U.S. Justice Department issues subpoenas to automakers in California emissions probe

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WASHINGTON (Reuters) – The U.S. Justice Department has issued civil subpoenas to four major automakers, demanding that they disclose details on a deal struck with California in July to follow strict vehicle emissions standards, a source briefed on the matter said on Thursday.

FILE PHOTO: Ford logo is pictured at the 2019 Frankfurt Motor Show (IAA) in Frankfurt, Germany September 10, 2019. REUTERS/Wolfgang Rattay

The Justice Department is carrying out an antitrust investigation into the voluntary agreement. It comes against a growing number of fights between the Republican White House and California on a number of fronts, including numerous environmental issues.

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The Trump administration in September issued a determination that California cannot set its own vehicle emission standards and zero-emission vehicle mandates and is investigating if the companies engaged in anti-competitive conduct in striking the deal.

The Justice Department has issued civil investigative demands to Ford Motor Co, Honda Motor Co, BMW AG, and Volkswagen AG (VOWG_p.DE), the source said. The Wall Street Journal reported the subpoenas earlier.

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The subpoenas ask for details of how the agreements were reached and if the automakers engaged in improper conduct, the person said.

The Justice Department declined to comment. The department has previously said that in August it sent the four automakers letters, without giving details.

A BMW spokesman confirmed on Thursday it had received a subpoena.

Ford and Volkswagen declined to comment, while Honda said it “will continue to work cooperatively with the Department of Justice with regard to the emissions framework reached between the State of California and various automotive manufacturers.”

The subpoenas follow separate Justice Department meetings with the four automakers in October.

In September, two Democratic lawmakers asked the White House to turn over documents that would show if President Donald Trump interfered or directed the antitrust probe, saying that it appeared to be “another example of the administration’s weaponization of the antitrust laws to target perceived political adversaries of the president.”

Makan Delrahim, who heads the antitrust division, said in September he was not conducting the investigation for “political reasons.”

Last month, other major automakers – including General Motors Co, Toyota Motor Corp, and Fiat Chrysler Automobiles NV – backed the Trump administration in its efforts to bar California from setting tailpipe emissions standards.

Those automakers are backing Trump in two lawsuits brought by California and 22 other states and environmental groups, which seek to reverse the administration’s determination that California cannot set its own vehicle emissions rules. Those rules are followed by more than a dozen U.S. states.

The automakers’ decision to side with Trump brought thanks from the president and prompted a furious backlash from Democrats and environmentalists.

In August 2018, the administration proposed freezing fuel efficiency requirements at 2020 levels through 2026, which would result in an average fuel efficiency of 37 miles per gallon by 2026, compared with 46.7 mpg under the Obama era rules.

The Trump administration’s final requirements are expected to modestly boost fuel efficiency versus the initial proposal, with several automakers anticipating annual increases of about 1.5%, but are much less stringent than the Obama rules.

Reporting by David Shepardson; additional reporting by Joseph White in Detroit; editing by Chris Reese and Rosalba O’Brien

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