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Volkswagen U.S. Unit Destroyed Evidence, Ex-Worker Suit Says

Bloomberg

Personnel at Volkswagen AG’s U.S. unit in Michigan destroyed evidence after the U.S. announced last year that the company had installed illegal devices on hundreds of thousands of vehicles to cheat emissions tests, a former employee said in a lawsuit.

Daniel Donovan, who worked as a technical project manager in Auburn Hills, Michigan, said he was fired in December after telling superiors, including the company’s in-house lawyers, that data was being deleted. Donovan, who had worked for VW since 2008, sued in state court last week, alleging wrongful termination and violation of Michigan’s whistle-blower law.

The deletion of data conflicted with an order Donovan received to preserve such information after the Sept. 18 announcement by the Environmental Protection Agency that VW had violated federal law by rigging vehicles sold in the U.S., he said in the complaint.

The company admitted installing cheating software in 11 million vehicles worldwide, including 482,000 sold in the U.S. VW later disclosed it had installed questionable emissions software in about 85,000 VW, Audi and Porsche cars with 3.0-liter diesel engines in the U.S.

‘Stop Deleting’

Donovan’s immediate supervisor, Robert Arturi, told him on Sept. 18 the company had to “stop deleting data effective immediately pursuant to a Department of Justice hold,’’ connected to the U.S. investigation, he said in his complaint. When he relayed that message to the information technology manager, he was brushed off, Donovan said.

Data deletion continued for three more days, in violation of the order, and additional backup disks were destroyed afterward, Donovan said. An independent investigation by an accounting firm was thwarted, as evidence wasn’t provided, Donovan claimed in the suit. Sam Morgan, Donovan’s lawyer, declined to comment on the lawsuit.

“The circumstances of Mr. Donovan’s departure were unrelated to the diesel emissions issue,” Jeannine Ginivan, a VW spokeswoman, said by e-mail. “We believe his claim of wrongful termination is without merit.”

Michigan law permits legal action if an employee is fired in retaliation for refusing to break the law, according to the complaint. It also cites a state law protecting workers reporting or about to report a legal violation.

The lawsuit is Donovan v. Volkswagen Group of America Inc., 2016-151877-CD, Circuit Court, Oakland County, Michigan (Pontiac).

ICBC to appeal $400k ruling for malicious prosecution of refugee

CBC News

ICBC has filed notice of its intention to appeal a judge’s decision awarding $400k to a newly arrived refugee.

Earlier this month, a B.C. Supreme Court judge ordered the insurance corporation to compensate Danica Arsenovski for malicious prosecution. 

Arsenovski and her husband had recently come to Canada as refugees from the former Yugoslavia when they were struck by a car and injured while crossing an intersection in Burnaby in January 2000.

After the crash, Arsenovski gave a statement to ICBC through a translator because she did not speak much English.

The statement detailed the injuries she received and what she remembered about the crash, but did not specifically say whether Arsenovski herself had been struck by the car or whether she had fallen when her husband was struck and fell into her.

ICBC’s report later alleged Arsenovski had made a false statement, and she was later charged, though the charge was eventually stayed.

Strong words for ICBC

In her written decision Justice Susan Griffin said ICBC’s conduct was high handed and reprehensible.

She wrote in her decision that John Gould, the ICBC investigator in the case, wrote a misleading report to Crown, intending to dissuade civil claims against the insurance agency.

Griffin said the effects of the case have stayed with Arsenovski, to a point where she hasn’t even told anyone about the charge, even after it was lifted.

Griffin had harsh words for the Crown corporation and noted that one of the agency’s key purposes is to provide compensation to people who are involved in accidents.

“The corporation does not serve the residents of this province when it uses tactics of intimidation to discourage civil claims,” she wrote.

ICBC declined comment as the matter is before the courts.

The federal consumer agency is sounding warning bells about the growing debt Canadians are taking on through auto loans

The federal consumer agency is sounding warning bells about the growing debt Canadians are taking on through auto loans

BY BARBARA SHECTER, FINANCIAL POST

The federal consumer agency is sounding warning bells about the growing debt Canadians are taking on through auto loans.

Consumers have been taking advantage of stretched amortization periods in recent years to take on more debt without increasing their monthly payments, the Financial Consumer Agency of Canada revealed Tuesday in a research report tracking market trends.

But they are often buying more car than they can afford, paying much more interest, and, in some cases, going on to buy new cars before the original loans are fully repaid.

“In these circumstances, consumers put themselves in the position of having to roll the debt owing on the long-term loan into the loan for the purchase of the new vehicle, thereby potentially stepping onto an ‘auto-debt treadmill’,” the agency warned.

The FCAC conducted research in the summer and fall of last year in a targeted review that tapped the country’s biggest banks for information, as well as smaller lenders focused on the auto sector.

Particular attention was paid to the information consumers receive about the terms of their auto loans, and to issues with potential impact on consumers, such as “negative equity” and non-prime lending, the report said.

“Recent trends in extended-term car loans have raised several concerns,” said Lucie Tedesco, commissioner of the FCAC. “Consumers must carefully examine their needs and their financial situation to ensure they can repay their car loans without undue strain, and with a full appreciation of the total interest charges and value of the car throughout the loan period.”

The FCAC called the growth in long-term car loans “worrisome,” noting that the average new car loan last year had a term longer than 72 months, up from about 65 months in 2010.

In the same five years, the share of consumers trading vehicles with “negative equity” has risen by 50 per cent – up to 30 per cent of consumers in 2015 from 20 per cent in 2010.

“Although significantly more consumers are carrying negative equity when they break their existing auto loans, the average amount of negative equity carried by consumers who are underwater … has hovered around $6,700,” the report says.

Vehicles depreciate quickly, which means the negative equity peaks in the early years of a loan when the portion of each payment dedicated to interest tends to be larger. Holding the loan longer eventually moves the borrower into a “positive equity” position. That typically happens by the fourth year in a standard 60-month auto loan, but the longer loans leave many borrowers in negative equity positions into the fifth year and even well beyond it, the report says.

The FCAC is not the first to zero in on auto lending as an area of concern. Debt-ratings agency Moody’s Investors Service raised similar red flags in 2014.

In a report that fall, Moody’s noted that auto lending by banks had grown at a compounded annual rate of 20 per cent since 2007, “significantly outpacing” the growth of even red-hot mortgages, credit cards, and lines of credit. In seven years, vehicle loans had jumped to $64 billion from $16.2 billion.

The authors of the Moody’s report warned that with household debt already at record levels, the concerted push into auto lending – buoyed by low interest rates and longer amortization periods that reduced a buyer’s monthly payments — had exposed Canadian banks to the risks of soured loans and lower recovery rates in the event of a downturn.

“Since our report, both consumer debt levels and auto loans at Canadian banks have increased,” Jason Mercer, one of the authors of the Moody’s report, said Tuesday. “Today, Canadian consumers face increased uncertainty due to persistent low oil prices and potential housing overvaluations, so these risk remain as relevant as ever.”

The Financial Consumer Agency of Canada says consumer groups have also expressed concern, and it is responding by focusing oversight and education efforts on the auto loan market.

One step will be to ensure the indirect lending activities of federally regulated financial institutions, including auto loans, comply with federal legislative and regulatory requirements.

According to the FCAC report, long-term car loans – those of six years or more — constitute about 60 per cent of the car loan portfolios of Canada’s largest financial institutions.

The Agency is also collaborating with provincial and territorial governments to ensure that consumers receive the information they need when entering into a car loan.

Financial Post

Saskatchewan government won’t create special regulations for Uber

By CKOM

THE CANADIAN PRESS

SASKATOON _ The provincial government has told the City of Saskatoon that it won’t be creating special regulations for ride-sharing companies such as Uber.

The news was delivered to a meeting of the city’s transportation committee in a report from the city solicitor.

The committee heard from several representatives from Saskatoon’s taxi and limousine industries.

All were united in saying that Uber was a predatory business that undercuts their companies by shirking regulations.

Committee chairman Randy Donauer said he would support a reduction in the regulations for taxis alongside any move to allow Uber into Saskatoon.

In the meantime, Donauer reassured the industry members in the gallery that as it stands right now, the current taxi bylaw remains in force, meaning a potential Uber driver would have to pay for a traditional taxi licence in order to operate.

California-based Uber is an app-based business that allows people to request rides over their phones and sets them up with drivers in their personal vehicles. Getting an Uber ride is typically cheaper than taking a taxi.

In January, Edmonton became the first jurisdiction to legalize the new industry. Calgary city council also recently passed a bylaw which could start in April.

However, Uber officials suspended operations in Edmonton after the Alberta government announced it would not make insurance available to drivers until the summer.

In addition, the province is requiring ride-hailing drivers to get criminal record checks and have at least a Class 4 driver’s licence, which is a commercial licence.

canada-press

Technology Woes Continue to Drive Up Problems: J.D. Power Vehicle Dependability Study

Technology Woes Continue to Drive Up Problems: J.D. Power Vehicle Dependability Study

Problems with technology continue to affect vehicle reliability according to the J.D. Power 2016 U.S. Vehicle Dependability StudySM (VDS), released today. The number of problems with infotainment, navigation and in-vehicle communication systems—collectively known as audio, communication, entertainment and navigation or ACEN—has increased and now accounts for 20% of all customer-reported problems in the study. ACEN is now the most problematic area on most vehicles and is the cause of the industry’s 3% year-over-year decline in vehicle dependability.

“The increase in technology-related problems has two sources,” Renee Stephens, vice president of U.S. automotive at J.D. Power, noted. “Usability problems that customers reported during their first 90 days of ownership are still bothering them three years later in ever-higher numbers. At the same time, the penetration of these features has increased year over year.”

The problems most often reported by owners are Bluetooth pairing/connectivity and built-in voice recognition systems misinterpreting commands. Navigation system difficult to use and navigation system inaccurate are also among the 10 most frequently reported problems.

Building Trust in Technology
While automakers, suppliers and even the U.S. government are enthusiastically moving toward putting fully autonomous vehicles on the roads, consumers need to have confidence in the technologies currently in vehicles before they will be willing to take their hands off the wheel of self-driving cars.

“If you think about the technology problems from the study in the context of conversations around autonomous vehicles, the industry clearly has more work to do to secure the trust of consumers,” said Stephens. “Right now, if consumers can’t rely on their vehicle to connect to their smartphone, or have faith that their navigation system will route them to their destination, they’re certainly not yet ready to trust that autonomous technology will keep their vehicle out of the ditch.”

Expected reliability remains critical in today’s automotive market. More than 50% of owners cite expected reliability as one of the most influential reasons for choosing a specific make and model.1 At the same time, concerns about reliability have risen this year as a reason to avoid particular models.

“The decline in reliability coupled with a record number of vehicle recalls and safety-related complaints2 affect consumer confidence,” said Stephens. “Dependability has a direct impact on purchase decisions and brand loyalty.”

Among owners who experienced no problems with their vehicle, 55% purchased the same brand again. In contrast, only 41% of owners who experienced three or more problems with their vehicle stayed with the same brand for their next purchase. Additionally, only a third of owners who had to replace a component outside of normal wear items said they would definitely repurchase or lease the same brand again.

Highest-Ranked Nameplates and Models
Lexus ranks highest in vehicle dependability among all nameplates for a fifth consecutive year, with a score of 95 problems per 100 vehicles (PP100).

  • Porsche (97 PP100) follows Lexus in the rankings, moving up from fifth in 2015.
  • Following Porsche in the rankings are Buick (106 PP100), Toyota (113 PP100) and GMC (120 PP100).

General Motors Company receives eight segment awards and Toyota Motor Corporation six.

  • GM models receiving an award include the Buick Encore; Buick LaCrosse; Buick Verano; Chevrolet Camaro; Chevrolet Equinox; Chevrolet Malibu; Chevrolet Silverado HD; and GMC Yukon.
  • Toyota awardees include the Lexus ES; Lexus GS; Lexus GX; Toyota Prius v; Toyota Sienna; and Toyota Tundra.

Others models to receive segment awards are the Fiat 500; Honda Fit; Mercedes-Benz GLK-Class; MINI Cooper; MINI Coupe/Roadster; and Nissan Murano.

Key Study Findings

  • The overall industry average is 152 PP100 this year, compared with 147 PP100 last year.
  • Among owners who experienced a Bluetooth pairing/connectivity problem, 53% said the vehicle didn’t find/recognize their mobile phone/device.
  • Among owners who indicate having experienced a voice recognition problem, 67% say the problem was related to the system not recognizing/misinterpreting verbal commands.
  • The number of engine/transmission problems decreases to 24 PP100 in 2016 from 26 PP100 in 2015.
  • Seven of the top 10 problems are design-related. Design-related problems account for 39% of problems reported in the study (60 PP100), a 2-percentage-point increase from 2015.

The 2016 U.S. Vehicle Dependability Study is based on responses from 33,560 original owners of 2013 model-year vehicles after three years of ownership. The study was fielded from October through December 2015.

The study, now in its 27th year, examines problems experienced during the past 12 months by original owners of 2013 model-year vehicles. Overall dependability is determined by the number of problems experienced per 100 vehicles (PP100), with a lower score reflecting higher quality. The study covers 177 specific problem symptoms grouped into eight major vehicle categories.
Learn more about J.D. Power automotive studies at www.jdpower.com/cars/

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