Twenty-Tens Hit the Streets

  • The 2010 Ford Fusion Hybrid. (Photo courtesy of Ford)

New car models are hitting the
dealers’ showroom floors. Lester
Graham reports not as many fuel
efficient cars are selling in the
wake of the government’s Cash-
for-Clunkers program:

Transcript

New car models are hitting the
dealers’ showroom floors. Lester
Graham reports not as many fuel
efficient cars are selling in the
wake of the government’s Cash-
for-Clunkers program:

It’s hard to miss the ads for new models.

(montage of car advertisements)

But in September, fuel-efficient cars didn’t sell that well.

Mark Gillies is the Executive Editor for Car and Driver magazine. He says vehicles that get good gas mileage probably won’t start selling until gasoline prices go up – just like last year.


“That’s when you saw a big move to buying more fuel efficient vehicles. And I think the obvious thing about oil prices is that long term the trend is that they’re going to go up and they’re going to stay that way.”

Fuel-efficient models did sell in August because of Cash-for Clunkers, but Gillies says people bought low-end models this time because they were cheap – not necessarily because they were fuel-efficient.

For The Environment Report, I’m Lester Graham.

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A Clunker’s Fate Once It’s Cashed In

  • Cars stacked up and waiting to be shredded at United Iron and Metal in Baltimore, MD. (Photo by Tamara Keith)

The federal Cash for Clunkers
program kicked off this weekend,
and dealerships were pushing it
hard to sell new cars. The program
was created by Congress last month
to give a boost to the struggling
auto industry while helping the
environment. The idea is to get
older polluting cars off the road
for good and replace them with
new more-efficient ones. Tamara Keith has this report
on what will happen to all the
clunkers:

Transcript

The federal Cash for Clunkers program kicked off this weekend, and dealerships
were pushing it hard to sell new cars. The program was created by Congress last
month to give a boost to the struggling auto industry while helping the environment.
The idea is to get older polluting cars off the road for good and replace them with
new more-efficient ones. Tamara Keith has this report on what will happen to all the
clunkers:

Car dealers suddenly have a whole bunch of cars on their lots they have absolutely
no use for. The clunkers cannot be re-sold. That would defeat the whole green goal
of the program.

So all those old trucks and sagging sedans, they’re headed to places like M and M
Auto Parts in Stafford, Virginia. Most of us would call it a junk yard. But don’t tell
that to owner Rick Morrow.

“Long before green was popular, this kind of operation, even though a lot of people
said, ‘Oh junk yard.’ But they were actually recycling cars. They were making use of
what the component was built for in the first place.”

His company’s logo prominently features a large green recycling symbol.

“This is the dismantling area where after the cars come are inventoried and then take
them apart.”

Morrow’s business is all about re-use. A fender, or a tail light, or maybe an alternator
from this car will live to see another day in a car that needs a replacement part.

You’d think Morrow would be totally excited about Cash for Clunkers. But he’s not.
Because the one component from the clunkers that absolutely cannot be re-sold is
the engine – pretty much the most valuable thing in the car.

“If we do a few dozen cars and it looks like it’s costing us more money than it’s worth,
we’ll say, ‘sorry.’”

From an environmental perspective, it absolutely makes sense to prevent those
engines from ever polluting again. But, from a business perspective it’s a real
problem for the nation’s auto recyclers.

“It will make it extremely hard to make money on a car.”

Scotty Davis is the vice president of All Foreign Auto Parts in Fredericksburg
Virginia. He says it costs him $1800 in labor to take apart a car.

“It’s going to cost me money to do this. It’s one of these things. I have to bring the
car in. I have to get rid of the tires. I have to get rid of all the fluids, the freon,
process it – just to crush the vehicle.”

Davis specializes in newer foreign vehicles. Parts from a clunker won’t help stock
his shelves. But he feels like he has to take the cars to stay in the good graces of
the auto dealers he sells parts to.

“And I’ll be very honest with you. A couple of them I do a lot of business with, I said,
‘I will take your cars.’ And they said, ‘what are you going to do with them?’ I’m going
to crush ‘em. I mean they’re not of any value.”

(sound of a shredder yard)

Once all the usable parts are removed, and the toxic chemicals cleaned out, most
cars will end up at a scrap yard like United Iron and Metal in Baltimore.

“Right now you can see the tail end of a car coming on the conveyor belt down into
the shredder.”

“A tremendous amount of friction is going on as these hammers are pulverizing that
car into small pieces.”

Bruce Savage is with the Institute of Scrap Recycling Industries – a trade group. It
only takes 15 seconds, and when the shredder is done with a car, it isn’t even
recognizable.

“That big pile over there is the end result. It’s just a big pile of metal pieces.”

Savage says the metal is then sold. Whether scrap recyclers will cash in on Cash
for Clunkers all depends on the commodities prices for metal in the coming months.

“What was an old car can become a new car or can become a dishwasher or siding
for a home. It depends on the materials. But everything is being reused,
reprocessed and renewed.”

So maybe a 1989 suburban can be reborn as a 2010 Ford Focus Hybrid.

For The Environment Report, I’m Tamara Keith.

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Dealerships Prepare for Clunkers

  • ‘Cash for clunkers’ became popular before all the rules were final. For the past few weeks there’s been a growing backlog of orders at dealerships. (Photo by Samara Freemark)

Today is the first official day of the cash for clunkers program. The government program offers you up to $4500 to trade in your gas guzzling car for a more fuel efficient new car. Lester Graham reports:

Transcript

Today is the first official day of the cash for clunkers program. The government program offers you up to $4500 to trade in your gas guzzling car for a more fuel efficient new car. Lester Graham reports:

The goal is to clean up the environment and give sagging new car sales a boost.

‘Cash for clunkers’ became popular before all the rules were final. For the past few weeks there’s been a growing backlog of orders at dealerships.

At Varsity Ford in Ann Arbor, Michigan, people have been seeing if their clunkers qualify, and picking out a new car that they’ll finally be able to drive off the lot today.

Matt Stanford sells cars there. He says as far as he’s concerned, ‘cash for clunkers’ is already a success.

“We’re going to sell new cars. We’re going to get cars that don’t really need to be on the road off the road.”

The National Autobmobile Dealers Association says some dealerships have been holding off until they learned more about the rules of ‘cash for clunkers’ which were just cleared up last Friday.

The clunkers will be scrapped. The cash ends when the one-billion dollars in government money runs out.

For The Environment Report, I’m Lester Graham.

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Business Booming at Repair Shops

  • Despite the decline in new car sales, Sales Manager Joe Marken expects more business on the repair and maintenance side of of the dealership. (Photo by Julie Grant)

Not too many people are buying new cars these days. But that’s not all bad news for auto dealers. Julie Grant reports that more car owners are starting to spend money on repair and maintenance:

Transcript

Not too many people are buying new cars these days. But that’s not all bad news for auto dealers. Julie Grant reports that more car owners are starting to spend money on repair and maintenance:

(sound of construction)

Now there’s a sound you don’t hear every day anymore. Especially at a car dealership. It’s construction.

This Toyota Dealer in Kent, Ohio is in the midst of a 12-million dollar expansion.

Sales manager Joe Marken says they’re renovating the repair and maintenance garage. That’s where he’s starting to see the most growth.

“People are looking at, ‘do I want to encumber myself with a 60 month payment of some sort, or do I want to spend X and know that I can get a year or two more years out of whatever I’m doing?'”

Marken says lots of people don’t know if they’ll have a job in the next year or two.

The National Automobile Dealers Association expects more people to spend money on parts and service nationwide this year.

They say there’s an upside – maintenance improves gas mileage and resale value of the vehicle.

For The Environment Report, I’m Julie Grant.

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Hybrid Suvs Roll Into Showroom

For the past few years, people who have wanted to buy a more energy-efficient car have had to think small. That’s about to change. The floor of this year’s North American International Auto Show in Detroit offered a look at several new energy-efficient models due out later this year or within the next few years. The auto industry hasn’t sold very many of the cars carrying one type of new technology so far, but officials hope more choices will boost sales. The Great Lakes Radio Consortium’s Michael Leland has more:

Transcript

For the past few years, people who have wanted to buy a more energy-efficient car have had to
think small. That’s about to change. The floor of this year’s North American International Auto
Show in Detroit offered a look at several new energy-efficient models due out later this year or
within the next few years. The auto industry hasn’t sold very many of the cars carrying one type
of new technology so far, but officials hope more choices will boost sales. The Great Lakes
Radio Consortium’s Michael Leland has more:


At the Toyota display at this year’s auto show, a small crowd formed around the newest version
of the gasoline-electric Prius. Toyota’s sold the car since 1997, and has made it bigger for this
year. What makes this car different is it’s powered by a gasoline-electric hybrid engine. A few
months ago, Denny Jones of Toledo, Ohio ordered a new Prius. He’s still waiting for delivery, so
he drove to Detroit to sit in one at the auto show.


“First of all, I’ve had other Toyotas, so I like the quality. They’ve made improvements on this
one. There’s hatchback. On the first style you couldn’t have a hatchback. They get better
mileage than the first one. And, overall it is a larger car.”


Gasoline-electric hybrid engines have lower emissions and get better mileage than cars with
standard gasoline engines. Toyota says the Prius gets about 50-miles per gallon. But the only
hybrids on the market so far have been small cars like the Prius and the Honda Civic.


Later this year and next, larger hybrids will roll into showrooms. Honda will offer a hybrid
Accord. And Ford will sell a hybrid version of its Escape SUV. Jerry Bissi braved an afternoon
snowstorm to come to the auto show, and was checking one out.


“I prefer to have an SUV-type vehicle for driving back and forth, all-wheel drive, the weather
conditions we have today outside. So I prefer something like that rather than the car.”


There will be several hybrid SUV’s available by next year. Toyota will sell a hybrid Highlander,
and its luxury division Lexus will offer its own model.


“Ladies and gentlemen, it is my pleasure to introduce the world’s first luxury hybrid vehicle, the
Lexus RX-400-H.”


Denny Clements is a vice-president at Lexus. He says there seems to be a pent-up demand for
larger hybrids.


“Our dealers have taken a huge amount of orders just off word of mouth about Prius, I think. I
think what we have when you talk to our customers is there is a lot of very affluent people who
would like to make a statement about Middle East oil, would like to make a statement about who
they are, but they don’t want to make the sacrifices in terms of luxury amenities.”


Toyota says Americans bought about 21-thousand hybrid Priuses last year. But that’s a drop in
the bucket compared to the almost 16-million vehicles sold in the U.S. last year.


“If you added up all the hybrids that have ever been made since the beginning of time, they don’t
equal the production of one high-volume auto plant in one year.”


That’s David Cole. He heads the Center for Automotive Research. He says some people have
shied away from hybrids because they’ve only been available as small cars, and others have been
wary of the new technology. But mostly, Cole says a lot of people aren’t willing to pay more for
a hybrid.


“Where it is going to be in the future is dependant on one thing in my judgment and that is
economics. Can it be done at a cost that consumers will pay for?”


So far, Toyota, Lexus and Ford aren’t saying what their new hybrids will cost. Right now a new
hybrid Honda Civic costs about two-thousand dollars more than the most expensive gasoline
model. The federal government offers a tax deduction to hybrid-buyers to help close that gap, but
it is being phased out during the next few years. Some automakers and environmental groups say
it’s not enough anyway. They want Congress to pass a federal tax credit for people who buy
hybrids.


David Friedman is with the Union of Concerned Scientists. He says the automakers’ decision to
offer hybrid engines in more models is an opportunity for the country to become less dependant
on imported oil – if enough people can be persuaded to buy the vehicles.


“If automakers put some of their 10-to-15 billion dollars of advertising muscle behind this, and if
the government is willing to get these tax credits out there, I think we can see hybrids grow into a
significant portion of the market.”


Back at the auto show, Jerry Bissi says he’d consider buying a hybrid SUV. He says he thinks
others will too, if the price is right and they prove to be reliable.


“I think there are a lot of people sitting on the fence. They’re going to watch the first one, see
how it does. If it does prove to be good, they’ll jump on the bandwagon and be late joiners.”


Buyers might need some convincing, though. On this afternoon at the auto show, Ford’s hybrid
version of the Escape SUV drew only a few visitors compared to the crowds surrounding the
standard gasoline-engine Escape and the company’s larger Explorer SUV.


For the Great Lakes Radio Consortium, I’m Michael Leland.

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