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DENVER - Auto recyclers are wondering if the C A R S Program will hurt their business in the long run, by mandating that engines from clunkers be rendered useless.

 

The program allows for dealerships to take in the clunkers in trade, once that is done the car's engines must be filled with a sodium silicate solution and run into ruin before they let an auto auction bid on the vehicles, who then in turn sells the cars to salvage yards.

 

"We just think the program created an unneeded middle-man by letting the auto auction in the game," said Norm Wright of Stadium Auto parts. "While the cars are prohibited from being sold out of the country, what if the auction allows Mexican auto dealers buy the cars for transport south of the border?"

 

So far, more than 250,000 clunkers have been taken in by dealerships to the tune of one billion dollars. Friday, the House approved adding another two billion to the program that is driving folks into showrooms. The Senate is expected to also approve the funding increase sometime next week.

 

But for the salvage dealers, they wonder why engines in cars as new as 2009 and as old as 1984, should be de-commissioned when plenty of folks--many who have been out of work for more than a year--might be able to use the engines in their cars.

 

"I been out of work and my whole reason for coming here is to find engine parts to keep my truck running," said Joe Campbell. "I don't think they should just kill those old engines, some of us poor folks might be able to use them."

Press reports late Thursday said the government's Cash Allowance Rebate System could already be out of money, hitting a major speed bump and possibly causing dealers some drama.

 

Congressional sources told the Detroit Free Press Thursday night that the U.S. government likely will suspend the program for that very reason. New-car dealers, of course, are hoping the White House and lawmakers work quickly to extend the program, allocating even more money for it. Let's hope CARS' stall is followed by a complete break down.

CARS works this way: Owners of a 1984 or newer vehicle getting 18 mpg or less in combined highway/city ratings can trade in their so-called "clunkers" for more fuel-efficient new cars (in some cases only a few extra miles are required). For their trouble, owners get $3,500 to $4,500 of taxpayer money and their old vehicles' engines are destroyed so they won't end up back on the road.

 

That last part, the destruction of engines, is causing heartburn for more than a dozen already hurting auto-parts suppliers who have had to file for bankruptcy this year. As Michael Wilson, executive vice president of the Automotive Recyclers Association, told a reporter, "Why throw away good parts when the supply chain is in jeopardy? It doesn't make a whole lot of sense." Catherine Tsai, in a story she wrote for Associated Press, reports that engines and drive trains account for 60 percent of recyclers' revenue from a used vehicle.

 

Tsai quotes various auto recyclers who prove the point that the government program benefits those who have enough money to pour into a brand new vehicle while hurting people who need help the most. Norm Wright, the CEO of Stadium Auto and Truck Parts Inc. in Denver, said of the program to destroy perfectly good vehicles, "Now you're removing cars people could afford, and they're not available anymore." He added, "There will be less cars to pull from, so the price of parts will go up."

 

It's unbelievable that the government has set aside $1 billion of taxpayer money to remove roughly 250,000 drivable vehicles from the road. And the situation is getting messy as thousands of people who didn't need a tax break went out to get one to accompany their new vehicles.

 

Hoping to boost new car sales, the government sold "cash for clunkers" playing on environmental sensibilities. But the waste this program brings is irresponsible and the fuel-standard improvements required are a joke. These working-condition vehicles could have gone on used car lots, available to people who can't afford new cars. Or they might have found their way to charitable organizations or relatives in need.

 

But this is better, right? President Barack Obama and Congress created an artificial rush for new cars while destroying working vehicles, giving people who can afford new cars a big tax break and leaving auto recyclers and lower-income car buyers in the dust. What a wreck.

Not everyone thinks the Cash for Clunkers program is a good idea.

 

While the owner of a clunker may get a $4,500 rebate to trade in their car to a dealership, an automotive salvage yard can't compete.

 

The owners of B & A Auto Parts, Staunton, expects their valuable merchandise to dwindle.

 

The Cash for Clunkers program requires dealerships to destroy the engine and drive train in the clunker vehicle as part of an effort to remove gas guzzlers from the road.

 

Those expensive parts are among the ones which salvage yards most depend to earn money.

 

"If this program keeps running, we're not going to have used parts to sell. It's going to hurt us, and it's going to hurt the average everyday person," says Angela Ingram, of B & A Auto parts.

 

Ingram says the consumer will have less used parts available and might be forced to purchase new from a dealership.

 

"For me to find a replacement used engine, I would probably be looking at $700 to $800. For me to go to the dealership to buy a new one, you're probably looking at $4,000," says Ingram.

 

She's not sure how the program will effect business in the long run. Ingram and her husband, who both own and operate the business, fear this program may put them out of business