« | »

Obama Ending ‘Cash For Clunkers’ Program

From a weirdly relieved Associated Press:

As another worker, left, uses a torch to remove parts from another clunker, Chip Maggio uses a large construction shovel to crush a Cash For Clunkers car at his Hackensack Auto Wreckers & Repair Wednesday, Aug. 5, 2009, in Hackensack, N.J. Maggio says that one dealership that he deals with has already had 40 clunkers brought to them.

LaHood planning to wind down Clunkers program

By Ken Thomas And Dan Strumpf, Associated Press Writers Thu Aug 20

WASHINGTON – The Obama administration is developing plans to wind down the popular Cash for Clunkers program and could announce by Friday when the incentives will no longer be available.

Transportation Secretary Ray LaHood said Wednesday the department would announce within 48 hours how it intends to discontinue the program that offers car buyers rebates of $3,500 or $4,500 for trading in older vehicles for new, more fuel-efficient models. Department officials met with car dealer trade groups on Wednesday to discuss how the program will eventually end and respond to complaints over a backlog of rebate payments to dealers.

Through early Wednesday, auto dealers have made deals worth $1.81 billion and are on pace to exhaust the program’s $3 billion in funds in early September. The incentives have generated more than 435,000 vehicle sales but dealers want a clear plan on when the rebates will no longer be available so they don’t end up on the hook for any of the incentives.

"We want to make sure that dealers know when we’re getting close" to running out of the money that was allocated for the program, LaHood told reporters. LaHood said he recognized that "dealers are frustrated. They’re going to get their money."

The National Automobile Dealers Association said its trade group met with Transportation officials to discuss dealer concerns about reimbursement delays and ways of fixing the problems. NADA spokesman Charles Cyrill said the association "stressed the importance of addressing — as soon as possible — how the program will end, including the possible suspension of the program."

Dealers have complained of delays in getting their reimbursements approved, causing a cash crunch at their dealerships. Dealers typically borrow money to put new cars on their lots and must repay those loans within a few days of a sale…

LaHood said some of the submitted paperwork has been incomplete or inaccurate, leading to delays. He acknowledged the Transportation Department did not have enough people to process the paperwork but said DOT was ramping up staff.

DOT said earlier this week it was tripling its work force to handle the rebates and expected to have 1,100 workers dealing with the paperwork by the end of the week.

Michelle Primm, managing partner of a four-franchise dealership in Cuyahoga Falls, Ohio, said her store has stopped making deliveries on clunkers purchases until the sales are approved by the federal government. Primm’s dealership has made 31 clunkers deals since the program was launched last month, but has only been paid for 3.

"I’ve got payroll and I’ve got taxes to pay and all those things," she said. "We’re small."

If ‘Cash For Clunkers’ is canceled it will make history as the first government program that has even been ended.

Which is just further proof that it actually did some good.

Even though it turned out to be, much like earlier ‘digital conversion rebate coupon’ program, much too complicated for our brilliant government employees to administer.

They need to stick to simple things.

Like healthcare.

This article was posted by Steve on Thursday, August 20th, 2009. Comments are currently closed.

8 Responses to “Obama Ending ‘Cash For Clunkers’ Program”

  1. canary says:

    AP: LaHood planning to wind down Clunkers program
    By KEN THOMAS and DAN STRUMPF reporting from NY Aug 20 2009

    WASHINGTON – The Obama administration is developing plans to wind down the popular Cash for Clunkers program and could announce by Friday when the incentives will no longer be available.

    Department officials met with car dealer trade groups on Wednesday

    to …and respond to complaints over a backlog of rebate payments to dealers.

    LaHood said he recognized that “dealers are frustrated. They’re going to get their money.”

    Dealers have complained of delays in getting their reimbursements approved,….

    The Greater New York Automobile Dealers Association,… cannot afford to offer more rebates.

    The government’s online reimbursement system was flooded with reimbursement requests shortly after the program began in late July, overwhelming the computer system and staff set up to process the deals. That led to big delays for dealers trying to file the paperwork they needed to get paid back for the rebates.

    LaHood…acknowledged the Transportation Department did not have enough people to process the paperwork

    DOT said earlier this week it was tripling its work force to handle the rebates and expected to have 1,100 workers dealing with the paperwork by the end of the week.

    Michelle Primm, four-franchise dealership.. OH stopped … clunkers purchases until the sales are approved by the federal government.

    *Primm’s dealership has made 31 clunkers deals since the program was launched last month, but has only been paid for 3. *

    http://news.yahoo.com/s/ap/20090820/ap_on_bi_ge/us_cash_for_clunkers_11

  2. curvyred says:

    Can you imagine a private business waiting until after a program was in full swing to properly staff it? What on earth?

    “DOT said earlier this week it was tripling its work force to handle the rebates and expected to have 1,100 workers dealing with the paperwork by the end of the week. “

  3. proreason says:

    The people still coming into the dealerships must all be white.

  4. canary says:

    I can’t believe the gigantic clunker adds in our paper. They sure don’t put the stipulations. So, many full size 4 door trucks Once the people get there, they will do their selling thing. Even without the clunker deductions they were good prices, so is the price of GM cars down across the country?

  5. MinnesotaRush says:

    “Obama Is Killing ‘Cash For Clunkers’”

    o-blah-blah’s Cash for Clunker program WAS dead on arrival!

  6. BillK says:

    Of course we’ll now need to bail out Government Motors again, because of this stupid move.

    From Michigan NPR a couple days ago:

    GM Increases Production

    By Vincent Duffy

    General Motors is calling back more than 13-hundred union workers as the company plans to boost production of many of its vehicles.

    GM is adding shifts and overtime to many of its production facilities in North America, including Lordstown, Ohio where it makes the Chevrolet Cobalt, and at the CAMI plant in Ontario, where it makes the Equinox and GMC Terrain.

    Auto industry analyst Erich Merkle says the Cash for Clunkers program sent many buyers to dealerships.

    “We’re seeing inventory levels that we haven’t seen since 1983. These automakers, they have to respond to the increase in demand that is coming from the cash for clunkers program,” Merkle said.

    Other automakers, including Ford, Honda, Toyota, Hyundai and Chrysler have also announced production increases due to the clunkers program.

    http://www.publicbroadcasting.net/michigan/news.newsmain/article/5/0/1544091/Business/GM.Increases.Production

    How long before these workers are laid off again once car sales drop due to the end of the program?

    The sales had nothing to do with the cars themselves and everything to do with the $3500-$4500 in free cash.

    • canary says:

      yep, do not trust anything with Obama’s name on it. Obama sounds like he’s doing a commercial on his weekly stints. He’s getting wierder.

  7. Rusty Shackleford says:

    November, 2012, “Americans Celebrate As ‘Clunker’ Presidency Ends”


« Front Page | To Top
« | »