The Trump administration’s efforts to bend California to its will on a variety of fronts have been mixed at best. Last week, for example, a panel of judges from the 9th U.S. Circuit Court of Appeals affirmed yet again that federal funding to state law enforcement agencies couldn’t be linked to their assistance in deporting illegal immigrants. Judges have ruled for the state and against the federal government in cases involving other immigration issues and environmental policies.

But the White House can claim a substantial win on vehicle emissions. Last week, many of the largest automakers in the world sided with President Donald Trump in his view that it’s not good for the U.S. economy for the nation’s largest state to have tougher rules on vehicle emissions and miles per gallon than those set by the federal government.

General Motors, Toyota, Nissan, Mazda, Subaru, Hyundai, Kia and Fiat Chrysler are backing Trump’s attempt to end the waiver that California has had for more than 50 years allowing it to set tougher standards on emissions for vehicles sold in the state. Twelve other states – Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington – have adopted the Golden State’s rules.

The fight was triggered by the Trump administration’s decision to scrap rules set by President Barack Obama that required automakers to have their vehicles average 55 miles per gallon by 2025. This led California Gov. Gavin Newsom to reach out to automakers to seek their voluntary compliance with tougher standards, winning support in July from Ford, Honda, Volkswagen and BMW for a plan under which their fleets would average 50 miles per gallon by 2026 – weaker than what Obama wanted but much tougher than Trump’s rules, which would set 37 miles per gallon as the industry standard.

Newsom said then that he was “very confident” other automakers would accept California’s standards. Instead, the largest automakers in the U.S., Japan and South Korea have sided with Trump in filing arguments with the U.S. Court of Appeals for the District of Columbia, which is considering a lawsuit from California and 22 other states seeking to uphold the Obama administration’s fuel-efficiency rules.

The automakers and the National Automobile Dealers Association said that they needed “the certainty that states cannot interfere with federal fuel economy standards.”

Newsom, Brown decry Trump’s global warming skepticism

Obama, Newsom and most climate scientists see requiring higher gas mileage standards as the easiest way to reduce the greenhouse gas emissions that build up in the atmosphere and cause global warming. Vehicle emissions in recent years have passed power plant emissions as the single biggest generator of greenhouse gases.

Trump rejects the conventional wisdom about greenhouse gases. As the New York Times reported Saturday, he has “directed the Environmental Protection Agency to roll back nearly every federal policy designed to curb the heat-trapping fossil-fuel pollution that is the chief cause of global warming.”

In the report, Newsom told the Times that the state’s recent history of devastating wildfires was directly related to climate change.

“We’re waging war against the most destructive fires in our state’s history, and Trump is conducting a full-on assault against the antidote,” Newsom said.

Newsom’s predecessor, Jerry Brown, framed the issue even more dramatically in testimony to Congress last week.

“The seas are rising, diseases are spreading, fires are burning, hundreds of thousands of people are leaving their homes,” he said. “California is burning while the deniers fight the standards that can help us all. This is life-and-death stuff.”

California could be on the brink of one of its biggest corporate defections yet with the signs that McKesson Corp. – the pharmaceutical giant that is

Apple is the only California company that’s bigger than McKesson, which has 75,000-plus employees and had $198 billion in annual revenue last fiscal year.

McKesson saw its profile increase greatly in 2017 after a joint investigation by the Washington Post and CBS “60 Minutes” alleged that the company had played a central role in the national opioid epidemic by failing to report “suspicious orders involving millions of highly addictive painkillers.” Yet it’s long been considered one of the 10 biggest companies “you’ve never heard of” by the InvestorPlace website and other business trackers.

Firm sold San Francisco headquarters

Now, according to a connect-the-dots report by the San Francisco Business Times, its days in the Golden State may be numbered. McKesson officially denied it was looking to move. But the newspaper noted a number of seemingly linked developments:

• The remarks of an official with Irving Economic Development Partnership that hinted McKesson was considering an expansion of its already “major commitment” to Irving. McKesson’s $157 million regional headquarters opened in 2016 in the business-friendly suburb of Dallas that already has the headquarters of such corporate giants as ExxonMobil, Fluor Corp and Kimberly-Clark. The state of Texas provided $9.75 million in subsidies to encourage McKesson’s decision.
• The announcement that CEO John Hammergren will retire on March 31, 2019, and be succeeded by McKesson executive Brian Tyler, who lives in Las Colinas, a posh Irving neighborhood. His possible relocation was not directly addressed.
• McKesson’s 2017 decision to sell its San Francisco headquarters for more than $300 million in favor of an arrangement in which it leased offices at the facility.

Given how much cheaper it usually is for a company to own rather than lease a large headquarters, the sale looks in retrospect like a warning sign to city leaders that their richest company was preparing to move.

McKesson would be hardest hit by new ‘homeless tax’

Nonetheless, besides Mayor London Breed, the city’s political establishment offered relatively little pushback to a successful tax measure on San Francisco’s Nov. 6 ballot that will take its single biggest toll on McKesson – at least if the company stays in the city.

To fund increased programs for the homeless, Measure C imposes a gross receipts tax on San Francisco-based companies which have $50 million or more in annual revenue. With $198 billion in fiscal 2017, McKesson is by far the highest-grossing San Francisco-based firm. Measure C is expected to generate $300 million a year, boosting the $380 million that City Hall now spends on homelessness.

If McKesson does leave, it will join the more than 1,700 companies whose decisions to abandon the Golden State have been documented since 2008. The traditional corporate complaints about California having high taxes and heavy regulations have been expanded in recent years to include concerns about the high cost of housing making it difficult to attract and retain workers.

Among the most prominent departures: Toyota moved its U.S. headquarters from Torrance to the Dallas suburb of Plano; energy giant Occidental Petroleum moved its headquarters from Los Angeles to Houston; and the Nestle USA food conglomerate moved its headquarters from Glendale to Rosslyn, Virginia, in the Washington suburbs.

Nearly $7 million in federal financial support is headed to five California developers working on hydrogen fuel cells, which emit only water vapor as a byproduct. Foremost among the recipients are Ardica, in San Francisco; HRL Laboratories, in Malibu; Lawrence Livermore National Laboratory, in the East Bay; Materia, in Pasadena; and the Livermore branch of Sandia National Laboratories.

In a press release, the DOE calls the fuel cell effort “critical to the widespread commercialization of hydrogen and fuel cell technologies.” 

Hydrogen technology remains limited in its applications to automobiles, as a result of its weight, size, cost and range constraints. Nevertheless, hydrogen fuel cells are back in vogue after being eclipsed by the trend in favor of electric vehicles. 

In general, the market challenges facing electric cars are even more substantial than those surrounding fuel-cell vehicles. That’s the case even though electric cars have been on the market for more than a century. Multiple auto manufacturers have labored to broaden their appeal. Government funds have been used to incentive their use.

But whereas experts recently estimated 5 to 10 percent of the market would be penetrated by electric vehicles worldwide, today optimistic estimates don’t exceed 1 percent, according to an investors’ report by Morgan Stanley Research cited by the Los Angeles Times.

No easy solutions

As supporters and critics of electric cars both know, the vehicles suffer from a short range augmented only by repeated fuel-ups at relatively rare recharge stations. Perhaps even more important, electric vehicles have failed to meet the performance and aesthetic expectations of most American consumers. Although sales are rising, they’re still so low that manufacturers and dealerships are cooling to the cars. Time magazine reports that a combination of high production costs and relatively low gasoline costs are souring analysts, dealers and customers on electric vehicles.

For automakers, that raises the stakes when it comes to hydrogen cells. Toyota, for instance, is staking a fuel-cell push on California’s so-called hydrogen highway — an undertaking began under then-Governor Arnold Schwarzenegger that’s on track to cost the Golden State some $150 million.

Toyota’s turn to hydrogen is part of a swift pivot away from electric. Its partnership with Tesla is being brought to an end, thanks to paltry consumer interest in an electric RAV4 model. There’s just one problem: the infrastructure for fuel cell cars is only part of the equation for hydrogen success. The other part is the hydrogen itself.

Pure hydrogen, it turns out, is hard to come by. “Despite being the most common element in the universe,” observes one report, “pure hydrogen is not particularly easy to come by on Earth. The most common method of producing hydrogen involves stripping it off hydrocarbons like methane and gasoline through a process called steam reforming. That doesn’t do much to reduce our dependence on fossil fuels, but other methods like bioreactors and water electrolysis are far from efficient enough for industrial scale production.”

A regulatory push

For alternative-energy skeptics, there’s a certain irony in environmental regulations pushing automakers toward a solution that keeps American drivers fossil-fuel reliant. As PBS reports, solar or wind power could theoretically be used to produce hydrogen for fuel cells — but that’s not part of current technology.

It’s all enough to leave some asking why automakers would even bother. After all, environmentalists who favor electric vehicles are criticizing Toyota, Hyundai and others for working on hydrogen fuel cells at all. “Many of them even call the new technology a waste of time, requiring a whole new network of expensive fueling stations,” according to the San Francisco Chronicle. “Fuel-cell cars, as a result, will jump into the market without a safety net.”

Car manufacturers are jumping in large part because they’re being pushed by state and federal initiatives. Along with seven partner states, California has pledged to ensure that 3.3 million electric or fuel cell vehicles are in use by 2025. That’s a stretch, not least because 15 percent of those cars are intended to be zero-emissions vehicles, and not just hybrids.

“Many drivers may have confused the gas and brake pedals a problem that may account for ‘the vast majority’ of the unintended acceleration incidents the agency investigated, NHTSA deputy administrator Ron Medford said at Tuesday’s NHTSA press briefing.

“‘What mostly happened was pedal misapplication where the driver stepped on the gas instead of the brake or in addition to the brake,’ Medford said.”

What quickly pointed to the likelihood that there was no real scandal? As I’ve noted before, here are the ages of the drivers involved in the incidents that led to major media coverage: 60, 61, 63, 68, 71, 72, 72, 77, 79, 83, 85, 89.

“I am really angry. Nothing prepared any of us for this surprise announcement by Toyota. The fact is thousands of families in our community are directly impacted by this decision – families who depend on Toyota for their livelihoods. I’ve spent this morning acquiring as much information as I can and am preparing my office to do everything it can to help these families and friends during this difficult transition for our community.” 

Yet given that almost every week brings news of a major company — Occidental, Raytheon, Trend Micro — leaving for Texas, who really can be surprised? I sure wasn’t.

And Lieu himself bears some of the blame for California’s horrible business climate. Let’s just look at some recent news releases right on his website after his Toyota outrage missive:

“SACRAMENTO –  Sen. Ted Lieu today joined Assemblymember Al Muratsuchi, Stop Hermosa Beach Oil and Heal the Bay at the Hermosa Beach Pier to announce legislation designed to assist the City if voters uphold the ban on oil drilling.”

Granted, the ocean view is nicer without oil derricks popping up. But if you want a car company, don’t you also need oil for the cars?

“SACRAMENTO – State Sen. Ted Lieu of Torrance has been given an 89-percent score by the California Environmental Justice Alliance, a rating that was not exceeded by any other lawmaker in the 120-member Legislature, for key votes cast on nine bills during the 2013 session of the Legislature.” 

I checked the scorecard. One bill that garnered Lieu a high score was AB 1165. According to the Alliance, it “Would have required an employer that is cited for a ‘serious,’ ‘willful,’ or ‘repeat’ violation of employee safety rules to abate the hazard identified by the citation, even if the employer appeals the citation.”

That is, even if you were not guilty of the violation, and were appealing it, you still had to “abate” the non-hazard!

AB 1165 was so radical that Gov. Jerry Brown, no slouch on environmental matters, vetoed it. He wrote in his veto message:

“Unfortunately, this measure would require the creation of a separate hearing process at the Division of Occupational Safety and Health — duplicating an expedited Cal/OSHA Appeals Board process which was recently adopted.”

Of course, a future Gov. Gavin Newsom or Gov. Kamala  Harris might sign a similar bill.

No wonder Toyota left. The only “surprise” was that they didn’t leave sooner.

Meanwhile, in Texas, they’re chortling — mildly, not meanly — at our expense. This is from a Dallas Morning News editorial:

“Any way you slice it, Toyota’s decision to consolidate operations in North Texas is a huge coup. …

“Plano Mayor Harry LaRosiliere attributes the behind-the-scenes legwork securing the deal to Gov. Rick Perry, Lt. Gov. David Dewhurst, Texas House Speaker Joe Straus and the Dallas Regional Chamber, all of whom promoted North Texas’ economic strength, available land and lower cost of living. No doubt also playing significant roles were the closing power of $40 million from the Texas Enterprise Fund, other yet-to-be-specified incentives from Plano and the northern suburb’s strong school system.

“Some might not be comfortable with the idea of states wooing companies with wayward eyes from other states. But that is the way the game is played these days. States compete to attract and retain companies; those slow off the mark stand to lose major development opportunities.”

Toyota considered moving to Colorado

The DMN coverage also provided important context: Toyota didn’t just want out of California so it could be close to its manufacturing facilities in the South. This is one of the points brought up those who say this as no big deal. Toyota was also considering … Colorado! Not exactly home to a lot people who say “y’all.”

“Toyota wanted out of California for many reasons: high taxes, steep operations costs and unpredictable state politics. The automaker reportedly had kicked the tires on several locations in Texas as well as in Denver, Atlanta and Charlotte, N.C. And Toyota’s not the only one racing for the exits. In recent years, more than 250 companies have bolted from California, and relocation experts in that state say Texas was their No. 1 destination.

“’When you look at the whole package, it’s difficult to be a business here,’ said Torrance Mayor Frank Scotto, whose city is the big job loser in Toyota’s move to North Texas. …

“As companies leave California, many are finding new homes in Texas. Here are some of the latest announced moves:

” • Occidental Petroleum Corp. moving a portion of its operation from Los Angeles to Houston.

” • Raytheon Co. transferring its space and airborne systems unit to McKinney from Southern California.

” • Trend Micro Inc., a Tokyo-based security software company, moving its U.S. headquarters from the Silicon Valley to Irving.”

They won’t be the last. As I wrote in the U-T San Diego, it’s a metaphysical certainly that more big companies will leave a state that is indifferent to their presence for states that actually believe it is a good thing to help the private sector.

The plant now makes Teslas, a car that wouldn’t exist without massive government subsidies and credits. It’s the only car plant left in California. It’as basically a high-tech Trabi.

On the Toyota move, the L.A. Times reported about Occidental Petroleum and other companies fleeing California:

Like these other companies, Toyota could also save money in an environment of lower business taxes, real estate prices and cost of living.

Frank Scotto, Torrance’s mayor, said he had no warning of Toyota’s decision. He said he did know that the automaker planned a corporate announcement for Monday.

“When any major corporation is courted by another state, it’s very difficult to combat that,” Scotto said. “We don’t have the tools we need to keep major corporations here.”

The mayor said businesses bear higher costs in California for workers’ compensation and liability insurance, among other expenses.

And remember, almost all those several thousand Toyota jobs are middle-class jobs on which to raise a family. This is another indication that the middle class just isn’t welcome in California.

To change that, what’s needed, for starters, are: massive tax cuts, massive cuts in government waste, repealing AB 32 and the California Coastal Commission, strong pension reform and reducing the government workers’ unions’ lock-grip on government power.

That is, it’s not going to happen.

This led to dozens of stories in the Los Angeles Times that described a series of similar cases involving Toyota and alleged a coverup of the accidents and serious problems with Toyota’s engineering and vehicle design. But there’s a gigantic problem with this story.

The case of the death of the CHP officer involved a misplaced floor mat pinning down the accelerator — not Toyota’s fault. The Prius case by all evidence appears to be a fraud by a con artist — not Toyota’s fault. And as some iconoclastic journalists pointed out as the case was unfolding, nearly all the cases involved elderly drivers who are far more prone to driver error such as hitting the wrong foot pedal.

In the L.A. Times’ first huge takeout on the controversy, here are the ages of the drivers involved in the incidents the newspaper cited (for some incidents, it didn’t offer any ages): 60, 61, 63, 68, 71, 72, 72, 77, 79, 83, 85, 89.

How odd — Toyotas are prejudiced against older drivers!

When government regulators use trial-lawyer dirty tricks

Forbes treats this scandal with the brisk contempt it deserves:

“The evidence strongly suggests [driver error is] what’s behind most cases of unintended acceleration involving Toyota vehicles. … the government has failed to find any evidence of an electronic or mechanical problem to explain why Toyota vehicles have accelerated out of control. There is a politically incorrect explanation: Age. The gremlin inside Toyota’s electronics seems designed to attack people over the age of 60, including the 76-year-old woman who convinced an Oklahoma jury to hit Toyota for $3 million over an accident that killed her 70-year-old passenger.

“Now the Wall Street Journal reports Toyota is close to paying $1 billion to settle a federal criminal investigation into its alleged failure to report the alleged incidents of unintended acceleration that federal authorities have already concluded mostly resulted from operator error. This comes after Toyota agreed to pay more than $1 billion to settle private suits based on the novel theory that Toyota owners had suffered economic damages because their cars were worth less after plaintiff lawyers spread reports of an electronic defect that caused unintended acceleration. Which the government failed to find.

“If this all sounds a little crazy, get used to it. We are now firmly in the era of regulation by legal intimidation … . Regulators, prosecutors and attorneys general have learned a valuable lesson from their private counterparts, class-action attorneys. Build a big enough case, and the target company will settle. The alternative can be fiduciary suicide: Risking the entire net worth of the company on a jury’s whim.

“The Oklahoma jury that determined it was Toyota’s fault that a 76-year-old woman crashed her car exiting the highway demonstrates the stakes. That verdict, if upheld to judgment, might have provided the precedent requiring Toyota to admit fault in thousands of other cases.”

The L.A. Times abets a dishonest scam

While the Times, to its credit, has acknowledged those who doubt Toyota is to blame for these problems, most of its reporting skips over the lack of hard evidence that Toyota is at fault. Nor do LATers acknowledge that if Toyota is not to blame, the automaker can’t be accused of a coverup of these accidents.

Anti-business business columnist Michael Hiltzik is typical.

What’s unfortunate about this is that one of last year’s Pulitzer awards hinted we could finally be seeing journalists appreciating and using the scientific method to ferret out scoops. The Sun Sentinel of South Florida used records from toll stops to document outrageous behavior by local law-enforcement officers:

“A three-month … investigation found almost 800 cops from a dozen agencies speeding 90 to 130 mph on our highways.

“Many weren’t even on-duty — they were commuting to and from work in their take-home patrol cars.”

If the Times had relied on such hard evidence instead of trusting anecdotes shaped by remora-like lawyers peddling oh-the-humanity horror-story myths about malfunctioning Toyotas, its coverage would have been a lot different.

Remember, modern vehicles are festooned with gadgets and gauges measuring their performance. Federal regulators looking at the Toyotas involved in these sudden-acceleration cases closely scrutinized these gadgets and gauges — and found no evidence Toyota was at fault in even one case.

If that’s not the lede of any story about this mess, it’s a comment on journalists’ innumeracy and love of a splashy scandal. Pathetic.