Scrap yards see lull in ‘clunkers’
Published 5:00 am Tuesday, August 18, 2009
With car dealers worrying about their government rebates and thegovernment apparently struggling to pay them, the supply ofclunkers to many metal recycling sites in Mississippi through theCash for Clunkers program has slowed to a trickle.
But the recyclers don’t mind too much. They’re pretty busyregardless.
“It’s sort of like make up your mind and we’ll be here,” saidJeff Stratton, manager of Brookhaven Recycling, the only localscrap yard certified to destroy vehicles in the Cash for Clunkersprogram. “We want to earn every customer we can get, but it’s notmade a big impact on our business because it’s not been a big flow- the dealers haven’t turned ’em loose yet. Everyone is in standby,everyone is unsure.”
Stratton said his facility on Sawmill Lane destroyed about 16clunkers during the program’s first week in late July, but cardealers began holding onto the trade-ins when it became apparentrefunds for the $3,500 or $4,500 rebates would be slow in comingfrom Washington, D.C. But with many jobless, looking to scrounge upcash wherever possible and steadily trucking old metal to the yard- including vehicles not traded in Cash for Clunkers – BrookhavenRecycling has seen high levels of businesses without the added boonof crushing clunkers, six days per week.
“Not every location has a good car recycling business. We werefortunate Brookhaven and the surrounding area has supported us withenough cars to put in a crusher,” Stratton said.
Cash for Clunkers, the popular name for Congress’ Car AllowsRebate System, was designed to simultaneously spur the ailingautomotive industry and place “greener” vehicles on America’shighways by allowing older, less fuel-efficient vehicles to betraded in, with rebates, for new cars.
The program opened with a bang in late July, and its $1 billionfund expired in days. It was continued recently when lawmakerspoured an extra $2 billion into the pot, but rebates to car dealersare being released very slowly.
Between 30 and 40 vehicles traded in Cash for Clunkers aresitting at Brookhaven’s new car dealerships, Stratton estimated,and they’re holding up profits for everyone in the great recyclingchain.
Dealers aren’t getting paid for their rebates, scrap yardsaren’t recycling and shipping out the metal and metal works aren’tmelting it all down for new products. But that could change rapidlyif rebates start flowing to the dealers.
“We expect a steady flow to begin here shortly as (car dealers)get assurances from the government,” said Jeff Thoman, operationsmanager for Tri-Miss Services, which operates Brookhaven Recyclingand five other yards throughout the state.
Thoman said 56 clunkers have been destroyed in the Tri-MissServices system – which includes Brookhaven, Jackson, Laurel,Meridian, Vicksburg and Yazoo City – so far. He estimated around4,500 clunkers will be turned in around the state by the time theprogram runs its course and the $3 billion behind it is spent.
Such numbers will likely represent a 15 percent increase in hiscompany’s business, Thoman said.
“It’s good business, but I’m not buying a Cadillac as a result,”Thoman said. “But it’s good, it keeps us busy and we are coming offa big, bad flop in the industry, so we appreciate the business.Last year … we had to cut our payroll by 30 percent, and we’restarting to build that up now. It’s all stimulus, brother.”