It's hard to believe, but cab drivers in New York City are prohibited by law from talking on cell phones, with or without headsets. That doesn't seem to stop them, says the city's Taxi and Limousine Commission. Citing phone-related accident statistics, the commission is now proposing more stringent rules that would raise fines and even keep cabbies from using hands-free devices to chat. "We've tried everything else; there's no other way we can make this work," says Matthew W. Daus, the taxi commissioner.
In the first six months of 2009, only one ticket was issued for every 500,000 cab rides. Cabbies escape prosecution because they claim they were only wearing the hands-free devices, not using them. "Judges have been dismissing summonses because there's no proof of conversation," says Daus. Under the proposed rules, the wearing of a headset merits an infraction. Under the current rules, cab drivers are allowed to talk on cell phones while stopped at a red light. The new rules would require drivers to pull over to answer the phone.
Without a doubt, the cabbies are riled. Calling the proposed rules inhumane, they claim mobile phones are crucial in emergencies and the only way they are able to keep in touch with relatives during their 12-hour shifts. While the drafted rules are subject to public hearings next month, the drivers point out the absurdity of some of the proposals. When one organizer at the New York Taxi Workers Alliance was told that he'd have to pull over to answer a ringing phone, his amusing answer was rather succinct: "Where do you get space to put your car?"
The aggrieved parties are: the United Steelworkers and the U.S. government on one side, Chinese tire companies and the Chinese government on the other. The issues are, as always, jobs and money. The Steelworkers brought a case against Chinese tire companies for dumping tires on the U.S. market over the past few years and in the process putting more than 5,000 people out of work and closing seven domestic tire factories. The case was ruled on by the U.S. International Trade Commission, which found in favor of the Steelworkers. In response, the current administration plastered a 35% tax on Chinese passenger car and light truck tires.
Naturally, the Chinese are miffed, to say the least. They feel the tariff is contrary to World Trade Organization rules and President Obama's rhetoric on current tariff levels, as well as being a tactic of undue protectionism. When China entered the WTO, the U.S. specifically negotiated the right to protect itself against a sudden wave of Chinese goods, and the ITC feels that China's share of the tire market having grown 14% in four years, with 31 million more tires entering, is just such an occasion.
Politics could be the decider in this one, however. China can complain to the WTO, attempt to impose its own countermeasures, or at the upcoming G-20 meeting it can simply whisper in Obama's ear, "You know that $1.56-trillion-and-counting deficit you guys need floated..." Nobody wins in the case of escalation, but we have a feeling the fight isn't yet finished.
Kruse International, the four-decade-old, Indiana-based auction house that's moved cars like Chitty Chitty Bang Bang, is having a rough time of it. According to the Journal Gazette, lawsuits and actions have been brought against it by states, buyers and sellers – just about every entity an auction business is involved with. It isn't the first time founder Dean Kruse and his company have been in trouble, and Kruse says it's been worse before.
That's probably the best consolation possible, short of being paid back, for the people in line waiting for money. Customers in Indiana alone who haven't been paid for cars they consigned to auction are suing for more than a half-million dollars. Arizona suspended Kruse's license to hold auctions in that state, American Express wants more than $100,000 for unpaid corporate credit card bills, and one bank wants to foreclose on Kruse Auction Park, the company's showcase location for its Labor Day auction where 5,000 cars can go in one weekend. In total, Kruse's legal issues in Indiana alone count for more than $16 million.
According to the JG, Kruse says much of the problem is the way he's worked with regular customers, who would win a car at auction and pay later. Now, he claims he's owed more than $6 million by buyers. He also says he wasn't prepared for the recession, but now he just needs to get some cash flow going and he feels good about doing that. And if he needs to, he still has high-dollar items he can sell like an Auto Union used by the Nazi High Command. It's a familiar business story over the past year, but until things gets addressed, it might be best to remain a buyer as far as Kruse goes – they're the only ones who don't seem to have any complaints.
Before there was a Motors Liquidation Co, post-bankruptcy GM's hived-off shelter for useless assets, there was Old Carco LLC. That's the company Chrysler built to house its useless assets, and unsurprisingly, it doesn't have good news for unsecured creditors. Old Carco was left with liabilities of $20.5 billion, but has less than half of that to pay off everyone it owes.
The latest accounting says there is $2.345 billion to pay things off. With a shortfall that drastic, even the U.S. Treasury and the Canadian governments are waiting for their money, with a $3.34 billion loan and $29 million in interest going not being repaid. The Treasury sent Old Carco a notice of default last month, which strikes us as a waste of a stamp and paper.
And since Old Carco isn't allowed to borrow any more money, there is almost no chance that creditors will be made whole. At this point, as the company tries to unload leftover factories and property, it looks like the best anyone's going to get is pennies on the dollar -- or just fractions of that -- and that could be for the folks first in line. Old Carco is dead, long live Chrysler...
File this under "No Cool, Wacky Deed Shall Go Unlitigated." John Schnatter, Papa John of Papa John's Pizza, put out a $250,000 A.P.B. to find his long lost 1971 12 Camaro Z28. According to the folks at Papa John, the person who won the money was the one whose name was on the title of the car – that is, the owner of the car was paid the dosh for selling the car back to Schnatter. Kentuckian Jeff Robinson came forth with the car and took home the cash.
The Papa John's folks say the rules never said anything about finder's fees. But when the Sloanes of Indiana helped point Schnatter to Robinson, Schnatter offered them $25,000 for the assist. How did the Sloanes know about the car? They had owned it previously and sold it to Robinson.
Now the Sloanes aren't happy about "only" getting $25,000. Billie Sloane wants more of that quarter million, and will sue Papa John if he doesn't pony up the cake. Her evidence is "advertisements and a press release that promised the money to whomever could 'reveal the car's whereabouts.'" Jeff Robinson chimes in, though, and says Sloane came to him and said the original owner would buy the car from him for $125,000, and says that she didn't mention the contest nor the full amount of the reward.
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China joined the World Trade Organization in 2001, at which point it was given five years to adjust to the rules of open trade before any complaints were lodged against it. On schedule, in 2006, the complaints began, lodged by the U.S., Europe, and Canada.
In one example of open trade prohibitive practices, Automotive News reports that if a car built in China uses a percentage of imported auto parts above a specific threshold, China taxes each imported part an additional 25%. In such a price-competitive atmosphere, such a policy all but proscribes the use of imported parts, a move that has lead to complaints from all three continents.
The original complaint was decided at the end of last year in a ruling against China. Beijing appealed, to no avail. In response, China has rescinded the tax, which is an initial step to truly opening the market up for foreign parts- and automakers. The U.S. trade in auto parts to China is not even 113th what it is to Mexico, a statistic that a host of companies would clearly like to change.
Repo men working in rural Alabama attempt to take a man's car at 2:30 am. The car's owner, 67-year-old Jimmy Tanks, hears noises and steps outside with his gun. Shots are fired and Jimmy ends up dead. The tables were turned on another repo man working in Alabama, who ended up dying of a gunshot wound. A third repo man, also in Alabama, was wounded by a gunshot while towing a vehicle away. With repossessions predicted to exceed 1.7 million vehicles this year, and the industry itself loosely regulated, violence during lawful repossessions is also predicted to rise. Only California, Florida and Louisiana license and keep track of "recovery agents," which leaves the rest to operate in a vacuum as far as limits are concerned. Federal law states only that they can't "breach the peace," but it's left to judge and jury to determine when that has happened. One Alabama sheriff wants the state legislature to limit the hours when repossessions can take place. "There's a time and place for everything," he said, "and 3 am is not it." The problem is getting the legislature to care enough about doing it – "they are just unfamiliar with that world." So that means more people are going to have to get hurt and even killed before something substantial happens.
Michigan is a state of contradictions. The authorities there are so worried about your focus on the road in front of you that it's illegal to hang anything on your rear-view mirror. Yet if you want to triple tow - that's pulling two trailers at one time, like an RV camper and a boat - you can do it after you pay $10 and take a 15-question test. And you just need to get 12 answers right. The only caveat worth mentioning is that the total length of the tow vehicle and two trailers can't exceed 65 feet. That's about the length of a semi-trailer combo, the differences being that a semi-trailer has only one articulated point and the folks who drive them need expensive specialized training and commercial driver's licenses.Incredibly, Michigan is not only not alone with this, it is not the most permissive: Wisconsin and other states allow 65-foot triple-towing combinations, South Dakota allows 75 feet, and Wyoming gives drivers a whopping 85-foot towable length. No wonder Wyoming is the state of The Bucking Horse and Rider...
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To be fair, the new president faces a lot of immediate challenges. But when it comes to the auto industry, the biggest four challenges could be the bridge loans, fuel economy mandates, the EPA vs The California 14, and the board of czars that will oversee the fortunes of GM and Chrysler. The similarity between these challenges and others on the domestic and global agenda: he doesn't have a lot of time to get them right. It was clear that the $17.4 billion granted to GM and Chrysler was just the beginning of a process needing a well thought out and long term endgame. Part of that endgame involved the two automakers coming up with viability plans, which are due on February 17. Then Congress and the president will need to decide, based on those plans, whether the car companies should receive more money.
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