Good news for ‘Cash for Clunkers’ programPublished 9:18pm Friday, August 14, 2009
By JESSICA SIEFF
Niles Daily Star
Efforts to keep people trekking to car lots across America trading in old cars for new ones as part of the ‘Cash for Clunkers’ program, received a bit of good news Thursday after news broke that dealers were reporting depleting stock and little turnaround on new inventory to keep up with demand.
The United States Department of Transportation announced it would allow consumers to order their vehicles from manufacturers, providing a voucher for those automobiles that might not be on a dealer lot.
The announcement came after Congressman Fred Upton made a stop in Berrien County on Tuesday to push support for the program which he said has been creating a demand subsequently bolstering the state’s economy.
“‘Cash for Clunkers’ is fostering activity on the production side in the auto industry that we have not seen for some time – from assembly plants on down to the parts suppliers that dot southwest Michigan, production orders are up and folks are going back to work,” Upton said Tuesday.
“People across America are flooding dealer showrooms to take advantage of the successful program. In just two weeks, the shockwave through Michigan’s economy from ‘Cash for Clunkers’ has been remarkable. Folks would much rather be working and paying taxes than be unemployed and drawing benefits, and this program is providing new employment opportunities at a time when we need help the most,” he added.
Upton, co-chair of the Congressional Auto Caucus, has long pushed support for the program which encourages car owners to trade in older vehicles for newer models. The program outlines requirements that provide for buyers to purchase models that exhibit better fuel economy – and make eligible substantial rebates.
According to Upton’s camp, although the ‘Cash for Clunkers’ program was authorized for $4 billion, only $1 billion had been appropriated for it and that amount had been quickly exhausted. The House passed emergency legislation July 31 and the Senate followed suit on Aug. 6. Another $2 billion was put into the program Aug. 7.
The program is said to have been especially critical to Michigan’s economy.
Upton joined Rep/ Candice Miller in the push for the Department of Transportation to address the issue of dealers running out of inventory.
In a letter to Secretary of Transportation, Ray LaHood, Miller and Upton wrote that during “this program’s short duration, the vehicle supplies of the three Detroit automakers have already been cut by 2 weeks. Certain vehicles that have proven to be extremely popular for new purchases under this program are quickly becoming scarce… We would ask that the National Highway Traffic Safety Administration (NHTSA) consider modifying the Car Allowance Rebate System to allow purchasers to reserve a voucher for a newly-ordered vehicle from an automobile manufacturer. This will allow consumers to purchase the vehicle they want, even if it is not presently on the dealer’s lot.”
The development seems to be an answer to the problem of demand without supply. But the program has not been without its share of hiccups. When the first amount of appropriated funds had been exhausted, many expected to see the program shut down completely.
Reports across the country expose additional criticism for the program. In Los Angeles, charities report a slowdown in donations because more and more older, used vehicles are now being turned in for new ones. Some used car dealers say they also are suffering.
Whether or not one thinks it a good idea, it seems to be working. Ford made an announcement of its own Thursday, that it would be increasing production.
The Detroit automaker said it would increase North American production by 10,000 units in its third quarter, with plans to produce 570,000 vehicles in the fourth – a 33 percent increase from one year ago.
The company stated that “after gaining U.S. market share in nine of the past 10 months and posting a year-over-year sales increase in July, Ford is off to a fast start in August due to continued strong demand for popular new products and the extended “Cash for Clunkers” program.”
“As we gain momentum with strong new products – with top fuel economy, quality, technology and safety – we are in a position to increase our production and deliver profitable growth over time,” said Ford’s president of The Americas, Mark Fields.
For more information visit www.cars.gov.