Garrett is a name known far and wide in the car industry. The Swiss-based company is famous for building some of the best turbochargers in the business, supplying countless automakers. The firm announced Monday it has voluntarily filed for Chapter 11 bankruptcy protection to protect its long-term business sustainability, citing a downturn in sales thanks to the COVID-19 pandemic.

The news comes less than two years after Garrett spun off from its former parent company Honeywell International. According to Benzinga, Garrett took on "significant liabilities" during the spinoff in the form of payments to victims of asbestos exposure that originated from Honeywell's Bendix division.

"Garrett’s fundamentals are strong, but the heavy debt load and liabilities the company inherited following the spin-off from Honeywell, compounded by the financial strains of COVID-19, have created a significant long-term burden on its business development," the company said in a statement.

In addition to the debt restructuring process, Garrett has agreed—pending regulatory approval—to be acquired by KPS Capital Partners, a private equity firm, for $2.1 billion. The company expects to operate normally throughout the transition, continuing to provide products to its customers and retain connections with its suppliers. Hopefully, it'll mean more big Garrett-branded turbo swaps for years to come.

California to Ban Sales of New Gas-Powered Cars Starting in 2035

Sept. 23, 2020

California Gov. Gavin Newsom signed an order Wednesday that aims to end the sale of new gasoline and diesel-powered passenger cars in the state by 2035.

It is an ambitious attempt to bolster electric vehicles in the largest car market in the U.S., as well as a bid to tackle emissions that cause climate change. Transportation is responsible for more than half of carbon pollution in California, the governor said.

More than 11% of all light vehicles in the U.S. last year were registered in California, according to IHS Markit.

California is the first state in the nation to commit to such a goal, but could serve as a spark for other left-leaning states to follow, given its size and historic leadership on regulatory issues. Internationally, 15 other nations have committed to phasing out gas-powered cars according to Mr. Newsom, including Canada, the U.K. and France.

The goal is an ambitious one, given the relatively small size of the electric car market currently. Through July, 6.2% of light vehicles registered in California were electric powered and 1.6% in the entire U.S., according to IHS Markit.

“Of all the simultaneous crises that we face as a state…none is more forceful than the issue of the climate crisis,” Mr. Newsom said while standing in front of several electric cars. “What we’re advancing here today is a strategy to address that crisis head on, to be as bold as the problem is big.”

The order also says that, “where feasible,” medium and heavy duty vehicles such as trucks and construction equipment should be zero-emission by 2045.

Mr. Newsom has emphasized climate change as a key cause of the historically disastrous fires that have ravaged the state in the past month. Experts have said California has become more susceptible to fast-moving, destructive wildfires due in part to climate change, which causes trees and plants to dry out and become more flammable, as well as overgrown forests and an increase in housing in fire-prone areas.

The announcement spurred immediate criticism from the Trump administration. “This is yet another example of how extreme the left has become,” said White House spokesman Judd Deere. “They want the government to dictate every aspect of every American’s life, and the lengths to which they will go to destroy jobs and raise costs on the consumer is alarming. President Trump won’t stand for it.”

The Trump administration is already waging a legal battle against California over its special authority to regulate tailpipe emissions, established under the Clean Air Act in 1970. The case is currently before a federal appeals court in Washington, D.C.

California’s authority to enforce Mr. Newsom’s new mandate would come from that same part of the law, likely making it highly dependent on the outcome of November’s presidential election, said Bob McNally, a former energy adviser to then-President George W. Bush who is now a private energy consultant.

If Mr. Trump’s nominee to replace Ruth Bader Ginsburg is confirmed and he remains in office, it is likely a conservative majority on the Supreme Court won’t let the California program stand, Mr. McNally said. If Mr. Biden wins, he would likely end the case and reinstate California’s authority, opening the door for other states to adopt the same rules.

In a sign that left-leaning states may follow California’s lead on ending the sale of gas-powered vehicles, Oregon Gov. Kate Brown praised Mr. Newsom’s announcement. “I will do all I can to accelerate electrification here,” the Democrat wrote on Twitter.

John Bozzella, chief executive of the Alliance for Automotive Innovation, a trade group that represents major U.S. and overseas-based auto manufacturers, said his members are committed to expanding their electric-vehicle offerings, but mandates like the one issued by Mr. Newsom aren’t the best way to build a successful market.

“What builds successful markets is widespread stakeholder engagement,” among governments, auto makers, utilities, infrastructure providers and others, Mr. Bozzella said in a statement.

A spokesman for Ford Motor Co. said: “We agree with Gov. Newsom that it is time to take urgent action to address climate change...Progress requires public-private partnerships, smart infrastructure and key resources that encourage consumers to invest in electrified products.”

The order is aimed at new car sales and won’t prohibit Californians from owning or selling existing gas-powered cars, Mr. Newsom said.

Brian Maas, president of the California New Car Dealers Association, said his organization respects Mr. Newsom’s ambitions to combat climate change, but has several concerns, including the need to greatly expand public charging infrastructure and to drive down costs of zero-emission vehicles so they are not only available to the wealthy. He also said that enacting such a sweeping piece of policy through an executive order, without legislative approval, was “deeply troubling and deprives Californians of a direct voice in this important issue.”

The leaders of both houses of California’s Democratic-dominated Legislature said Wednesday they support Mr. Newsom’s executive order. “The Assembly looks forward to working with him to pass the necessary legislation to make this bold step land solidly,” Assembly Speaker Anthony Rendon said in a statement.

The California Air Resources Board, which has been at the center of most of the state’s climate and vehicle emissions policies, will be charged with developing the specific regulations needed to implement the state mandate for passenger cars and trucks.

A shift from petroleum products, such as gasoline and diesel, to electricity will require a new statewide charging infrastructure, and could impact the viability of the state’s thousands of gasoline stations. And it will need to upgrade a grid already in need of significant overhaul. The state’s electricity grid experienced two days of rolling blackouts last month during a heat wave. The state’s largest utilities now routinely shut-off large sections of their aging grids to stop their power lines from sparking wildfires on windy days.

Electric vehicles don’t have any tailpipe emissions of greenhouse gases. However, the electricity used to charge these vehicles can be generated with fossil fuels. California has taken strides in recent years to use more wind, solar, geothermal and other renewable resources. The state adopted a law in 2017 to reduce its greenhouse gas emissions by at least 40% by 2030 and 80% by 2050, from a 1990 benchmark.

This isn’t the first time the state has tried to push electric vehicles. A 1990 mandate required 2% of new cars sold in California by 1998 be zero-emission vehicles. At the time, there were only a couple models available that complied, General Motors ’ EV1 and Honda’s EV Plus. Both cars were small and had limited ranges. The mandate was unsuccessful.

“What’s different this time is technology and product availability,” said Michael Wara, director of the Climate and Energy Policy Program at Stanford University’s Woods Institute. “There are products on the market that people want to buy.” Tesla’s Model 3 is one of the bestselling passenger cars in California and several car companies have released new electric models.

Mr. Newsom signed the executive order on the hood of an electric Ford Mustang Mach-E, which is expected to be available for sale later in 2020 or early 2021.

Bans on sales of new internal combustion engines have been spreading across Europe over the past couple of years. The first was in Norway, which in 2017 enacted a target that all new passenger cars and light vans have no carbon emissions beginning in 2025. Several other European countries followed, including France that has a 2040 goal for ending sales of fossil-fuel powered vehicles.

The U.K. set a 2040 goal to eliminate internal combustion engines as well as hybrids, but earlier this year moved that up by five year to 2035. Canada has also passed a target of 100% electric vehicles by 2040, according to the International Council on Clean Transportation, a nonprofit that supports decarbonizing fuels.

Drew Kodjak, executive director of the group, said Mr. Newsom’s order went a step beyond what has come out of Europe because it includes trucks and construction vehicles.

“No other country in the world has been setting dates for heavy duty trucks and every piece of on-road combustion equipment,” he said. “This is ambitious”