by Gabrielle DeSantis

Ford is looking at a huge penalty if it can’t continue its legal fight over import duties on Ford Transit Connect vans. An appeal by Ford to show it paid high duties on some imports plus interest was turned down by the Supreme Court. Now additional duties and a fine of up to $1.3 billion could be levied against Ford now. 

US Customs and Border Protection (CBP) wants $181 million in additional duties besides the penalty that ranges from $652 million to $1.3 billion. Ford says it would defend its actions and notes that if a penalty is issued it “would be based on our level of culpability as determined by the courts.” 

What is the Transit Connect penalty for?

This all revolves around the Ford Transit Connect vans, which are built in Turkey. When Ford imports the vans they are configured as passenger vans, which are levied a 2.5 percent tariff. They are not subject to the “chicken tax” because they are not commercial vehicles. Ford then converts them into cargo vans by blocking the rear windows and removing seats. This is known as “tariff engineering.”

The chicken tax goes back to the 1960s. Some European countries were placing a 25% tax on frozen chicken imported from the US. In retaliation, President Lyndon Johnson imposed a 25% tariff on potato starch, dextrin, brandy, and light commercial vehicles. Soon all of the tariffs but those imposed on light commercial vehicles were lifted. 

The so-called tariff engineering is how Ford sidesteps the commercial nature of the Transit Connect vans. But in 2013 the CBP ruled that the vans were still subject to the 25 percent chicken tax. The Justice Department is hip to the runaround by Ford.

The feds say Ford used tricks to get around the chicken tax on Transit Connect vans

It stated that Ford “designed, marketed, sold, and delivered the van to consumers exclusively as a two-person cargo van. But to avoid the higher rate of duty that applies to cargo vans as compared to vans principally designed for passenger transport, petitioner imported each Transit Connect … with a temporary, cheap rear seat that was designed to be immediately removed as soon as the van cleared” Customs.

Beyond that, the feds say that the seats do not employ the US mandated head restraints and “were upholstered with cost-reduced fabric that did not match that of the front seats.” Ford says the seats meet all federal safety standards and have seat belts, anchors for the seats, and meet all requirements for “street-legal passenger vehicles.”

Without the high court taking the case it looks like Ford has few options left. Now it is just a matter of how much the lower court wants to penalize Ford. And it also raises questions about what Ford will do about future Transit Connect imports. With the fine factored into the profits of Transit Connect vans it may not be a viable business plan anymore. 

RELATED: 2020 Ford Transit Connect Might Be the Best Family Wagon Ever

The post Ford Penalized $1.3 Billion Sidestepping Tariffs appeared first on MotorBiscuit.

by Gabrielle DeSantis

Tesla is having a rough go of it recently. At the end of May, Tesla recalled multiple years of both the Model 3 and Model Y electric vehicles. These recalls are related to two different seatbelt issues and loose brake bolts on various Tesla EVs. If you think these issues might impact your Tesla, keep reading to find out the specific details of all three voluntary recalls.

How do I know if my Tesla Model 3 or Model Y has been recalled?

The National Highway Traffic Safety Administration (NHTSA) issued a recall notice for the Tesla Model 3 and Model Y electric vehicles earlier concerning the seat belts. The NHTSA recall notice says that certain 2018-2020 models might not have the front seatbelt properly attached to the b-pillar. Owners should note that the recall is titled “Front Seat Belts Not Securely Attached To B-Pillar.”

The potential number of units affected was just over 5,500. If you think your vehicle might be impacted, you can call the NHTSA’s Vehicle Safety Hotline at 1-888-327-4236. Or you can check the NHTSA website with your Vehicle Identification Number and the campaign number 21V389000. Also, you can call Tesla at 1-877-798-3752. The Tesla recall code is SB-21-20-001.

In addition to this, there is a second recall related to loose brake caliper bolts on Model Y vehicles. This recall is called “Seat Belt Retractor Not Securely Attached.” The attached seat belt fasteners might prevent the seat belts from performing as intended. Due to this, there is an increased risk of injury. The recall impacted 2,166 vehicles. This recall impacts 2019-2021 Tesla Model Y vehicles. The NHTSA recall number is 21V388000. Tesla’s recall number for this specific notice is SB-21-20-002.

The third and final recall is titled “Loose Brake Caliper Bolts.” The loose bolts on the brakes could cause a loss of tire pressure, increasing the chance of a crash. This recall impacts 2019-2021 Tesla Model 3 vehicles and 2020-2021 Model Y cars. The NHTSA recall number is 21V387000. Tesla’s recall number for this specific notices is SB-21-33-002. The recall impacted 5,974 cars.

This also impacts Tesla Model 3 EVs imported to China

The recall impacts some 2019 Model 3 cars that Tesla shipped to China, CNBC says. The number is vehicles is smaller, with only about 700 units impacted. The recall for these vehicles covers both the seat belt recalls and the tire recall. Tesla noted it would contact owners to remedy the issue at a local dealership.

Tesla has had a factory in Shanghai since 2019. The factory started making and delivering its own Model 3 vehicles last year. It started delivering Model Y vehicles made in China just this year. Currently, the Model 3 is one of the best-selling electric vehicles in mainland China.

Why do companies issue voluntary recalls?

Companies will often issue voluntary recalls to prevent injuries. Since this is a relatively small amount of vehicles, the purpose is to fix the issue before it becomes a bigger issue. A voluntary recall is without the intervention of the government, according to the NHTSA.

“Most decisions to conduct a recall and remedy a safety defect are made voluntarily by manufacturers prior to any involvement by NHTSA. Through their own tests, inspection procedures, and information-gathering systems, manufacturers often discover that a safety defect exists or that the requirements of a Federal safety standard have not been met”

NHTSA

In conclusion, it is good for the electric vehicle company to get ahead of the issue. Above all, if Tesla can fix the seatbelts and tire bolts before any injuries happen, the voluntary recall worked.

RELATED: Tesla Model 3 Loses Consumer Reports, IIHS Top Pick Status

The post Recall Alert: Over 5,000 Tesla Model 3 and Model Y Cars Recalled appeared first on MotorBiscuit.