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USA - Cash for Clunkers - Saving CO2, or just making more cars ?

Excerpts from an Article by Terry Gray, chairman of Find-a-Part Ltd - Car Parts Search Specialists Since 1978.  Full Article is available here, and you can check out the Green Footprint news feed here :

I have during my 40 years of working within the motor industry seen many legislation changes launched by those politicians we actually vote into office. Like many of the thousands of Professional Businesspeople I know who are engaged in the business of Decontaminating Vehicles and Providing Quality Recyled Auto Parts I often wonder if some of our so called leaders or their advisors have ever lived in the same world as us mere mortals.

$15,000 Fines, Huge anomolies and holes in the basic concepts, One Billion US Dollars and 50 Million US Dollars for "administration".  When will politicians realise that the Professional Auto Recycling Industry is a Multi Million Dollar Industry with the potential to benefit the Environment.  Replacing a worn out Engine in a so called clunker with a lower mileage, Tested, Guaranteed Recycled Engine would not sell more new Cars but would save CO2 by the bucketload.

My personal observation is that In their rush to bring in bills which are designed in part to "Move New Vehicles and help manufacturers" as well as "Attempt to help the Environment" virtually every Government in the world who has created a "Clunker or Scrappage Scheme" has missed some very simple facts of what happens out there in the real world.

The most obvious fact is that vehicles up to 25 years old and liable to be used as an "eligible trade-in vehicle" are also liable to have had many parts replaced, not least of which is likley to be the "Engine" In the UK there is a central vehicle registration Centre called the DVLA where every Vehicle in the UK has its registration plate Issued and by the rule of Law if a replacement engine is fitted then the DVLA is supposed to be informed.

In the real world however the majority of Garages, Replacement Engine Fitting Centres or DIY Motorists ignore this requirement.  It follows therefore that a search on the VIN Number at the DVLA in the UK on a "Scrapped Vehicle" would result in a high chance of their being a mismatch on Vin and Engine Number Details.

In the USA each state has its own Vehicle Registration Centre and the combination of intertrading of vehicles state to state and a similar attitude to informing the relevant authoritie/s regarding Engine Number Changes a virtually nightmare of potential fines of $15000 could unfold especially on the Genuine Professional Auto Recycler.

This situation in the US especially could be caused by any circumstances by which the Engine of a Vehicle has been changed and that fact not known to the Vehicle Owner, missed by the Dealer only for the Genuine Recycler having removed it to discover it is in fact a replacement and mismatched to the VIN.  In fact the problem may even expand itself outside of the ring of Vehicle Owner, Dealer and Recycler involved in a single Cash for A Clunker Transaction.

Imagine for example if the engine has been replaced and the original engine has years ago entered or subsequently enters the "Core and Reconditioning Market", what then happens to the unfortunate Genuine Auto Recycler entwined in an investigation.

Car Parts companies - winners and losers 2009

Car Parts companies have been among the worst hit businesses during the recent recession.  Here we look at some of the winners and losers.

Ford Part maker and former subsidiary Visteon went into chapter 11 bankruptcy on May 29th.  This followed the closure of the UK based car parts factories, which according to Visteons' wikipedia page were never profitable, and were closed as a result of the USA operation being unable to support them financially.  At the time of the administration, Visteon listed total assets of $4.58bn (£2.88bn) and total debts of $5.32bn.  Ford has opted to help Visteon through the bankruptcy with debtor in possession finanacing, which should give Visteon a clean slate, albeit under strict financial conditions.

There is a meeting to discuss a £250 million pound deficit in the Visteon UK workers' pension scheme, which is being held on July 8th.  Further details are available here.

GM and Ford Parts Maker Lear Corp filed for bankruptcy on July 2nd 2009.  Lear is a supplier of seating, electrical, flooring, interior trim, instrument panels, etc., to OEM auto companies, with General Motors and Ford representing 40% of its customer base, and has been hit especially hard during the downturn, as indeed GM has with its own banruptcy proceedings.

Car Parts manufacturer Meridian Automotive Systems is closing a central Indiana factory for an indefinite period, putting 295 people out of work.

Last year, Lucas Car Parts went out of business, after a takeover by Euro Car Parts was due to occur, eith Euro Car Parts pulling out at the last minute.

Car parts maker Magna International has reached an agreement in principle to rescue GM Europe, owner of Opel and Vauxhall, reports say.

The agreement was reached with General Motors, but is subject to the approval of the German government, which will be providing funding to the new owner.

Magna appear to be one of the few winners during a period of great uncertainty in the car parts manufacturing industry.

Car Parts - Engine Requests, Popularity by Manufacturer / Make, Jan - June 2009

Top 10 Manufacturers for Engine Requests (Jan 1 - July 1) Here are the top 10 car part manufacturers based on the requests taken in the first 6 months of 2009 by Find a Part.

1 - Vauxhall Engines - Vauxhall Astra, Vauxhall Corsa, Vauxhall Vectra, Vauxhall Zafira, Vauxhall Combo
2 - Ford Engines - Ford Focus, Ford Mondeo, Ford Fiesta, Ford Transit, Ford Escort
3 - Vw Engines - VW Golf, VW Passat, VW Polo, VW Transporter, VW LT35
4 - Renault Engines - Renault Clio,Renault Megane,Renault Espace, Renault Laguna, Renault Scenic
5 - Peugeot Engines - Peugeot 306, Peugeot Expert,Peugeot 206, Peugeot 307,Peugeot 406
6 - Toyota Engines - Toyota Avensis, Toyota Corolla, Toyota Celica, Toyota Previa, Toyota MR2
7 - Fiat Engines - Fiat Punto, Fiat Ducato, Fiat Doblo, Fiat Ulysse, Fiat Brava
8 - Audi Engines - Audi A4, Audi A6, Audi A3, Audi TT, Audi 80
9 - BMW Engines - BMW 320, BMW 318, BMW 316, BMW 520, BMW 525
10 - Rover Engines - Rover 75, Rover 25, Rover 45, Rover 216, Rover 214

High demand for parts for a certain model of car is as likely to be as a result of the popularity of that car as it is related to any reliability issues, no comment is made on the reliability of any of the cars listed above.

Report compiled by Find a Part - Car Parts Search Specialists since 1978.

Car Parts Manufacturer closes Indiana factory

Car Parts manufacturer Meridian Automotive Systems is closing a central Indiana factory for an indefinite period, putting 295 people out of work.  This announcement comes less than month after Meridian announced a planned layoff of 198 people at the plant in stages over the summer.  This news follows continues a horrific trend in the auto parts industry, with Lear Corporation (GM and Ford parts supplier) and Visteon ( Ford Parts supplier ), both filing for bankruptcy within the last 3 months.

The Michigan based company had said then that the layoffs were necessary because it had lost a major customer, which it did not identify. Meridian has made various parts for several auto companies, including General Motors.

Report compiled by Find a Part - Car Parts search specialists since 1978.

USA used car prices improve

Manheim Consulting have reported that wholesale USA used vehicle prices are 5.8% higher than this time last year, and 16.4 % up on Jan 2009. Manheim state that the increase in used car value has come without a downside so far, but that the cause of higher prices does "stem from a negative, namely, the significant reduction in potential supply" of new cars, which are after all tomorrows' used cars.

Manheim also gives a year-on-year "market class" price change, the biggest increases were on Pickups (27% rise) and SUVs (25.8% rise), the biggest losses were from Compact cars (9.9% fall) and Midsize cars (3.4% fall). The full list of market classes and value changes is below :

Pickups - 27 % price rise
SUVs - 25.8 % price rise
Luxury Cars - 10.3 % price rise
Vans - 6.8% price rise
Midsize Cars - 3.4% price fall
Compact Cars - 9.9% price fall

Report compiled by Find a Part, Used Car Parts Search Specialists since 1978.

GM & Ford Car Part Maker Files For Bankruptcy Protection

GM / Vauxhall Car Part and Ford Car Part supplier Lear Corporation has filed for bankruptcy protection today, as detailed by the Huffington Post. Lear follows Visteon as the second major car parts supplier to go into bankruptcy this year, Visteon filed theirs in May.

Car parts suppliers have been hammered by the economic downturn as consumers continue to avoid new car purchases, and car makers have slashed production. Lear has been particularly hard hit by the slump, with 36 percent of its sales coming from North America and 49 percent coming from Europe.

Lear, which posted $13.6 billion in sales for 2008, is a key car parts supplier for both General Motors and Ford, they are the company's two largest customers and account for a combined 40 percent of its sales. Lear was expected to become bankrupt after missing an interest payment on its' bond debt last week. Based in Southfield, Michigan, the company listed $1.27 billion in assets, and $4.54.billion in liabilities.

Car Parts Requests - Most Popular 2009 (1 Jan - 31 June)

Here are the 10 most popular models of car that we have taken car part requests for in the first six months of 2009.  We have also listed the most popular parts for these vehicles.

1. Vauxhall Astra Parts - Engine, Alternator, Radiator, Turbocharger
2. VW Golf Parts - Gearbox, Engine, Turbo, Starter Motor
3. Ford Mondeo Parts - Front Bumper, Rear Bumper, Engine, Turbocharger
4. Vauxhall Corsa Parts - Engine, Bonnet, Alternator, Front Bumper
5. Ford Focus Parts - Engine, Front Bumper, Gearbox, Turbocharger
6. Ford Fiesta Parts - Engine, Front Bumper, Alloy Wheel, Gearbox
7. Vauxhall Vectra Parts - Engine, Gearbox, Alternator, EGR valve
8. Renault Clio Parts - Engine, Bonnet, Gearbox, Front Bumper
9. Peugeot 206 Parts - Gearbox, Rear Axle, Bonnet, Starter Motor
10. Renault Megane Parts - Engine, Front Wiper Motor, Gearbox, Turbocharger

This list reflects the popularity of the models shown in the UK car market, rather than any indication of reliability.

This report was compiled by Find a Part Ltd, Car Parts Search Specialists since 1978.

Car Parts Firm ( Land Rover, BMW, Peugeot ) - 25 Jobs Saved !

Car Parts Supplier Stadco, in Llanfyllin, Powys, Mid Wales, has saved the jobs of about a quarter of the 106 workers who were facing redundancy.  Last December the car parts supplier blamed the recession for making 106 of its 153 workers redundant.  But the company has found additional work which will mean a cut of 25 in the redundancy total.

The company is part of the Acertec car parts firm which supplies Land Rover, BMW and Peugeot.

Stadco, also has car parts plants in Castle Bromwich in Birmingham, Coventry, Shrewsbury and Saarlouis, Germany.

A company spokesman said the reduction in the number of redundancies was an indication of the value the company placed upon the Llanfyllin car parts plant.  But he said they could not make any promises about the company's long-term commitment to the factory near Welshpool.

Local councillor Peter Lewis said he was delighted by the news - "This means that rather than two-thirds of the workforce being cut it is now down to about half.".

Llanfyllin is a small market town about 15 miles (24km) north of Welshpool. It has a population of 1,400 people.

Report Compiled by Find a Part - Car Parts Search Specialists since 1978.

Car Scrappage Scheme - Unfortunate Impact ?

The car scrap scheme that has been mooted for months by government ministers today came into effect in the Budget.  A similar scheme was introduced earlier this year in Germany, and resulted in a 40% increase in car sales, compared to a 30% downturn in the UK.  Had ministers not acted, the scrappage scheme might have arrived in the UK through the back door anyway, with Citroen already offering £2000 back for cars that qualified for their scrappage scheme,  However, key car industry commentators are worried about the potential impact of the car scrap scheme.

For RAC Foundation Director Professor Stephen Glaister, the scheme could have some good, and some bad effects, speaking to BBC News he said - "If the scheme leads to a reduction in the average age of the national car fleet then this has to be good for road safety as more modern cars will have a wider range of safety features built in.".  However, on the negative side he said : "Currently the vast majority of cars are still on the road at 10 years old.  Indeed at 14 years old, half are still on the road.  The car scrappage scheme announced today risks consigning a lot of perfectly good, and relatively clean, vehicles to the dustbin.".  The environmental impact of this scheme may create future problems that we are as yet unaware of - what will happen to the cars that are sent to the scrap yards ?

BVRLA chief executive John Lewis also held concerns for the used car industry in the UK : "Unfortunately, our ministers have chosen to follow the German model, which has been widely criticised for decimating the country's used car industry." - Mr Lewis predicts that companies will hold onto cars for longer, rather than selling them cheaply.  Spare car parts suppliers and garages could also suffer from a fall in demand resulting from the mass-removal of old cars from the market, as the population of cars in the country becomes younger.

This report compiled by Find a Part - Car Parts Search Specialists Since 1978.

Car Parts (Ford) Workers reject "Derisory" Visteon Offer

Former car parts workers at the Visteon plants in Belfast, Basildon and Enfield have rejected a "derisory" offer of cash payments from their former employer, according to BBC News Northern Ireland.  The Ford car parts maker Visteon Corporation has said most employees would receive a cash payment equivalent to 16 weeks pay.

A Unite union spokesman said that it added "insult to injury.".  A Visteon spokesman said that as well as the immediate cash payment - "Over time additional payments would be made increasing their total severance package to the approximate amounts they would have received under their most recent contract."

The protesting car parts workers in Belfast and Enfield have staged factory sit-ins to highlight their situation.  The Unite union spokesman said that the sit-ins had forced the company to the negotiating table as it wanted to sell the stock that was sitting in the factories.

"It may well be that our fight has to move on to Ford, but the sit-in is important at the moment," Unite spokesman Roger Madison said.  However a Ford spokesman said that the company has no responsibility for former Visteon workers - "Since 2000, Visteon has been an independent company supplying parts to Ford. Ford has no contractual or other responsibility towards the Visteon UK workforce.  The decision made regarding the plants in Belfast, Basildon and Enfield was made by Visteon's management and not by Ford Motor Company.  Ford has acted responsibly and met, or exceeded, its commitments under the Visteon agreement of 2000."

In the mean time, some former car part plant workers have staged peaceful protests outside the homes of Visteon managers in Lisburn and Downpatrick.  Pickets were held on Monday and again on Wednesday.  Nearly 600 jobs were lost at the three car part plants - 210 in Belfast - with staff being given less than an hour's notice.

The workers said that they were given pay and conditions guarantees when the company was split from Ford nine years ago, and will only leave when they are offered an adequate deal.  Former car parts plant workers in Northern Ireland also picketed Ford showrooms over the Easter weekend as well as staging a sit-in at the Visteon plant in Finaghy.

This report compiled by Find a Part - Car Parts Search Specialists since 1978.