National News

Clunkers prove boon to scrap, recycling yards

Posted August 7, 2009 5:31 a.m. EDT
Updated August 7, 2009 7:08 p.m. EDT

— Cash for Clunkers has brought new life to an auto graveyard in Clayton. Shelly Smith, manager of LKQ scrap yard said she is seeing more inventory, that means more cars for customers to choose from when they come looking for parts.

“We've gotten well over 200 vehicles already, (and are) expecting at least 100 more,” she said.

The cars coming into the yard are newer, too. Smith is seeing cars that are just ten years old. A newer car means better parts for LKQ to sell.

Smith’s scrap yard is one of the beneficiaries of the government’s popular trade-in program that gives consumers up to $4,500 in federal subsidies if they trade in their cars for new, more energy-efficient models.

Under the rules of the program, car dealers must disable the engines of the “clunkers” so they can not be driven again. All of the other parts are fair game. Everything from car mirrors, to car seats, even entire pickup truck beds can be re-sold and re-used.

As drivers seize on the opportunity, the clunkers have been trickling down to LKQ.

“We have a line out the door every morning when we open,” she said. “They're excited about seeing what's going out there.”

Business is also piling up at Raleigh Metal Recycling, where clunkers are being crushed like pancakes.

“We are expecting dozens of vehicles,” said owner Greg Brown.

He just bought new equipment that removes hazardous fluids like coolant and gasoline.
After they are drained, vehicles enter the crusher, where windows shatter, metal bends and tires pop. The result is a flattened car that is then stacked to be taken to a facility to be shredded.
There, Brown said, “The parts get broken down into the various components – whether its aluminum or steel – and then they go off to recycling centers and get turned into new products.”

Even at the end of the cycle, Brown said, “Cash for Clunkers” has been a boon. “A lot of people are excited about it because we're creating jobs right here in Raleigh.”

Brown, Smith and their employees can expect to be busy for another couple of weeks after the Senate approved a $2 billion infusion of cash for the rebates Thursday. Officials expect to fund about a half-million more car purchases through Labor Day.

The longer-term impact of the program is less clear.

"Once these clunker rebates expire, it is over," predicted economist Richard Yamarone of Argus Research. "Consumers are not going to keep buying cars. It is a temporary one-time gimmick, not a long-lasting tonic for the recovery."

In the program so far, GM's share of cars sold is largest, accounting for 18.7 percent of new sales. Toyota Motor Corp. followed with 17.9 percent, while Ford had 16 percent. Detroit automakers represented 45.3 percent of the total sales, while Toyota, Honda Motor Co. and Nissan Motor Co., all Japanese firms, totaled 36.5 percent.

Toyota also has the best-selling new model for traders of clunkers, the Corolla. The Ford Focus, Honda Civic, Toyota Prius and Toyota Camry are also favorites. There is one SUV on the list, the Ford Escape, which also comes in a hybrid model that can get up to 32 mpg. Six of the top-10 selling vehicles are built by foreign manufacturers, but most are built in North America.