Saturday, August 1, 2009

Cash For Clunkers-No Reuse of Parts

The federal governments "Cash for Clunkers" program is a huge success. It is stimulating the economy with new car sales and reducing carbon emissions by taking high miles per gallon vehicles off the road.

But a negative by-product is the government is requiring that the cars be sent to scrap with no opportunity to sell the used parts for vehicles still on the road that need repair. Here is the AP article.

We will also have to watch what this program does to the steel markets. The additional scrap on the market combined with lower demand may depress the markets and make profitability harder.

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