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Stacey Vanek-Smith: Good news from Honda this morning. The carmaker announced earnings today and it nearly tripled its profit forecast for the year.
A lot of that was thanks to the sales boost it got from the Cash for Clunkers program. Hundreds of thousands of gas guzzlers were traded in over the summer for a government rebate. People walked away with a shiny new fuel-efficient model. And the clunkers were hauled off to the junkyard. Trouble is, junk yards now say they’re overloaded. Marketplace’s Mitchell Hartman reports.
Mitchell Hartman: Mark Forcum manages a chain of auto recycling facilities on the West Coast that strip junked cars and sell the parts. What’s left is crushed and shredded into scrap metal. Forcum says so many clunkers came in so fast.
MARK FORCUM: Instead of the parts being recycled, the usable parts, they just went straight into the shredder and got chewed up.
And clunkers are still piling up. Some recyclers have thousands waiting to be salvaged. Under the clunkers law, recyclers have to dispose of junked cars within six months of receiving them. The industry wants an extension to at least a year.
Part of the problem, says Michael Wilson of the Automotive Recyclers Association, is that consumers traded in a lot of late-model trucks and SUVs in perfectly good condition.
MICHAEL WILSON: The parts were a lot better quality than they ever imagined. It’s going to take a while for them to pull that many parts off the Cash for Clunker vehicles.
Once the vehicles are stripped, recyclers have to drain the oil and antifreeze. They have until early next year to send the first wave of clunkers to the wrecker.
I’m Mitchell Hartman for Marketplace.