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Clunkers stack up as Senate refuels rebate program

It’s crunch, kerplunk for these hunks of junk.


  1. Toyota Corolla
  2. Ford Focus FWD
  3. Honda Civic
  4. Toyota Prius
  5. Toyota Camry


  1. Ford Explorer 4WD
  2. Ford F150 Pickup 2WD
  3. Jeep Grand Cherokee 4WD
  4. Jeep Cherokee 4WD
  5. Dodge Caravan/Grand Caravan 2WD

The Associated Press contributed to this report.  

Related Coverage

Some cars that could have remained on the road for years are seeing their demise thanks to the "cash for clunkers" program.

Pour a little liquid glass - a sodium silicate solution - into the engine, start the car up and before long, the engine seizes up and dies forever.

It all happens so fast - most often in less than a minute, said Jim Neustadt, who handles human resources and compliance, as well as clunkers, for Smart Toyota in Madison.

Across the state, hundreds of guzzlers are stacking up as dealers wait to be reimbursed by the federal government for the clunker payments - up to $4,500 - they've been giving to customers who have driven off in new cars.

"Cash for clunkers" is designed to take low-mileage vehicles off the road and help boost sales of higher-mileage cars. Its popularity prompted the U.S. Senate on Thursday night to refill the program's money tank with $2 billion.

The Senate approved the money on a 60-37 vote after administration officials said an initial $1 billion had run out in only 10 days. The House voted last week to keep the program alive.

Without action, lawmakers risked voter discontent as they left the Capitol for a month long vacation.

Supporters of the program hailed its effect on the auto industry - which had its best month in nearly a year in July - as well as its claimed environmental benefits.

The legislation had its share of critics. "What we're doing is creating debt. The bill to pay for those cars is going to come due on our children and grandchildren," said Sen. Judd Gregg (R-N.H.).

The Mayor of Clunkerville

Wisconsin dealers say it's clearly gotten some unsafe and inefficient cars off the road.

Like the old Dodge Caravan that smelled so bad, could barely be driven but made it to Smart's dealership, said Neustadt, who has inventoried more than 150 cars and calls himself the Mayor of Clunkerville.

"We designated that the clunker of Clunkerville," he said. "It appears as if it was stored in a horse barn for a long time, and it had some windows missing."

At Heiser Ford in Glendale, general manager Chris Meyer said it's clear the program is getting a lot of "old junk off the road, which is both a safety issue and an economical issue for people."

"We had one that was held together with duct tape," Meyer said. "About 20 years old; I could not figure out how that car even ran."

Heiser has dozens of clunkers on its lot, waiting to have their engines disabled.

"We have not dismantled them at this point," he said. "We're waiting for authority on that from the government."

After the engines seize up from the liquid glass, clunkers are transferred to auto salvagers who mine them for parts that can be resold. The cars themselves are guaranteed not to drive again, thanks to a non-functional engine, but there are plenty of parts ready for resale.

Some of them are coming from some pretty nice cars.

"There are some cream puffs coming off the road and some real rats coming off the road," said Steve Liermann, president of Niks Auto Parts in Neenah.

"I've had some absolutely beautiful cars, a 1998 Dodge Caravan with only 56,000 miles on it and not a speck of rust or a ding on it," he said. "I've had a half-dozen Ford Explorers, including three of the same color. It's like triplets standing side by side, and they're just spotless cars. There's nothing wrong with them."

Liermann and other salvage companies haven't seen near the business that they expected to because many car dealers are waiting for clarification from the federal authorities before proceeding with disabling the clunkers they have on hand.

Liermann said he's concerned that dealers aren't required to send clunkers to certified auto recyclers, which meet stringent environmental standards for ensuring that hazardous substances like mercury are removed before cars are junked or shredded.

"If we're doing the right thing for the environment you'd think we'd be recycling all these cars," he said. "A lot of these vehicles are going straight from the dealership to the shredder. In my mind that's totally wasteful."

On the business side, Liermann worries about what will happen to scrap metal and car-parts pricing early next year. Salvage yards must certify to the government that they have destroyed a car within six months, which means that a lot of aftermarket parts from junked cars will be in the marketplace about six months from now.

"That's going to take the scrap prices and drop them down to nothing," he said.

Bergstrom Automotive, the state's largest dealership group, had more than 450 clunkers by midday Thursday, and company executive John Bergstrom was expecting another 50 or so by nightfall. Most of the Bergstrom clunkers are being ferried to a storage lot in Appleton for processing.

Bergstrom said he was surprised to see so many pickup trucks and SUVs be driven in and tagged as clunkers.

"To have this many come out of the woodwork was very surprising to me," he said. "You see 450 of these in one fenced-in parking lot, it is absolutely amazing. It's a positive side to this to get all of these things off the road. It's amazing they were all running, driven around a week ago."

At Smart in Madison, Neustadt said the program has been incredible for business - despite the headaches and paperwork challenges it creates. With another infusion of federal clunker cash on the way, he said it would be nice to start seeing some assurance that the dealership was going to get paid for the clunkers it's already collected.

"I'd feel a lot better if we knew for sure we were going to get the $600,000 the government owes us now," he said. "We have bills to pay, too."

Thomas Content, Journal Sentinel

Smart Motors 

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