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Scrap yards see lull in 'clunkers'
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| By: ADAM NORTHAM, DAILY LEADER Staff Writer |
August 18, 2009 |
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With car dealers worrying about their government rebates and the government apparently struggling to pay them, the supply of clunkers to many metal recycling sites in Mississippi through the Cash for Clunkers program has slowed to a trickle.
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But the recyclers don't mind too much. They're pretty busy regardless.
"It's sort of like make up your mind and we'll be here," said Jeff Stratton, manager of Brookhaven Recycling, the only local scrap yard certified to destroy vehicles in the Cash for Clunkers program. "We want to earn every customer we can get, but it's not made 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 16 clunkers during the program's first week in late July, but car dealers began holding onto the trade-ins when it became apparent refunds for the $3,500 or $4,500 rebates would be slow in coming from Washington, D.C. But with many jobless, looking to scrounge up cash wherever possible and steadily trucking old metal to the yard - including vehicles not traded in Cash for Clunkers - Brookhaven Recycling has seen high levels of businesses without the added boon of crushing clunkers, six days per week.
"Not every location has a good car recycling business. We were fortunate Brookhaven and the surrounding area has supported us with enough cars to put in a crusher," Stratton said.
Cash for Clunkers, the popular name for Congress' Car Allows Rebate System, was designed to simultaneously spur the ailing automotive industry and place "greener" vehicles on America's highways by allowing older, less fuel-efficient vehicles to 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 recently when lawmakers poured an extra $2 billion into the pot, but rebates to car dealers are being released very slowly.
Between 30 and 40 vehicles traded in Cash for Clunkers are sitting at Brookhaven's new car dealerships, Stratton estimated, and they're holding up profits for everyone in the great recycling chain.
Dealers aren't getting paid for their rebates, scrap yards aren't recycling and shipping out the metal and metal works aren't melting it all down for new products. But that could change rapidly if 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, operations manager for Tri-Miss Services, which operates Brookhaven Recycling and five other yards throughout the state.
Thoman said 56 clunkers have been destroyed in the Tri-Miss Services system - which includes Brookhaven, Jackson, Laurel, Meridian, Vicksburg and Yazoo City - so far. He estimated around 4,500 clunkers will be turned in around the state by the time the program runs its course and the $3 billion behind it is spent.
Such numbers will likely represent a 15 percent increase in his company'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 off a big, bad flop in the industry, so we appreciate the business. Last year ... we had to cut our payroll by 30 percent, and we're starting to build that up now. It's all stimulus, brother."
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©The Daily Leader 2009
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