Jul31
CARS cash-for-guzzlers, House approve s $2 billion more
WASHINGTON -- The House passed legislation to inject $2 billion into cash for clunkers after the administration reported that the $1 billion federal program was running out of money shortly after it began. The bill, which goes to the Senate next week, would transfer the new money from a U.S. loan-guarantee program for renewable energy systems that was funded under the stimulus package earlier this year. Lawmakers mobilized in less than 24 hours with the Obama administration’s support to draft, introduce and pass the bill on the last day before they break for a five-week recess. “This is the first glimmer of hope we’ve seen in the auto industry,” House Appropriations Committee Chairman David Obey, D-Wis., who sponsored the bill, said on the House floor. The measure passed 316-109. The rapid success of the $1 billion program lifted prospects for an industry beset by abysmal sales, bankruptcies and uncertainty. "The downward spiral has been broken. We saw a stabilization in sales in the second quarter, and there will be a recovery in automotive sales," Mike Jackson, CEO of the largest U.S. dealership group, AutoNation Inc., said in an interview. "There's no question about it." Automakers are due to report U.S. sales on Monday. European model The cash for clunkers program was modeled after similar government incentives in Europe, and offers consumers up to $4,500 to trade in older and less fuel-efficient vehicles to be scrapped. A preliminary analysis by the Transportation Department shows that dealers sold 250,000 vehicles with the government benefit since July 1. The program began in earnest a week ago, when rules were released. Officials said brisk sales exhausted the $1 billion that Congress had made available through Nov. 1. The effect that the plan will have on the economy is unclear. Analysts have said they expect it to give the economy a bit of a lift in the current quarter. Obama administration officials considered suspending the program but opted to keep it going through the weekend while options are considered. Scramble Leaders in the U.S. House of Representatives and Senate worked quickly with White House support to craft legislation that could be approved before Congress left for its month-long summer vacation. The House is due to recess on August 7.
"We feel confident that we'll have a solution that people can agree on moving forward and that the program continues," White House spokesman Robert Gibbs said. The amount of the proposal could change as it moved closer to a vote.
In addition to stimulating sales, the program was aimed at boosting sales of General Motors Co. and Chrysler Group, both of which restructured under bankruptcy protection this year. Fuel efficiency terms of the program were narrow enough to help domestic manufacturers qualify. But Senators Dianne Feinstein and Susan Collins have said any extension must include stricter efficiency and environmental requirements. They were asking the Transportation Department on Friday for details on sales data such as makes and models sold with program rebates. Very early indications showed that cars were selling better than pickups or SUVs. But it was unclear how the program had affected Toyota Motor Corp. and Honda Motor Co., makers of some of the most fuel-efficient cars.
Analysts expected the program, if utilized fully, to push U.S. sales above 10 million units for 2009, higher than the annual rate so far this year.
SOURCE: [ Automotive News ]
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