Who benefited from the Washington's Cash For Clunkers program? Certainly not car enthusiasts, salvage yards, rebuilders, and the used car industry.
A short time ago, we blogged the wasteful logic in Washington's latest version of "Cash For Clunkers" or "C4C" is it's known around the trade. More than 600,000 "clunkers" have been traded in and scheduled for destruction - all in the name of the environment and the economy.
Like most logic that comes out of Washington, we ask who benefited? Our auto industry enjoyed a brief spike in new car sales, putting workers back on the lines for a short time. Looks good on the evening news, but doesn't hold much water on Main Street with the average working stiff or someone looking for a job. Buyers who could afford new cars made out like bandits, shaving a considerable sum off qualified new car buys.
Lets take a look at who lost out.
Clunker programs make sense when they take outdated gross polluting vehicles off the road and put new, more fuel efficient vehicles in their place. But, that didn't happen in this Washington politics inspired Cash For Clunkers program. A more appropriate name for this program might have been "Cash For Good Used Cars & Parts That Would Have Benefited The Masses".
We're shocked by what has been traded in and destroyed by car dealers, all in the interest of politics, new car sales, and media eyewash. The vast majority of so called "clunkers" were contemporary fuel injected vehicles just as fuel efficient as the vehicles that replaced them.
Need an example - a 1994 Mustang GT with just 59,000 miles - a "clunker" traded in and destroyed. The dealer, as all are required by Washington, poured a silicon mixture in the crankcase and ran the 5.0L engine until it locked up. Bill Hamilton, a buddy in South Carolina, told us about this one.
How about a 2004 Ford Crown Victoria with 4.6L SOHC power and 100,000 miles - just five years old with at least another 100,000 miles left in it - traded in and replaced with a subcompact Toyota? How did an American automaker benefit from this trade? How did the salvage industry, rebuilders, and struggling used car buyers make out from this turn of events?
Know what would have made more sense? Washington writing new car dealers a check for each new fuel efficient car sold and allowing these dealers to send these trade-ins to auction or place them on their used car lot for someone to get more use from. Cash for the sale. Profit in the trade-in. A big tax bill for the masses.
Know who sold the most new cars in the Cash For Clunkers program? Toyota. Ford came in third behind General Motors. Most traded clunker? Ford Explorer followed by other desirable Fords like the F150, Windstar mini van, Ranger pick-up, and others that would have been good for transportation or parts. All salvage yards will get from them is bodies and parts. No engines and drivelines. What kind of silly logic is that? Follow the money trail to Capitol Hill and you make find answers because there's always a personal agenda behind these programs, and car enthusiasts always get it right in the jaw.
Imagine a 2003 Mach 1 or 1993 Mustang Cobra being traded and destroyed. These limited production Mustangs are also on the clunker list along with a host of others. Or perhaps a perfectly healthy 2001 F150 pick-up someone could use with just 80,000 miles being traded and permanently removed from the road by Washington.
This isn't about right or left wing politics, this is just stupid. It is easily the worst clunker program government has ever come up with because so many people have lost out in the process. Over six hundred thousand happy new car buyers. Untold thousands of joyful new car dealers. But how many more people got burned in the salvage and used car industries.
How many folks with old carbureted clunkers who will never be able to afford a new car missed out on good, clean, reliable fuel injected transportation? You know what I am talking about. The old guy still pushing a gross polluting '85 Chevy Celebrity with a worn out carbureted four or V-6 who could have picked up a fuel injected, fuel efficient bargain had there been one available. Instead, what he might have purchased at a price he could afford is frozen solid in the dealer's back lot waiting for the car hauler and crusher.
In a time when individuals, cottage industries, and the used car business are struggling badly due to the worst economy most of us have ever seen, Washington comes up with a program that puts many of them closer to extinction. How did the working and unemployed poor benefit from this program? I'd like to know and I invite your thoughts.
Cash For Clunkers wasn't a true cash for clunkers program, but instead a poorly executed, grossly mismanaged approach to bandaid stimulation of a faltering economy. Washington strikes again. At press time, there are new car dealers still waiting to be paid by the program. And to add insult to injury, there's a backlog of thousands of clunkers that still have to be dealt with.
More food for thought. How much environmental hazard was created by this program via waste oil, coolant, toxic metals, and the like?
Do you have thoughts about this program? We'd like to hear from you at Jim.Smart@sorc.com or at www.mustangmonthly.com. We will keep you posted about the result of this program as information comes in.