Politicians Want to Use Tax Dollars to Crush Newer Model Trucks and SUVs; SEMA Warns Lawmakers That Boondoggle Will Cost American Jobs

/PRNewswire/ -- SEMA, the Specialty Equipment Market Association, is opposing an effort by some Washington lawmakers to include a national car crushing program in the upcoming economic stimulus package. Vehicles targeted for the scrap pile will likely include Chevy Blazers, Chevy Silverados, Chevy S-10s, Chevy Tahoes, Dodge Dakotas, Dodge Rams, Ford Explorers, Ford F-Series, Jeep Cherokees, Jeep Wranglers and any other SUV or truck that obtains less than 18 miles per gallon. Under the plan, the Federal government would pay a premium for 1999 and newer cars.

The so-called "Accelerated Retirement of Inefficient Vehicles Act" is cash-for-clunkers with a twist. Instead of focusing exclusively on old cars as is typical with scrappage programs, this bill will target any vehicle with lower fuel economy ratings. Participants will receive a cash voucher to purchase a more fuel-efficient new car or used car (MY 2004 or later) or receive credit for the purchase of public transportation tickets. Under the legislation, "fuel-efficient" means at least 25 percent better mileage than the CAFE standard. It will be illegal to resell the scrapped vehicles. Bill sponsors want to destroy four million pickups and SUVs over the next four years.

The program will fail to achieve its goal of improving fuel efficiency and stimulating car sales, but will increase unemployment and the cost of used cars and parts. Here's why:

-- Given the minimal $1,500-$4,500 voucher value, the program will lure
rarely-driven second and third vehicles that have minimal impact on
overall fuel economy and air pollution. This is not a wise investment
of tax dollars.
-- The program will reduce the number of vehicles available for
low-income individuals and drive up the cost of the remaining vehicles
and repair parts. This is a basic supply-and-demand reality.
-- The program will remove the opportunity to market specialty products
that are designed exclusively for the targeted pickups and SUVs,
including equipment that increases engine performance and fuel
mileage. Congress will be enacting a program to eliminate jobs and
reduce business revenues in the automotive aftermarket.
-- The idea that the trucks and SUVs must be scrapped in order to save
energy is irrational. The program's "carbon footprint" does not
factor in the amount of energy and natural resources expended in
manufacturing the existing car, spent scrapping it and manufacturing a
replacement car.
-- The program fails to acknowledge driver needs, such as the ability to
transport a family, tow a trailer or rely upon the performance, safety
and utility characteristics associated with the larger vehicles.
Instead, these vehicles will be destroyed.
-- There is no evidence that the program will achieve the goal of
boosting new car sales or increasing fuel mileage. Many states have
considered scrappage programs in the past as a way to help clean the
air or increase mpg, but abandoned the effort because they simply
don't work. The programs are not cost-effective and do not achieve
verifiable fuel economy or air quality benefits.
-- The program will hurt thousands of independent repair shops, auto
restorers, customizers and their customers across the country that
depend on the used car market. This industry provides thousands of
American jobs and generates millions of dollars in local, state and
federal tax revenues.

"Our members, like all business entities, are suffering the effects of the stalled economy," said Steve McDonald, SEMA's Vice President for Government Affairs. "In fact, for our members that market product for newer vehicles, we depend on a thriving and vibrant auto industry to create new business opportunities. We support efforts to spur new car sales. We don't, however, support public policy efforts that we are convinced don't work and will waste tax dollars in the process."