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Saturday, September 7, 2019

Justice Department will investigate BMW, Ford, Honda, and Volkswagen

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The four automakers agreed with California for voluntary emissions regulations and the Justice Department wants to know if they violated conflicting laws.

California's vote was too much to counter collision and emission standards and any changes on fuel economy proposed by the Trump administration.

According to The Wall Street Journal, the Justice Department has launched an antitrust investigation into BMW, Ford, Honda, and Volkswagen regarding their agreement with the state of California to comply with voluntary emissions regulations. The agreement, announced in July, was seen as a direct retaliation of the Trump administration's plan to exempt fuel economy and emissions regulations from 2020 levels.

The Justice Department investigation seeks to find out whether the four standards violated federal retaliatory laws by agreeing to comply with the consent standards, four outside the rules proposed by the Trump administration. The newspaper cited sources close to the case, but Honda confirmed that the DOJ was indeed in contact with the automaker.

The company said in a statement, "Honda will work closely with the Department of Justice regarding recent emissions agreements between the state of California and several car manufacturers, including Honda."

A Ford statement said of the investigation: "We received a letter from the Department of Justice and Jeff Gilbert, sent in a tweet by an automotive industry journalist, will cooperate regarding any questions."

Ford did not immediately respond to our request for comment to confirm the statement. Similarly, the roadshow was unable to communicate with BMW in time. "We are in regular contact with US officials on a range of issues, but we do not comment on specific private communications that we may or may not receive," a Volkswagen representative said at the roadshow.

The four automakers and the California Air Resource Board sought to provide certainty despite future regulations introduced by the Trump administration. This week, a report states that the administration will try to restart the state's elimination process as part of the revised fuel economy and emissions regulations. Without it, California would not be able to establish its own greenhouse gas regulations. Set the stage for a bitter fight, the carmakers were caught in the crossfire.

CARB did not immediately respond to a request for comments on the current situation.

The Journal reports that the Justice Department is acting on its own without instructions from the White House on the matter, noting that each of the four vehicle drivers received a letter warning them to investigate. According to the report, the Department of Justice has not yet reached a conclusion. The relationship of DOJ concerns because the four vehicle manufacturers live with each other and do not compromise with regulators. Finally, it can be seen as an agreement not to compete with each other. Sources in the newspaper said staff at the Department of Justice are also concerned that such an agreement "artificially" limits the sale of cars and limits competition.

The agreement states that each automaker will improve fuel economy by about 50 miles per gallon by 2026, a slightly less aggressive target than current regulations established under the Obama administration. Until the Trump administration reveals official figures, automakers should ensure that cars return 54.5 mpg by 2025. The changes proposed by the Trump administration will see fuel economy and emission levels frozen at 2020 levels, with the goal of creating a national fuel economy standard. In the process, the impact on California regulations will be reduced.

An August report claimed that Mercedes-Benz and another major automaker were announcing their inclusion in the California Voluntary Treaty, but no other automaker was named in the preliminary investigation.