Industrials Regulatory News and Trends

Welcome to Industrials Regulatory News and Trends. In this regular bulletin, DLA Piper lawyers provide concise updates on key developments in the industrials sector to help you navigate the ever-changing business, legal and regulatory landscape.

Major EV maker says incentives in Inflation Reduction Act will help it compete. Government-provided incentives set out in the Inflation Reduction Act will help the Nikola Co. by lowering the costs of its electric-truck and hydrogen energy business, the US electric vehicle manufacturer said October 20. The Act, which President Joe Biden signed in August, provides incentives that are intended to bring more battery and electric vehicle manufacturing into the United States. The legislation will help to enable Nikola's semi trucks to be competitive on a total cost-of-ownership basis with diesel-powered trucks, the Phoenix-based company said, adding that the Act’s tax credits and incentives would lower the overall cost of Nikola's trucks, and would create more American jobs. Read some of our coverage of the Inflation Reduction Act here.

FAA will require DHC-3 plane inspections after a fatal crash. After a fatal crash in Washington state in September which killed 10 people, the Federal Aviation Administration said October 27 that it is contacting all operators of De Havilland Canada turboprop DHC-3 seaplanes in the United States to ensure that they conduct inspections recommended by the manufacturer. The National Transportation Safety Board had earlier issued an “urgent safety recommendation” asking the FAA and Transport Canada to take immediate action to require all operators of the planes to conduct an immediate one-time inspection of the horizontal stabilizer actuator lock ring on the plane, in accordance with the instructions from Viking Air Ltd, which has manufacturing rights to the plane. A letter from Viking Air Ltd recommended that “aircraft operators and maintainers inspect the stabilizer actuator and verify that the lock ring is present and correctly installed.”

Lockheed increases HIMARS production. As the war in Ukraine intensifies, Lockheed Martin plans to increase production of its High Mobility Artillery Rocket System (HIMARS), a weapon that is in high demand in Ukraine and across Europe. The company is poised to boost HIMARS production to 96 launchers annually, up from its current level of 60 launchers, CEO Jim Taiclet said October 18. In anticipation of the new business, the company invested $65 million about six months ago to shorten the manufacturing time for HIMARS before receiving a contract from the Pentagon, Taiclet said. Lockheed Martin is also considering expanding its facility in Camden, Arkansas, as demand continues to grow, he added. “We’re cross-training our skilled workforce across a bunch of product lines,” he said, so that as demand grows for HIMARS or the Guided Multiple Launch Rocket System, people can move between building different types of weapons.”

Space-station companies ask the federal government: Who is in charge? At a symposium in Washington, DC, on October 13, representatives of several companies working on commercial space stations said they need more clarity from the federal government on who will regulate them and how. During panel discussions at the Beyond Earth Symposium, company representatives said they must deal with an “alphabet soup” of agencies, none of which has the authority to provide oversight of their operations as required under the Outer Space Treaty. “We need to figure these things out now so that we don’t have problematic issues that slow down the engineering and the scientific and commercial progress in the future,” said Mike Gold, executive vice president for civil space and external affairs at Redwire Space. “We need to have predictability; we need to have clarity and we need to have certainty in terms of the regulatory structure.”

New EPA office will focus on environmental justice. On October 11, the Environmental Protection Agency announced that it has established within the agency an Office of Environmental Justice and External Civil Rights. According to the EPA, the new office will have more than 200 dedicated EPA staff in EPA headquarters and across 10 regions. The office will be led by a Senate-confirmed assistant administrator whose name has yet to be announced. The EPA said the new office “delivers on President Biden’s commitment to elevate these critical issues to the highest levels of the government and solidifies the agency’s commitment to delivering justice and equity for all.” The office will focus on environmental issues affecting racial minorities and underserved populations. “With the launch of a new national program office, we are embedding environmental justice and civil rights into the DNA of EPA and ensuring that people who’ve struggled to have their concerns addressed see action to solve the problems they’ve been facing for generations,” said EPA Administrator Michael Regan.

EPA announces plans to reduce use of "climate super-pollutants." On October 20, the Environmental Protection Agency announced plans to further reduce the emissions of what it refers to as climate super-pollutants, which are widely used in air conditioning and refrigeration. This marks the latest step in the nation’s effort to phase down the use of potent greenhouse gases. The new proposed rule would set guidelines to lower the number of available allowances for the production and use of hydrofluorocarbons — chemicals that can be thousands of times more powerful than carbon dioxide in warming the planet — to 40 percent below historical levels, starting in 2024. “This is a really strong step forward,’’ EPA Administrator Michael Regan said, adding that the Biden Administration is pushing to create ‘’the next generation of chemical compounds that don’t sacrifice the comforts or the needs that we have but makes significant inroads in staving off the climate crisis while boosting American manufacturing.’’ In a 69-27 vote, the US Senate in September ratified the Kigali Amendment, a global climate treaty to phase down the use of hydrofluorocarbons.

Senators ask Biden to act against proposed new Chinese semiconductor plant. On October 17, US Senator Marsha Blackburn (R-TN) and four GOP colleagues sent a letter to President Biden demanding that he act quickly to prevent Huawei Technologies from building the Pengxinwei IC Manufacturing Company semiconductor plant near Huawei headquarters in Shenzhen, China. According to the senators, the opening of the plant would pose national security concerns for the US, undermining the US strategy to counter Huawei, which they describe as an arm of Chinese intelligence, putting American semiconductor companies at a disadvantage, and advancing China’s Military-Civil Fusion campaign. “We are deeply concerned that, despite the obvious threat that PXW poses, your administration has taken no official steps to delay the project’s progress, despite being aware of the project for some time. The Department of Commerce’s apparent inaction is a dereliction of duty,” the senators wrote.

TSA sets forth new cybersecurity requirements to apply to airplanes. The Transportation Security Administration on October 12 announced that it plans to issue new cybersecurity requirements for some key aviation systems in commercial airplanes after several US airport websites were hit with apparently coordinated denial-of-service attacks. The TSA said that the October 10 cyberattacks, which were allegedly organized by pro-Russian hackers, “did not disrupt airport operations or access to information.” Back in 2020, the Government Accountability Office issued a report saying that “modern airplanes are equipped with networks and systems that share data with the pilots, passengers, maintenance crews, other aircraft, and air-traffic controllers” and if not properly protected “could be at risk of a variety of potential cyberattacks.”