'Cash For Clunkers' Worries Auto Recyclers

Manufacturing.net (7/28, Tsai; AP) – Not all auto recyclers are relishing the government's new cash for clunkers program, which requires car dealers to destroy the gas-guzzlers they get as trade-ins from new car buyers. Used engines and drive trains are a big part of recyclers' income from each scrapped car, and under the federal program those engines must be destroyed. The idea is to promote fuel efficiency and help automakers, but it comes at a time when more than a dozen U.S. auto parts suppliers have filed for bankruptcy this year.

Engines and drive trains account for 60 percent of recyclers' revenue from a used vehicle, Wilson said. Under cash for clunkers, the government is advising car dealers to replace a trade-in's engine oil with a sodium silicate solution and run the engine to ruin it before giving or selling the car to a scrap dealer. The Automotive Recyclers Association says that can damage otherwise sellable parts like pistons -- and mean smaller profits for scrap yards, considering it can cost $700 to $1,200 to process a car, including transport and removing toxic items like mercury, Wilson said. Recyclers' profits vary but can reach several hundred dollars for a 6-year-old car.