Successful Stimulus? Say It Ain't So

The verdict is in. The federal government's $3 billion "Cash for Clunkers" program—which ended its month-long run on Monday—has been a success, at least according to The Washington Post. The paper notes that more than 690,000 new vehicles are hitting the roads because of the program, with a corresponding number of older (and likely less fuel-efficient) cars and trucks being retired in the process.

More impressive in these gloomy times is the hiring picture: one analyst quoted in the Post piece claims that the program has saved some 39,000 jobs from elimination. So overwhelmed is GM with orders that it's reinstating 1,350 workers and adding overtime for 10,000 more. Salvation, at least in the short-term economic sense, has arrived in parts of the manufacturing belt, with knock-on effects sure to follow.

While the WaPo writer clearly enjoyed a name-brand microwaveable breakfast sandwich before writing about the program, it would appear that the folks over at BusinessWeek's Auto Beat column awoke to a dispiriting bowl of generic cereal and sour milk. In addition to quoting a J.D. Power survey that suggests as many as 70 percent of the sales under the program may have happened without it, the Auto Beat piece ends with the following dispiriting analysis: "Cash for clunkers came and went in about two months. But now automakers must sell in an economy whose fundamentals are still weak. It will be a tough road for some time to come."

Some stats on the program:

• Total number of transactions: 690,114 (Dept. of Transportation)
• Total value of rebate applications: $2.877 billion (Dept. of Transportation)
• Eight of the top 10 new cars purchased under the program were made by Asian automakers (The Washington Post)
• "All of the top 10 clunkers turned in were made by a Detroit company" (The Washington Post)
• "Toyota was the biggest beneficiary, getting 19.4% of sales, with General Motors getting 17.6% and Ford getting 14.4% of sales from the program." (BusinessWeek)
• "84% of trade-ins under the program are trucks, and 59% of new vehicles purchased are cars" (Dept. of Transportation)
• "The average fuel economy of the vehicles traded in was 15.8 miles per gallon and the average fuel economy of vehicles purchased is 24.9 mpg. – a 58 percent improvement" (Dept. of Transportation)

Associated Press/Tony Dejak

--Posted by Phil Stott, Vault Staff Writer