The auto recycling industry has raised concerns
about the proscribed method required to disable
the engines of vehicles that are being turned in
as part of the federal government’s Cash for Clunkers
To learn more about the situation facing the industry,
American Recycler queried Herb Lieberman, a former
Auto Recyclers Association (ARA) president, who
is currently LKQ Corporation’s corporate industry
The Cash for Clunkers legislation requires that
the engines of vehicles that qualify for the
program must be disabled. What method do they
require for the disabling of the engines and
has this negatively impacted the recovery of
parts for resale or those set aside for scrap?
Lieberman: Per the C4C regulations, the dealer
is required to disable the engine by draining the
engine oil and adding a chemical which renders
the engine inoperable. During this procedure many
other internal parts of the engine are compromised
and of no use except for metals recycling.
This negatively affects the resale of those parts
for both direct reuse or for rebuilding or remanufacturing
purposes. Some of those parts such as the engine
block and cylinder head are prohibited by the C4C
law to be made available for any use except for
Was the auto recycling industry consulted prior
to the writing of the regulations in the legislation
as to how they would impact auto recycling operations
in terms of processing vehicles and financial issues?
Lieberman: The Automotive Recyclers Association
was very involved in both the legislative and rule
making process. For sure it did not get all that
it felt was in the best interest of the C4C program,
the consumers or the motor vehicle recycling industry
but many of its suggestion were incorporated in
It was through ARA’s efforts that all parts of
the “clunkers” could be made available for reuse,
rebuilding or remanufacturing except for those
specific items contained in the legislation.
What are the positive and negative effects of the
cash for clunkers program in regards to the auto
Lieberman: The positive effects for the automotive
recycling industry are quite simply if the program
were able to keep people working in other industries
and in some way help the economy and the consumers
then the recyclers would benefit indirectly by
doing its part. On the negative side it took away
potential customers for parts to keep the “clunkers”
in safe drivable condition. Many of those “clunker”
owners were our customers. We also saw this as
a temporary “fix” to spur car sales, which it did,
and only time will tell if its effects will have
long-term positive results.
What changes would the auto recycling industry
recommend in order to remove the problems associated
with the regulations?
Lieberman: I cannot speak for what changes the
motor vehicle recycling industry would seek to
mitigate the negatives. But as a recycler myself
for over 50 years, I am a believer in the market
place establishing its own goals and programs to
deal with sales promotion as well as industrial,
ecological and consumer benefit.
As I understand it, this is just what is happening
in Canada at the moment with GM implementing their
own C4C programs in concert with the recycling
The cash for clunkers program in Germany did not
require that engines be disabled and that they
could be disassembled for parts. What are the advantages
of the German program and would it be possible
for the federal government to adopt those measures?
Lieberman: You are correct that in Germany the
engines did not have to be taken out of the stream
of commerce. ARA advocated for the same consideration
in the United States program, but it was not accepted.
I believe this will have long-term negative effects
on the consumer that can least afford it to have
to opt for more expensive repairs because these
parts will not be available.