2018, 5.2 billion miles more than the same period the year prior.

What's needed: A federal GHG emissions reduction goal for the national transportation plan would help to reduce VMT.

  • Proposed projects on the federal, state and city levels would need to align with that goal to receive funding.
  • States and regional agencies could eventually be required to share a project's performance as it relates to VMT and emissions.

What to watch: The GREEN Streets Act, introduced in July, lists combating climate change among its goals.

  • Among other items, it would direct the Transportation secretary to establish minimum standards for states to reduce GHGs on the National Highway System.

Read more.

Tiffany Chu is the COO and a cofounder of Remix, which helps cities plan transportation networks, and a commissioner at the San Francisco Department of the Environment.

4. Driving the conversation


Texas-bound: Uber is bringing its self-driving cars to Dallas (Andrew J. Hawkins —The Verge)

  • Quick take: The cars in Dallas will be operated by human drivers to collect mapping data and driving scenarios it can feed into AV simulations. Uber is proceeding with extreme caution following a fatal accident involving one of its test AVs in 2018.

Funding deal: TuSimple adds another $120 million to its self-driving trucks war chest (Kirsten Korosec — TechCrunch)

  • The big picture: The company, which has operations in China, San Diego and Tuscon, has now raised $298 million to develop automated heavy duty trucks.

Durability: Scooter startup Skip raises more funding, talks strategy (Kia Kokalitcheva — Axios)

  • Why it matters: Skip is well behind its biggest rivals like Bird and Lime, but the company is betting on a newly designed scooter that is made of modules that can be quickly disassembled and reassembled to make repairs as fast as possible.
5. 1 noisy thing

Electric cars like the 2019 Nissan Leaf Plus are too quiet. Photo: Nissan

Federal auto safety officials may soon allow you to pick your car's ringtone.

Why it matters: Electric vehicles and hybrids are quiet, which means they can be dangerous to pedestrians, bicyclists and people with vision impairments. The National Highway Traffic Safety Administration requires carmakers to add alert sounds to their quiet models.

What's happening: This week, in response to automakers' requests, NHTSA said it will at least let consumers choose from a variety of sounds, Reuters reports.

  • Whether there's a limit on the number of compliant sounds is still open for discussion.

My thought bubble: I'm all for customization, but this sounds like a situation where there should be a standard sound so people know when a car is approaching and don't confuse it with other ambient sounds.

The bottom line: It will cost automakers about $40 million a year to add an external waterproof speaker to comply with the rule, but reduced injuries will save an estimated $250 million to $320 million annually.

Joann Muller