Spang
08-10-2009, 11:54 PM
DETROIT -- With the "cash for clunkers" program generating more than 245,000 vehicle sales in two weeks, car dealers intensified pressure on auto makers Monday to ramp up production.
Dealers around the country scrambled to find fuel-efficient vehicles that qualify for the program to fill their lots. They also voiced concerns that the extra $2 billion Congress approved for the plan last week won't last through September.
"I am trying to buy new cars wherever I can find them," said Alan Helfman vice president of River Oaks Chrysler Jeep in Houston. Mr. Helfman said he has 50 new vehicles on his lot compared with 320 normally. "Any bump in production would be fantastic."
Chrysler Group LLC has added shifts and overtime at some of its plants. General Motors Co. said it is likely to increase production, but hasn't made any decisions. Ford Motor Co. said it won't make any announcement until early September.
More than $1.03 billion has already been paid out to cover the 245,384 vehicles traded-in under the program designed to replace gas guzzlers with more fuel-efficient vehicles, according to the U.S. Department of Transportation. Another $2 billion is now being funneled into the program, which is slated to run through November.
Starting last year, the Big Three U.S. auto makers began to cut back production to cope with swelling inventories as consumers skipped purchases amid the recession. During the bankruptcies of GM and Chrysler, both auto makers idled their plants, further reducing supply. Heading into July, it appeared auto makers finally had control of their inventories.
That changed as the government's clunkers program set off a flurry of buying. Even consumers who didn't qualify for the program made purchases. Under the program, formally known as the Car Allowance Rebate System, a customer who trades in a vehicle rated at 18 miles per gallon or less qualifies for a government voucher of $3,500 or $4,500 to buy a new car rated at 22 mpg or more. The allowance goes to the dealer, who must scrap the old vehicle.
The average claim is $4,197, which means that more rebates of $4,500 have been paid than those for $3,500, according to the Transportation Department.
While Ford and GM are still weighing whether to boost production, Chrysler is taking a more aggressive approach. The auto maker, which is being managed by Italian auto maker Fiat SpA, notified workers at its Warren, Mich., pickup-truck assembly plant that they will work overtime on three Saturdays starting August 29, according to two United Auto Workers officials who received details of the plan but asked not to be identified. The plant produces Dodge Rams. More overtime could be scheduled in October, they said.
Also on Monday, Chrysler restored the third-shift to its Windsor, Ontario, minivan plant. The plant assembles the Dodge Grand Caravan, Chrysler Town & Country and Volkswagen Routan. The company ran its Toldeo plant -- home to the Jeep Wrangler -- on overtime last week.
Chrysler spokesman Max Gates had no comment on production schedules.
GM has said it would likely increase production if the clunker program continued, but no announcement has been made. A Ford spokeswoman said the company wouldn't discuss production plans until early September.
The Source (http://online.wsj.com/article/SB124994366663220753.html#mod=rss_whats_news_us)
Dealers around the country scrambled to find fuel-efficient vehicles that qualify for the program to fill their lots. They also voiced concerns that the extra $2 billion Congress approved for the plan last week won't last through September.
"I am trying to buy new cars wherever I can find them," said Alan Helfman vice president of River Oaks Chrysler Jeep in Houston. Mr. Helfman said he has 50 new vehicles on his lot compared with 320 normally. "Any bump in production would be fantastic."
Chrysler Group LLC has added shifts and overtime at some of its plants. General Motors Co. said it is likely to increase production, but hasn't made any decisions. Ford Motor Co. said it won't make any announcement until early September.
More than $1.03 billion has already been paid out to cover the 245,384 vehicles traded-in under the program designed to replace gas guzzlers with more fuel-efficient vehicles, according to the U.S. Department of Transportation. Another $2 billion is now being funneled into the program, which is slated to run through November.
Starting last year, the Big Three U.S. auto makers began to cut back production to cope with swelling inventories as consumers skipped purchases amid the recession. During the bankruptcies of GM and Chrysler, both auto makers idled their plants, further reducing supply. Heading into July, it appeared auto makers finally had control of their inventories.
That changed as the government's clunkers program set off a flurry of buying. Even consumers who didn't qualify for the program made purchases. Under the program, formally known as the Car Allowance Rebate System, a customer who trades in a vehicle rated at 18 miles per gallon or less qualifies for a government voucher of $3,500 or $4,500 to buy a new car rated at 22 mpg or more. The allowance goes to the dealer, who must scrap the old vehicle.
The average claim is $4,197, which means that more rebates of $4,500 have been paid than those for $3,500, according to the Transportation Department.
While Ford and GM are still weighing whether to boost production, Chrysler is taking a more aggressive approach. The auto maker, which is being managed by Italian auto maker Fiat SpA, notified workers at its Warren, Mich., pickup-truck assembly plant that they will work overtime on three Saturdays starting August 29, according to two United Auto Workers officials who received details of the plan but asked not to be identified. The plant produces Dodge Rams. More overtime could be scheduled in October, they said.
Also on Monday, Chrysler restored the third-shift to its Windsor, Ontario, minivan plant. The plant assembles the Dodge Grand Caravan, Chrysler Town & Country and Volkswagen Routan. The company ran its Toldeo plant -- home to the Jeep Wrangler -- on overtime last week.
Chrysler spokesman Max Gates had no comment on production schedules.
GM has said it would likely increase production if the clunker program continued, but no announcement has been made. A Ford spokeswoman said the company wouldn't discuss production plans until early September.
The Source (http://online.wsj.com/article/SB124994366663220753.html#mod=rss_whats_news_us)