Cash for Clunkers? Groups Taking Sides on Bill

Posted May 29, 2009 at 5:30pm

Domestic automakers on Tuesday will announce their May sales figures, totals that are expected to add insult to injury to the ailing Big Three, whose membership includes the already-bankrupt Chrysler and the soon-to-be General Motors Corp.

“It’ll be yet another reminder of how bleak the situation is out there,— said Christin Tinsworth Baker, a spokeswoman for the still-solvent Ford Motor Co.

To move cars off the lot, foreign and domestic producers alike are pitching lawmakers on a $4 billion “cash-for-clunkers— subsidy that would entice potential buyers to trade in their older gas guzzlers for new, more fuel-efficient models.

Supporters of the plan also have found an obscure champion in Rep. Betty Sutton (D-Ohio), a second-term Member whose Akron-area district includes a Ford plant and centers for Goodyear and Firestone, tire manufacturers whose wares, too, sit collecting dust at dealerships across the country.

Sutton’s bill, which was introduced last week, is the latest iteration of a national automotive voucher program that started gaining steam earlier this year. Similar to recent programs in Germany and other European countries, the legislation would provide $3,500 vouchers to car buyers or leasers who swap out their current cars for new models that travel an average of four miles farther for every gallon of gas.

For buyers willing to trade in their cars for models that get 10-miles-per-gallon better fuel economy, the voucher increases to $4,500.

“Congresswoman Sutton plans to work with leadership and her colleagues to pass the bill before August recess. The goal is to help consumers, the environment and to boost auto sales,— said Sutton’s chief of staff, Nichole Francis Reynolds. “There are 3 to 4 million working families employed by the auto industry who are relying upon the success of the auto and related industries. This bill demonstrates that multiple goals can be achieved.—

The language of Sutton’s bill, which has a similar version in the Senate, also may be added as a sweetener to Senate tobacco legislation likely on the floor this week, a source said.

But not everyone is pleased with Sutton’s plan, which could eradicate entire generations of American cars. The giant aftermarket automotive repair industry is fuming because billows of smoke rising from car tailpipes means big business for parts makers and mechanics.

Sandy Bass-Cors, executive director of the Coalition for Auto Repair Equality, said her group is concerned that a cash-for-clunkers program would “put a dent— in her membership by hurting replacement parts producers, whose primary market serves lower-income drivers. Those drivers are also unlikely to buy a new car under the Sutton program.

Even more, the new cars purchased with the vouchers are likely to be hybrids, whose computerized engines must be serviced at dealerships.

“We can’t repair those,— Cors said.

The Specialty Equipment Market Association, whose members make automotive performance parts, is urging Speaker Nancy Pelosi (D-Calif.), House Minority Leader John Boehner (R-Ohio), Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) to scrap the proposal altogether, writing in a letter last month that it “would unnecessarily crush perfectly good cars.—

“SEMA represents nearly 7,000 member businesses nationwide that design, build and sell products that improve motor vehicle performance, appearance, comfort and control,— SEMA CEO Christopher Kersting wrote to the Congressional leaders. “Many SEMA members are engaged in the business of restoring older cars to help preserve our nation’s automotive history.—

If lawmakers do take up the proposal, however, Kersting’s group is seeking a carve-out for vehicles that are 25 years or older and an exemption for recycled motors.

And while parts makers are unlikely to change their minds, rental car agencies last week fell in line behind Sutton’s bill, which is supported by Pelosi and the White House. The firms, which frequently sell off their fleets for newer models, originally were hesitant to support any cash-for-clunkers program because it would make their slightly used cars difficult to sell.

But last week, Enterprise Rent-A-Car, National Car Rental and Alamo Rent A Car all had a change of heart.

“We initially thought it would be better to include nearly new cars in this legislation,— Laura Bryant, a spokeswoman for the three companies, said in a statement. “However, we also are longtime partners with the auto manufacturers and, as a result, we don’t want to impede their important efforts in any way.—

“We fully support the Cash for Clunkers’ initiative and encourage all Senators to sign on and help its passage,— she added.