Reimbursements trickle in, clunker destruction begins

By Carolyn Roy - bio|email

SHREVEPORT, LA (KSLA) - Some gas guzzlers are finally beginning to meet their federally-mandated fate, now that the government has begun sending reimbursements to dealers to cover trade-in incentives under the "Cash for Clunkers" program.

At Chevyland on Tuesday, it was a 2001 Nissan Pathfinder sentenced to automotive death by sodium silicate. "That's the 'death juice,'" says Shop Foreman Steve Thompson.  "One quart of liquid glass and about a quart and a half of water and that does the trick every time!"

Dealers have been directed by the federal government to ensure these clunkers and their parts stay of the road, permanently.  As Thompson pours the clear liquid of clunker death into the engine, Inventory Manager Blake Powel revs the RPMs as other shop employees gather and look on in a mix of amusement and curiosity.

"The first we did, we had a pool to see who would get it, and how long it would last," Thompson recalls.  I think I bet 6 minutes for a buck, and everybody else did 15 or 20.  It went 29 seconds."  The Pathfinder was gone in less than 60 seconds.  "It kills 'em pretty quick, because what we're pourin' in is liquid glass, basically, just locks the bearings down and shuts the engine down."  Destroyed clunkers can be sold for scrap, but the remains must be crushed within a few days.

Before dealers dared to destroy their first clunkers, they had to wait for the government money to arrive. Auto dealers have complained that the Obama administration has been slow to pay them for the car purchase incentives of up to $4,500. Powell says it took about a month for their first clunker deal approval.    "A lot of nailbiting. When you've got over $200,000 just layin' out there in the wings, it's a little nervous."

This is the third of four clunkers approved and paid for by the government so far at Chevyland.  Seven more are approved and waiting on a check.  39 more are still waiting for approval.  But even if a few don't make the clunker cut, General Sales Manager Bubba Winningham says he won't be demanding their owners take them back.

"We're prepared, in case we missed one and it doesn't get approved for whatever reason, we're prepared to sell it at whatever we can get for it at the auction and just absorb the loss to our business."

Whatever loss that might be likely won't compare to the overall gains enjoyed by Chevyland and others across the country, after seeing sales leap and inventory sell out.

The rebates led to 690,114 new sales at a taxpayer cost of $2.88 billion.  The program, which provided incentives of $3,500 or $4,500 for consumers to trade in a gas-guzzler for a new, more fuel-efficient car or truck, boosted car sales during the summer. U.S. auto sales rose to 1.3 million vehicles in August, a 30 percent increase from July and the first monthly year-over-year gain since October 2007.

Last week, the government announced it had approved $500 million in reimbursements to car dealers for sales under the Cash for Clunkers program and dealers should be paid by late September.

According to the Associated Press, a transportation official said 120,000 submissions from dealers, or about 17 percent, have been approved under the program, which ended on Aug. 24. The official, who spoke on condition of anonymity, was not authorized to speak publicly about the data before a congressional briefing.

All eligible and completed dealer submissions should be fully paid by Sept. 30, the official said. The official said the government is ramping up staff and 5,000 workers will be reviewing paperwork by the end of next week. About 3,000 government and private sector workers are currently working on the project.

The official said the department expects to be approving $100 million per day by the end of next week. Department officials told congressional aides that dealers should be reimbursed within 3 days of their deals being approved.

©2009 KSLA-TV. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.