GM, Fiat Chrysler and Toyota Should Reconsider Emissions: Activists

GM, Fiat Chrysler and Toyota Should Reconsider Emissions: Activists
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Investors urge GM, Fiat Chrysler and Toyota to reconsider their opposition to CA’s waiver authority on auto emission standards

Investor letter argues the companies are actively opposing standards that are good for business, shareholders, consumers, and the environment.

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NEW YORK, NY, FRIDAY, NOVEMBER 22, 2019 – In a letter sent this week to automakers Fiat Chrysler Automobiles ($FCAU), General Motors ($GM), and Toyota North America ($TM), investor members of the Interfaith Center on Corporate Responsibility urged the companies not to intervene on behalf of the Administration in its effort to revoke California’s waiver authority on auto emissions standards.

In 2009, the EPA granted California a waiver of Clean Air Act preemption for its greenhouse gas emission standards for motor vehicles, giving it special authority to enact more rigorous air pollution standards to regulate fuel economy for motor vehicles than those set by the federal government. California’s waiver authority has the potential to eliminate billions of tons of carbon dioxide pollution caused by vehicle emissions, and is an important element in moving the U.S. economy towards mitigating the worst impacts of climate change.

GM, Fiat Chrysler and Toyota - Emissions Dispute

Fifteen other states follow California’s tighter standards, and together, they represent roughly a third of the U.S. auto market.

In July of 2019, Ford Motor Company ($F), Volkswagen Group of America, Inc. ($VLKAY), BMW of North America, LLC ($BMWYY) and American Honda Co. Inc. ($HMC) signed a memorandum in support of California’s waiver authority. The memorandum signals a commitment to delivering cleaner vehicles across the nation that will provide clear benefits for customers and the environment.

However, in September of 2019, the EPA announced its intention to revoke California’s waiver. Shortly thereafter, California and nearly 2 dozen states filed a lawsuit targeting a NHTSA ruling which would have barred the state from setting tailpipe emission standards.

On October 29, GM, Toyota, FCA, and several other auto companies broke ranks with their peers, and intervened on behalf of the Administration in the lawsuit. In response, California announced earlier this week it would halt all purchases of new vehicles for state government fleets from the three companies and any other automakers that intervened in the suit. And in early November, an additional 22 states filed lawsuits seeking to block the Administration from revoking California’s waiver.

“Shareholders are concerned to see GM, Fiat Chrysler and Toyota breaking from their peers to support the Administration’s inexplicable roll-back of vital fuel economy standards,” said Danielle Fugere, President and Chief Counsel of As You Sow. “Investors are increasingly aware that climate change is incompatible with a thriving society. The fact that GM, Fiat Chrysler and Toyota would so publicly stand behind actions that will increase the climate emergency should be of utmost concern to all stakeholders.”

Emissions and climate change

 “As faith- and values-based investors, we have long advocated for stricter corporate average fuel economy (CAFE) standards to curb the worst impacts of climate change,” said Sr. Patricia Daly, OP, Representative for the Dominican Sisters of Caldwell, NJ.  “We want to commend Ford, Volkswagen, BMW and Honda for their support of common sense, climate-forward regulations. In contrast, the actions of Toyota, Fiat Chrysler and General Motors jeopardize the long-term viability of the automotive sector, not to mention the health of both people and planet.”

ICCR members have held long-term and productive engagements with multiple auto companies on their fuel efficiency and greenhouse gas emissions. In their letter to GM, Fiat and Toyota, they highlight the strong example set by Ford, Volkswagen, BMW and Honda and call on them to join their peers in constructive advocacy to reduce emissions for the good of the industry.

“Strong standards will strengthen the global competitiveness of U.S. automakers, their suppliers, and the many small businesses that support the industry,” said Steven Heim of Boston Common Asset Management. Moreover, there is clear consumer demand as nearly 90 percent of consumers support improving fuel economy for all vehicles, and nearly 75 percent of consumers support stricter federal fuel economy regulations. We are hopeful FCA, GM and Toyota will reconsider and choose to support California in its effort to accelerate progress on auto emissions and not undermine their own corporate climate commitments.”

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Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at) - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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