Good Timing...

Last September, I posted Environmental law and timing..., in which I discussed a Supreme Court case involving the regulation of greenhouse gases by the Environmental Protection Agency (EPA).

The Plaintiffs - including a number of environmental groups, 18 states, and two of the biggest power generators in the United States (Entergy and Calpine) - argue that the EPA should be regulating greenhouse gases like carbon dioxide. (Entergy and Calpine are arguing FOR regulation for both environmental (secondary) and market certainty (primary) reasons. They're in the process of building the next generation of power plants, and are seeking to have certainty in the regulatory environment.) The Bush administration EPA disagrees, and argues that lawmakers did not intend the Clean Air Act to include regulation of greenhouse gasses.

The question of my original post was whether the merits of the case would be more impacted by timing, rather than the actual plain language of the Clean Air Act:

My question about this case is relatively simple - is the future of the EPA's regulation of greenhouse gases contingent upon the timing of this lawsuit? What I mean by that is it appears to me that the current configuration of the Supreme Court is not going to be very friendly to the Plaintiffs here. The Court (driven by Justice Scalia) has tended to limit the EPA's regulation of areas (specifically waterways) that the EPA WANTED to regulate - why would they be open to forcing to the EPA to regulate in an area it (at least this current political configuration of the EPA) doesn't want to?

As it turns out, as is all to common, I was wrong.

Warming ruling squeezes Bush from both sides

Justices Say E.P.A. Has Power to Act on Harmful Gases

The Supreme Court ordered the Environmental Protection Agency on Monday to explain why it has refused to regulate greenhouse gas pollution from cars, putting the Bush administration under pressure from an unusual coalition of environmental groups and leaders of the auto industry to move quickly on global warming.

In a 5-to-4 decision, the court rejected the administration’s argument that it had no legal authority to limit carbon dioxide released from new cars. In a ruling described as a landmark victory for environmental activists, it decided that the EPA does have such authority and that it must give better reasons for not using it than the “laundry list” of “impermissible considerations” it has offered until now.

The court ruled that the plain language of the Clean Air Act allows the EPA to regulate carbon dioxide as a pollutant greenhouse gas.

In essence, the court handed the administration power it insisted it did not have and did not want. And the administration came under immediate pressure to use that power from an unlikely source as the nation’s biggest automakers joined the chorus of environmental groups and climate scientists calling for the EPA to get moving on greenhouse gases.

For the automakers [represented by an industry trade group representing General Motors Corp., Ford Motor Co., DaimlerChrysler AG, Toyota Motor Corp. and five others], the ruling means a shift in tactics. With the Bush administration having lost the argument that it could not regulate carbon dioxide emissions, automakers now hope that the EPA will enact an industrywide standard before the states enact a patchwork of differing regulations or before the Democratic-controlled Congress can revise the Clean Air Act to include even stronger restrictions.
...
The Bush administration had argued all along that Congress never gave it the power to decide whether carbon dioxide was a pollutant as defined in the federal Clean Air Act, but in an opinion written by Justice John Paul Stevens, the court said it did have such authority.

More important, Stevens sided in unusually strong language with scientists who say that U.S. car emissions do contribute to greenhouse gases, leading to global warming. In doing so, he rebutted the contention of some energy industry officials and Republicans in the administration and Congress that there is no proof of global warming.

Interesting - the timing was much better than I thought...

Prior post: Environmental law and timing...

What's Good for Who?!? is Good for America?...

About a year an a half ago, I posted about General Motors, and health care costs here: GM pushing Union on healthcare cuts...

In that post, I commented that cutting union health care benefits is not a valid long term strategy, and quoted Prof. Katherine Stone (UCLA Law):

Efforts to shift costs onto employees or cut back on health benefit coverage has meet with intense opposition. The alternative is to shift the cost to the government. General Motors' competitors in Germany, Japan, and the United Kingdom all have national health systems to pay for their workers' health care needs. Fair trade requires a fair playing field, and so we need to level our field upward if we want to compete. The lesson of the General Motors' impending doom is that national health insurance is not some socialist pipedream but good policy for American business. After all, as General Motors Chairman Charlie Wilson told the U.S. Senate in 1955, "What is good for General Motors is good for America."

But, after all, it is a new age. Maybe the up-to-date version of the classic quote above would be: "What is good for Wal-Mart is good for America."

Well, either way you say it, both point in the same, new direction:

Healthcare Reform Calls Get Louder

An unusual new coalition of big employers, labor unions and politicians united Wednesday to push for "quality, affordable" healthcare for all Americans by 2012.
The proposal adds to growing pressure on Congress, President Bush and statehouses across America where governors including California's Arnold Schwarzenegger are calling for a major overhaul of health insurance coverage.
The idea united some bitter adversaries Wednesday and indicates that there is business support for change.
Wal-Mart Stores Inc., the nation's largest private employer, joined with one of its biggest critics, the Service Employees International Union.
AT&T Inc. signed on along with its major union. Silicon Valley is represented by chip maker Intel Corp. So are both major political parties.
"The fact they even got to the same table to talk about this in the first place is pretty amazing," said Helen Darling, president of the National Business Group on Health, a national nonprofit organization that represents large concerns such as Exxon Mobil Corp., IBM Corp. and Procter & Gamble Co.
The proposal was short of specifics but had four broad themes: universal health coverage by 2012, better preventive care and disease management; more efficient healthcare delivery, and cost-sharing by workers, employers and governments.
The initiative, dubbed Better Health Care Together, also guarantees that healthcare will take on an even larger role in the 2008 presidential campaign.

How about that - acknowledgement that universal health care would be a competitive advantage to our American businesses. This merely confirms what many of us have thought for years and years - that a healthy (physically, emotionally, and financially) America is a better America.

Maybe this time the folks in Washington will actually listen - since the voices of big business are joining the voices of the average citizens in calling for health care reform.

GM signs of life...

Can losing over one hundred million dollars in three months ever be considered a good thing? Maybe, just maybe - if we're talking about a US auto manufacturer.

The Houston Chronicle reports this morning - GM posts $115 million loss for third quarter.

Sure, $115 million is a lot of money to lose - but in compared to a year ago...or the $5.8 billion loss that Ford just announced...it actually looks pretty good.

GM's July-September loss of 20 cents per share was far better than the same period last year when the nation's largest automaker lost $1.7 billion, or $2.94 per share.

The company said that excluding goodwill impairment at its finance arm and charges associated with the reorganization at Delphi Corp., its former parts division, it made a profit of 93 cents per share.

It looks as if operations actually turned a profit. This could be a good sign for an ailing giant.


Not such good news at Chysler, a former US auto major, and not component of DaimlerChrysler. Altough the parent company posted a profit, the Chrysler division lost a boatload - Chrysler Announces $1.5 Billion Loss.

Executives at DaimlerChrysler said today that they were working on a plan to return Chrysler to profitability after a loss of nearly $1.5 billion in the third quarter.

But they would not rule out the possibility that Chrysler could be spun off or sold, breaking up the eight-year alliance between the German and American auto companies.
...
Chrysler blamed its loss, signaled a few weeks ago, on slumping sales of a product line that depends heavily on sport utility vehicles and pickup trucks, and on the deeper discounts it has been obliged to offer consumers.

Last week, Chrysler said that it was striving to cut its manufacturing and marketing costs by $1,000 a car, under a plan called Project Refocus, the second extensive restructuring effort at the company in six years.
...
Until today, Mr. Zetsche [CEO of DaimlerChrysler] and other executives always insisted that Chrysler had a safe place in the DaimlerChrysler fold. But when the parent company’s chief financial officer, Bodo Uebber,was asked repeatedly today about Chrysler’s prospects during a conference call with analysts and journalists, he gave cryptic, noncommittal answers.

But over at Ford, it also looks as if asset divesture is in the works - Ford’s Dismal Results Renew Speculation on Asset Sales.

“Ford can do two things: borrow more money and sell assets” to buy time until their operations problems are fixed, John Casesa, a longtime auto industry analyst, told The New York Times.

Ford already has put a British maker of luxury cars, Aston Martin, up for sale. The chief financial officer, Don Leclair, said Ford is preparing a short list of bidders, but does not expect to close a sale before the end of the year. ...

Mr. Mulally confirmed that Ford is open to reviewing its other luxury brands — leaving the door open to a potential sale of Jaguar, Volvo or Land Rover. “I really think it’s going to hinge on how the businesses are doing and can we make profitable growth businesses out of them with the action we have taken and additional actions that might be required,” he said in a conference call.

But as it is noted above - this is only buying time, it's not a long term plan. New CEO Alan Mulallay noted after the poor results released on Monday that Ford would not start seeing the results from their turnaround plan until the end of 2007.

Indeed, the new chief executive at Ford, Alan R. Mulally, a former Boeing executive, said the automaker would require a full transformation in the way it thought about consumers and approached the American market.

The typical Detroit turnaround, based on plant closings and introducing a few hit vehicles but with little change in attitude, will not be enough to see Ford through, Mr. Mulally said ...

Related prior posts:
Ford takes a beating...
Black October for US Auto...
More Shakeups in US Auto...
Toyota chief fears GM, Ford demise...
GM pushing Union on Healthcare cuts...
The China Syndrome...

Ford takes a beating...

Ford Reports Loss of $5.8 Billion in 3rd Quarter

Just a terribly ugly quarter for the US' second largest auto maker. New CEO Alan R. Mulally put it bluntly, saying, "Let me make it clear — these results are unacceptable." And the current turn-around plan doesn't look to pay any benefits soon:

“Without giving any specific guidance, the profits will be worse in the fourth quarter than in the third,” Mr. Leclair said, later clarifying that he was referring to operating income. Several minutes after he made that remark, Ford’s stock, which had been trading a few cents above last week’s close, fell sharply.

Early this afternoon, Ford’s shares were trading down 14 cents, or 1.8 percent, to $7.87 on the New York Stock Exchange.

In the third quarter, Ford’s continuing operations lost $1.2 billion, or 62 cents a share, roughly what analysts had expected.

The losses in Ford’s North American operations were $800 million more than a year earlier. The company’s Premier Automotive Group, which includes the European brands Jaguar and Land Rover, lost $593 million, five and a half times more than last year.
Those numbers, while dismal, did not surprise analysts, who expected the company’s performance to be far worse than a year earlier, when it lost $284 million.

Things are just ugly for US Auto. GM recently turned down the opportunity to work with Carlos Ghosn - who has effectively turned around both Renault and Nissan. Now, Ghosn may begin to eye Ford a little closer.

Ford had been seen as a potential partner for Nissan and Renault, which spent the summer exploring an alliance with General Motors. After those talks ended abruptly earlier this month, Carlos Ghosn, the chief executive of both Nissan and Renault, said he was still interested in collaborating with a company in North America.

Related prior posts:
Black October for US Auto...
More Shakeups in US Auto...
GM pushing Union on Healthcare cuts...
The China Syndrome...