Cash for Clunkers - Good or Bad Idea?

british_rover · July 2009

If they, as in the dealership, signed all the paperwork without leaving themselves an out for a change in the program then they are on the hook.

plekto · July 2009

Well, Mahindra needs a new factory. BMW wants to build Minis in the U.S., VW is planning 1-2 more plants... Why build a whole new plant when you can buy a functional one that's ready to go for a fraction of the cost and no build time? Spend 4-6 months re-tooling and you're good to go.

There will be an American Auto Industry(tm). Just it will be a bunch of smaller players and the UAW will be a distant memory.

Mr_Shiftright · July 2009

IMO, if the D3 go down, you will never EVER see a major American car manufacturer again. You may see Fords made by Toyota in Indiana or something, but you will never see a pure American car company beyond M. Mouse stature. That's it, finito, done, forever.

Investors could finance commuter trips to the moon for less money than to replace Ford, Chrysler or GM from the ground up.

Sure, some foreign companies could buy up the D3 at a fire sale---if that's your idea of a good alternative to trying to save the D3 from extinction by things like C4C.

That doesn't strike me as part of the original premise, of "innovative new startups". (an impossibility IMO).

If anything it strikes fear into my heart. It's very predatory and bodes ill for the country. Foreign ownership of all major manufacturing in the USA?

Not good.

gagrice · July 2009

If anything it strikes fear into my heart. It's very predatory and bodes ill for the country. Foreign ownership of all major manufacturing in the USA?

Who do you think we are borrowing the money from for all this stimulus? China may have a bigger stake in the US than our own investors. The UK is a shell of foreign ownership. I find it ironic that India now owns all the UK steel and most of their auto manufacturing. After centuries of keeping India as a slave state. We are right behind the UK and the most of the EU. GM and C are dead just not buried and they are starting to stink real bad. We are wasting billions every month keeping them on life support. I could understand if we were giving a helping hand to the suppliers. This is the mother of all trickle down economics.

gagrice · July 2009

A money meter showing how much is left in the C4C fund. 16k have taken advantage according to the NHTSA.

http://www.cars.gov/index.php/balance

fintail · July 2009

Actually, if one looks at the products available, Germany has the greatest say in the British auto industry, which is some good payback regarding blighty's crimes of the past.

This is an insignificant bandaid, not the trickle down garbage as proposed 25 years ago by some profiteering traitors who have dug us into the hole we see now. I find it hard to cry about this CFC scheme when we continue to piss away billions on Israel every year.

nippononly · July 2009

What is the "CAT3" gauge?

stephen987 · July 2009

The CAT3 gauge refers to the money (7.5% of the total) that is earmarked for Category 3 (Work Truck) trades.

philliplc · July 2009

obviously because of the time it takes to get deals into the system and approved the meters are gonna run way behind actual numbers.

stephen987 · July 2009

Yes, I noticed the most recent update was about 36 hours ago, at 9am on the 28th. Since they only began making payments on the 27th, does this mean that $17 million in rebates were approved on the first day?!?

If that's accurate (I have my doubts, like philliplc) then we should expect the CARS funding to last about 50 days--i.e., till mid-September. But there's no way to know whether that's money already paid, or money approved, or money anticipated to have been spent. . .

philliplc · July 2009

it's $69+ mil now

http://www.cashforclunkersfacts.com/bill/858-million-left-for-cars-program

stephen987 · July 2009

Yikes.

kdhspyder · July 2009

But your point doesn't address the original subject. So it's interesting but irrelevant.

The original post back several pages by maryh3 proposed that both GM and Chrysler should die immediately and that immediately all the workers and all the suppliers would begin finding jobs and new projects with some new startup which would take the place of both of the B2.

Simply snap of the fingers and a new world class supplier of 3-4 million vehicles would magically appear out of no where. Well it's impossible for a new manufacturer to sprout from between the cracks and begin supplying the US buying public with 3-4 million units of world class cars, trucks, crossovers and SUVs overnight.

Your contention Lotus is ridiculous and bears no weight either. Your comparison of a company that makes 4000 units a year somehow supplying a void of 4 million units is frankly worthless.

Mahindra is huge as is Chery and Tata. None of the three will be able to step in as maryh3 supposes and fill the void of a disappearing GM and Chrysler overnight. Not in 3 yrs or 5 yrs or even 10 yrs. They certainly won't be able to do it by importing vehicles. They will have to build plants here if they have any chance of succeeding. Then begins the huge initial investments.

This was the original discussion.

plekto · July 2009

Well, it's going to be several years. Andf it's going to be partially absorbed by half a dozen smaller makers. Such is reality.

The UAW will be gone. Union labor won't happen again in our lifetimes, if ever again. And even then, half of the employees will need to find other lines of work.

There still will be a U.S. auto industry. Just no longer of the size and scale that it once was. This, btw, is exactly like the electronics and television and semiconductor industries. Fact of life, get over it. Just look at a list of classic car makes sometime. Nearly a hundred companies that are out of business. GM and Chrysler will be just another name on the list in 30 years. Like Stanley Steamer and Checker and a dozen other major brands of old...

nippononly · July 2009

a C4C deal, a radio ad from a local VW dealer indicates that all their models have $2000 in cash rebates over and above the C4C money, and some have a $4000 rebate. Yikes. It's good money, but VW is more desperate to sell than I would have expected.

Wish I had a clunker to trade, a new GTI would look good in my driveway. :-)

Mr_Shiftright · July 2009

RE: VW -- this brand will probably be my next new car, but only after they boost their quality control a bit more.

RE: Auto Industry ----under the scenario mentioned, it'll be a "US Auto Industry" in the same way that Rolls Royce and Bentley are part of the "British Auto Industry".

I think unions will surge in membership. This usually happens in difficult economic situations. Unless of course all industry is suddenly taken over by foreign interests--then you might see lots of striking.

The chaos that is possible from a sudden collapse of the D3 is endless. It's a good idea IMO to do whatever is necessary to preserve a scaled-down version of the domestic industry and its infrastructure. A 10-20 year takeover by foreign interests could be far more palatable. Gives everyone time to regroup.

isellhondas · July 2009

That meter is worthless and the dealers know this.

A lot of stores have yet to process any and there is this dark cloud of fear that the monsy may be gone or almost gone at this point.

nortsr1 · July 2009

I am with you on this, gagrice...There are plenty of empty dealerships as we write. Just in my area alone, there is an empty old Ford lot and building for sale or lease, a Chevrolet lot and building for sale or lease, and a Chrysler lot and building for sale or lease.....and this is in a ten mile area from my home in NJ. I have to assume there are many, many more available through out this great nation of ours just waiting to be filled with other countries metal.
Yes, the mechanics will have to be retrained for the specific product, salesmen updated, and distribution areas set up ( with now empty warehouses, etc.but it will NOT cost billions as some claim... Just my opinion.... even though I like to buy American, this will mean a hell of a lot of new jobs for the now unemployed Americans (sales people, mechanics, book keepers, etc., etc.)!!!!

fintail · July 2009

2004 RX8? Early M3s? 3000GT Spyder? Please....but the 1987 big Fomoco lineup and 1992 Caravan etc is off the list...nothing fishy there.

british_rover · July 2009

RE: Auto Industry ----under the scenario mentioned, it'll be a "US Auto Industry" in the same way that Rolls Royce and Bentley are part of the "British Auto Industry".

I would argue that the "British Auto and motorcycle Industry" is in better shape now under mostly foreign control then they were 30-40 years ago under mostly British control.

The same could happen to a large portion of the US auto industry but it needs to happen slowly like you said over 10-20 years otherwise the collapse will take even the healthiest suppliers and Ford down with the rest of the industry.

Mr_Shiftright · July 2009

Sure, it might be healthier but it's not British, was my point. . Definitely though, a Rolls Royce is 10Xs a better car than it ever was in the 1970s and 80s.

We already know that Toyota makes a better car than we do. But will they make a better Presidential limousine? :P

british_rover · July 2009

No, its not British in the same sense it was 30-40 years ago but at least it still employs Britons.

Hmhh Toyota Crown Presidential Limo? I don't think so. I think the new Fusion is a much better car then the current Camry.

I think the Malibu had the potential to be at least as good as the Camry but I bet it gets screwed up.

maryh3 · July 2009

You are forgetting that the plants that would have gone onto the auction block are already built. And those crying about development costs are forgetting that the seemingly least fair part of upstart companies is that they don't have the development costs - they have already been done for them by the likes of GM and Chrysler. The upstarts don't have to develop fuel injection, McPhearson struts or disc brakes. Ask Hyundai about it.

The whole reason CARS was implemented was that people aren't buying cars - and you are implying that there is a shortage of them - and a void to fill. IMO there are too many cars out there already. Fixing up the older ones, we all agree is cheaper and more envornmentally sound than government sponsored recycling program. Should GM have received no government bailout their assets would have been auctioned cheaply to Ford perhaps, private investors, Honda etc. for use if they needed to beef up production to meet the nonexistent shortage.

Since you want government bailouts to US auto companies why are you not buying and driving American cars? I understand UAW workers who drive American cars siding with the government - but when so many on these boards are buying foreign while wanting to continue throwing US tax dollars at a company they think makes an inferior product that they won't buy, and who pays too much for labor and management, and who can't turn a profit -- I can't accept your sincerity. As a rough estimate, it looks like 90% or more posting on these boards are buying foreign - and you are pushing them to do so since you sell Toyotas.

I don't particularly want GM to go under but I oppose government intervention into the private sector more. I have been eyeing the Chevy Volt as a possible replacement for my husband's POC BMW for a few months. Had GM gone on the auction block I would have gotten together with other private investors who might want to buy the plans and assets related to the Volt venture. We were denied that right. An "upstart" company with clever management, good workers, skilled craftsman, innovative engineers would do better with the Volt than GM will. This is all just political vote buying.

If you fear the US auto industry leaving forever than YOU have to buy American. I have no such fear. As I maintain, corporations errode. As the foreign automakers get bigger, they will experince the same problems as GM and someone new would takeover. Korea is already threatening Japan.

Large expensive industry doesn't equal invincibility and monopoly. The biggest, airlplanes, has "upstart" Airbus France now rivaling Boeing.

Mr_Shiftright · July 2009

there won't be any upstart auto companies except the heavily funded children of already huge corporations, or M. Mouse automakers like Zenn and Zap.

While it is true that one doesn't have to re-invent the wheel to build a car, if you buy other people's engines and transmissions and fuel injection, you will remain very small and very uncompetitive.

There is a parallel in American automotive history. For a time after WWI, there were hundreds of "assembled" cars---that is, cars that used the off the shelf parts from dozens of manufacturers. These companies were formed with relatively low start-up costs --they just bolted stuff together. What happened was that the cars were mediocre and too expensive, and they all soon disappeared.

Kit cars and makers like Saleen are descendants of the Assembled Cars.

RE: Ford Fusion/Malibu --- like you said, great promise but will they screw it up again?

RE: Airbus -- Airbus began right off the bat as a consortium of aerospace manufacturers. Money, skill, 80,000 workers, from the get-go.

andre1969 · July 2009

There is a parallel in American automotive history. For a time after WWI, there were hundreds of "assembled" cars---that is, cars that used the off the shelf parts from dozens of manufacturers.

Heck, even the earlier Fords used engines from an outside supplier...John and Horace Dodge, the Dodge Brothers. Yes, THAT Dodge! I wonder if that's where the acronym "Effed Over Rebuilt Dodge" comes from? :P

lemko · July 2009

A foreign Presidential limo? Why not an old Mercedes 600 Pullman just like is currently used in all Third World banana republics which we will soon become. Then we can have President-for-Life George W. Bush III wearing his lavish quasi-military uniform standing in back of the Laundaulet waving to the compliant and docile impoverished riff-raff.

Mr_Shiftright · July 2009

I don't think there are enough Secret Service personnel to push that Mercedes 600 every time it breaks down!

The Presidential Hybrid? May I never live to see the day :P

british_rover · July 2009

Lots of room to mount solar panels on that big roof...

Karen_S · July 2009

http://www.autoobserver.com/2009/07/some-clunker-deals-based-on-old-epa-numbers-- will-be-honored-dot-rules.html

selden · July 2009

I am also very skeptical about the CARS meter. I picked up a Fit on Wednesday morning, and the salesman said they had sold 30 CARS program vehicles since Friday. If this is the case in a relatively small town dealership in Delaware, I can imagine what it must be like in a big city dealershihp. I expect the money to run out before Labor Day.

tim7400 · July 2009

Ok I have a 93 Legend, no one can tell me if mine is pre cat. What does Pre cat mean???

tim7400 · July 2009

I just came from a Chevy dealer in Mpls. and he told me that the government is turning dow alot of cars due to misspelled names on titles, the titles don't match the insurance papers etc. Even for a name not being spelled out like title says Alexander but the insurance letter states Alex. They will not accept it. He also told me that a local Toyota dealer took in 71 clunkers this week and not one of them got approved!!!!
Our government shows us once again what a joke it is!!!

isellhondas · July 2009

Not one approved?

Seriously, that sounds hard to believe but can anyone see why the stores are cautious?

andres3 · July 2009

Your money comes back to you in the form of national defense.

So that's all my income tax is going to? How about when Clinton reduced defense spending and closed a bunch of overgrown bases? Did the reduction in costs equal an equal reduction in income tax?

If we don't waste money on GM and Chrysler sesspools and drains on our society, the gov't would have to collect less taxes..... either that, or pay off the debt. A dollar saved is a dollar earned, it doesn't matter where it comes from or what it's going to, a dollar is a dollar.

selden · July 2009

How is it the government's fault if people at a dealership cannot follow the instructions and do simple things like spell a person's name correctly? Were the people in the CARS program not monitoring things closely, we would be reading a bunch of stories about fraud. As it stands, after reading the entire CARS program submission, I was very impressed at how thoroughly they are trying to guard against fraud.

nippononly · July 2009

Kudos to Edmunds! And to the government for doing the right thing. :-)

I hope no-one clunkers an RX8 - I don't want any precious rotaries going to the crusher.

andres3 · July 2009

Your hatred of the B2 and the UAW might be well founded ( I certainly as a seller of Toyota's have no need of additional competition ) but as an American I contend that their immediate death and disappearance would be too great a blow to all of us. Barriers to entry will keep out any new company from replacing the B2 for at least 20+ years. That's assuming that any company even wants to try to join the club by investing $20 Billion upfront.

Funny, I didn't find anything "immediate" about the death and disappearance of GM and Chrysler (or their funded bailout banruptcies). Their death and disappearance has been a long time coming. I believe most people who see the bottom line with forward looking glasses on had realized for decades now that GM and Chrysler were on a one way ticket to destruction. What is immediate about Chrysler's death??? They died before some 30+ years ago. Sure, they've had some ups and downs like a roller coaster, but their bankruptcy was always inevitable and predictable due to poor vehicle quality. GM had the same product quality problems so I believe their death wasn't immediate, but a long time coming and very VERY predictable.

I believe the state of our economy and credit markets only accelerated the death a bit, but it did not change the end result. I believe the bailout monies have been wasted on GM & Chrysler, because I truly believe they are companies that are UNsaveable. I don't think 7 TRILLION would save GM & Chrysler. They have a one way ticket to destruction and death, and I don't want to see my government taken down the drain with them. They are like a drowning victim trying to cling onto anything that they can grab ahold of, and right now that's the American taxpayer.

andre1969 · July 2009

I think "pre-cat" means that it has miniature catalytic converters in the exhaust, immediately where they come off the exhaust manifold. Being a V-block engine, you should have one for each side. They look like little miniature catalytic converters.

I had an '89 Gran Fury that had the pre-cats, so I'm surprised that by 1993, some cars still didn't have them.

cwesleyg · July 2009

I've heard of dealerships faking ownership to get people cash for clunkers they never owned...

hpmctorque · July 2009

"... take my '82 Tercel..."

Okay, if you insist I'll take it! There can't be many of these left. Can't remember when I last saw one.

hpmctorque · July 2009

Sure, I can identify with that feeling completely.

kdhspyder · July 2009

Reading comprehension seems to be an issue here.

I never said that there was a shortage. I never implied that either. I was using your statements that you wished for GM and Chrysler to disappear and not to have been bailed out. Your wish is for them to be liquidated.

Now if this occured then absolutely there would be a shortage of vehicles. A huge shortage. But it didn't.

You're also naive to think that if the former plants of the B2 went on the auction block that suddenly out of nowhere some upstart would spring up, buy all the equipment and begin to make Silverado's, Corvettes, Rams, Cobalts, etc. Just who do you have in mind that has the expertise, organization and to build a 3 or 4 million unit auto producer out of thin air in less than 5 years? There is no one. You're just making stuff up here just to continue the argument.

And why would any company want to buy the old broken down plants of GM or Chrysler in Michigan, Indiana and Ohio? All the new plants are going up in the mid-South and South. Sure a few GM plants are very capable like Oshawa and Fairfax and Spring Hill so GM kept these in the 363 sale and left the garbage to be auctioned off and shutdown.

You also have to disabuse yourself about the concept of 'government intervention in the public sector'. This never happened. It's the creation of Faux News and the Party of Negativity.

Just to remind you of the facts the two private companies threw themselves on the administration of GW Bush and said "We give up, we can't make it on our own." There was no intervention in the affairs of a private company. The two private companies asked to be taken over. Those are the real facts.

You keep coming up with some miracle producing upstart with clever management, skilled laborers and good technicians? Name this miracle company. It doesn't exist except in your dreams. Look at reality first. Going along in this cloud of dreams is childish. Business doesn't work on childish dreams.

volvomax · July 2009

MSNBC.com is citing an AP report that the programs gonna be suspended.
Gov't worried about running out of $$. Wow.

kdhspyder · July 2009

The issue is that the name on the official Title document might be Alexander Dumas Pierpont while the insurance company has it as Alexandre D. Pierpont.

REJECT!!!!!

kdhspyder · July 2009

Are you willing to eat your words if the two companies go public via IPO's and payback all or most of the funds invested?

Your $7 Trillion figure is ridiculous hyperbole. You're getting emotional. You can wish them all the ill will in the world and work to see them die but don't hold your breath. You'll die first. There new structures give them a free ride for a long time to come.

andres3 · July 2009

I could make a vehicle thousands of Americans would want to buy if you gave me just 1 Billion dollars.

fezo · July 2009

Sources: Government to stop cash for clunkers

Looks like it's too successful...

kyfdx · July 2009

Cash for Clunkers - Good or Bad Idea?

Comments

Helpful Tools

Most popular vehicles