The auto industry has been barraged with one scandal after another in recent years, just as new players are poised to enter the market. In the same week that Apple announced that it plans to ship its electric cars in 2019, Volkswagen AG is embroiled in an emissions scandal that may impact more than 11 million vehicles across the globe.
Auto Industry Stumbles
As has been widely reported in the media, the U.S. Environmental Protection Agency (EPA) has charged VW with violating the Clean Air Act by installing an emissions “defeat device” on several vehicle models. When installed, the device disengages the emissions control systems during normal driving. However, VW systems are programmed to come back online during lab testing in order to meet pollution standards.
Unlike its predecessors, VW is taking a proactive approach to the emission scandal by accepting liability and pursuing its own criminal complaint. However, the company will still take a significant financial and public relations hit. In fact, the automaker is expected to face fines of more than $18 billion, in addition to any damages resulting from private litigation.
In the wake of its own scandal, General Motors recently agreed to pay $900 million to resolve criminal charges related to its failure to recall defective ignition switches that are now linked to more than 100 deaths. The American auto manufacturer was already hit with a hefty civil fine from the National Highway Traffic Safety Administration.
High-Tech Threats in Vehicles
From automatic braking to lane departure warnings to voice-controlled navigation, technology plays an increasingly important role in today’s vehicles. Given Apple’s proven track record of entering new markets and quickly raising the bar, the established automakers have reason to be concerned. Google, Tesla, and other high-tech companies also pose threats, as they continue to fine-tune on their electric and self-driving vehicles.
Of course, not everyone is convinced that Tim Cook and company can make the leap into the auto industry. “When it comes to actually making cars, there is no reason to assume that Apple, with no experience, will suddenly do a better job than General Motors, Ford, Volkswagen, Toyota, or Hyundai,” Bob Lutz, the former chairman of General Motors, told CNBC. “So I think this is going to be a giant money pit.”
Over the next several years, the auto industry is poised for a significant shift, as electronic and other high-tech vehicles look to become the norm rather than the exception. It will be interesting to see if the traditional automakers can put their scandals behind them and keep pace with the tech companies.
Understanding Chattel Paper: A Key Component in Secured Transactions
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
