Monday, December 28, 2009

URG Says Feds Missed Opportunity To Keep Cash for Clunkers Program Green

/PRNewswire/ -- The United Recyclers Group (URG) says that the federal government is not doing enough to help promote the green aspects of the auto salvage industry and encourage the use of environmentally-friendly green auto parts. "Cash For Clunkers (C4C) created some much needed green awareness for consumers and momentum within the auto industry," says Michelle Alexander, executive director of the United Recyclers Group. "But a big opportunity was missed by the federal government when they all but abandoned C4C once the front end of the program involving the new car manufacturers and dealers was completed. The back half of the program is far greener than the front half, and yet the ball has been dropped when it comes to promoting the truly green aspects of C4C. We call on the federal government to change course and help us promote the use of affordable and green auto parts to American consumers."

C4C has also resulted in a number of unanticipated problems for the nation's auto salvage industry. With 690,000 cars sold during the brief run of the C4C (otherwise known as CARS) program, and an equal number traded in and scrapped, a 'tsunami of steel' has hit the industry. A number of unexpected delays by the federal government and a shortened run time for the CARS program have meant less processing time for recyclers. There are still serious issues, despite the recent announcement of a 90 day extension to the 180 day deadline (making 270 days total) for processing all of the scrapped C4C vehicles.

Alexander says, "URG has requested and continues to fully support a minimum six month extension of the CARS program processing deadline mandated by the National Highway Traffic Administration (NHTSA). We need at least a full year to do this job right. The recent 90 day extension is a step in the right direction, but it doesn't go far enough. Many of our members now have a one to two year inventory of automobiles waiting to be processed. There has been no help at all from the federal government promoting the use of green reusable auto parts. So with no increase in demand, we are simply looking at an increase in our costs, and it isn't reasonable or fair to auto recyclers. Auto recyclers are hardworking small businessmen and women, very much tied to their communities, and can be found in every congressional district in America. Just because they don't have the lobbying clout of the 'Big Three' in Washington doesn't mean their needs and concerns don't matter when new programs like C4C are created."

"Cash For Clunkers started as a billion dollar program that was going to run until November 1, 2009," says Greg Wilcox, co-owner and president of Midway Auto Parts (Kansas City, MO), and a URG Manager. "Six months to process the clunkers traded in made sense. But then congress tripled the size of the program, it all came and went in a matter of weeks, instead of months, and then NHTSA finally got around to a small adjustment, less than what anyone in this industry has asked for, of the processing deadline even as they tripled the size of the program. This oversight creates huge problems for the auto recycling industry, because there is no money to support our extra costs - such as more staff, more space, and more inventory carrying costs - incurred because we now have to meet an unrealistic deadline."

John Fischl, President of Riteway Auto Parts (Phoenix, AZ) and a URG manager says, "Cash for Clunkers was all about being green and stimulating the economy. All of those good intentions backfire when auto recycling, one of the nation's greenest industries, and this country's 13th largest, is impacted in a way that hurts our profitability and causes us to be less green as we scramble to meet an artificial deadline."

Fischl says, "These vehicles need more time in the system to produce the maximum green benefit for this country and the American consumer. I wonder how many decision makers who supported C4C understand that the really green thing we do is process vehicles and reclaim the green parts for reuse by consumers. This is what separates us from car crushers, who simply shred cars to recycle the metals. Millions of Americans benefit from the green auto parts we put into the marketplace every year. Doesn't that matter to anyone in Washington?"

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