Cash for clunkers stimulates business

Marketplace Staff Jul 10, 2009
HTML EMBED:
COPY

Cash for clunkers stimulates business

Marketplace Staff Jul 10, 2009
HTML EMBED:
COPY

TEXT OF STORY

Bill Radke: General Motors CEO Fritz Henderson holds a news conference this morning in Detroit. He’s expected to announce the company is officially out of bankruptcy today — that was fast and financed by the government. He’ll also describe the company’s plan to someday make money again.

The federal government is also helping automakers with a new so-called cash for clunkers law — the one that gives you an incentive to trade in your old car for something more fuel efficient. So do car dealers actually think this law will help? Reporter Sally Herships wanted to know.


Sally Herships: Brian Benstock runs a Honda dealership in New York. He gives a thumbs down to the the government’s bailout of GM.

Brian Benstock: They didn’t save a job, they didn’t sell a car, they didn’t save a dealer, they didn’t save GM.

But he gives a thumbs up to the new Cash for Clunkers plan. Hundreds of dealers have closed over the last 18 months. Benstock sees this plan is a kind of stimulus for the entire industry.

Benstock: Because dealers are spending additional money for advertising, dealers are getting direct mail campaigns prepared, we’re making arrangements with the salvage companies to take these other cars from us.

But not everyone’s convinced Cash for Clunkers will be a runaway success.

Cliff Banks works for Wards Dealer Business, a magazine for car dealers:

Cliff Banks: One of the questions that some experts have and some dealers have is whether the customers driving the clunkers will be able to get financed by the banks.

Like so much of the rest of the economy, whether Cash for Clunkers works will depend on whether lenders can get on board.

In New York, I’m Sally Herships for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.