Scrap yards see lull in ‘clunkers’
Published 8:40 pm Tuesday, August 18, 2009
With car dealers worrying about theirgovernment rebates and the government apparently struggling to paythem, the supply of clunkers to many metal recycling sites inMississippi through the Cash for Clunkers program has slowed to atrickle.
But the recyclers don’t mind too much. They’repretty busy regardless.
“It’s sort of like make up your mind and we’llbe here,” said Jeff Stratton, manager of Brookhaven Recycling, theonly local scrap yard certified to destroy vehicles in the Cash forClunkers program. “We want to earn every customer we can get, butit’s not made a big impact on our business because it’s not been abig flow – the dealers haven’t turned ’em loose yet. Everyone is instandby, everyone is unsure.”
Stratton said his facility on Sawmill Lanedestroyed about 16 clunkers during the program’s first week in lateJuly, but car dealers began holding onto the trade-ins when itbecame apparent refunds for the $3,500 or $4,500 rebates would beslow in coming from Washington, D.C. But with many jobless, lookingto scrounge up cash wherever possible and steadily trucking oldmetal to the yard – including vehicles not traded in Cash forClunkers – Brookhaven Recycling has seen high levels of businesseswithout the added boon of crushing clunkers, six days per week.
“Not every location has a good car recyclingbusiness. We were fortunate Brookhaven and the surrounding area hassupported us with enough cars to put in a crusher,” Strattonsaid.
Cash for Clunkers, the popular name forCongress’ Car Allows Rebate System, was designed to simultaneouslyspur the ailing automotive industry and place “greener” vehicles onAmerica’s highways by allowing older, less fuel-efficient vehiclesto be traded in, with rebates, for new cars.
The program opened with a bang in late July,and its $1 billion fund expired in days. It was continued recentlywhen lawmakers poured an extra $2 billion into the pot, but rebatesto car dealers are being released very slowly.
Between 30 and 40 vehicles traded in Cash forClunkers are sitting at Brookhaven’s new car dealerships, Strattonestimated, and they’re holding up profits for everyone in the greatrecycling chain.
Dealers aren’t getting paid for their rebates,scrap yards aren’t recycling and shipping out the metal and metalworks aren’t melting it all down for new products. But that couldchange rapidly if rebates start flowing to the dealers.
“We expect a steady flow to begin here shortlyas (car dealers) get assurances from the government,” said JeffThoman, operations manager for Tri-Miss Services, which operatesBrookhaven Recycling and five other yards throughout the state.
Thoman said 56 clunkers have been destroyed inthe Tri-Miss Services system – which includes Brookhaven, Jackson,Laurel, Meridian, Vicksburg and Yazoo City – so far. He estimatedaround 4,500 clunkers will be turned in around the state by thetime the program runs its course and the $3 billion behind it isspent.
Such numbers will likely represent a 15percent increase in his company’s business, Thoman said.
“It’s good business, but I’m not buying aCadillac as a result,” Thoman said. “But it’s good, it keeps usbusy and we are coming off a big, bad flop in the industry, so weappreciate the business. Last year … we had to cut our payroll by30 percent, and we’re starting to build that up now. It’s allstimulus, brother.”