Cash for Clunkers and Foreign Car Models

As the Cash for Clunkers program rolled on, there were some complaints that foreign auto models were selling at a much quicker pace than American-made cars. This led to a typical line of comments, particularly by folks who oppose any manner of government stimulus program, about how Cash for Clunkers wasn't doing much to help Detroit automobile manufacturers.

Nate Silver over at FiveThirtyEight.com has done his usual bang-up job of crunching the numbers and comes up with the graph below.

Notice, if you will, that the three major US auto makers - Ford, Chrysler, and GM - have significantly fewer of their available models that qualify to be purchased under Cash for Clunkers. So caught up in the massive profits of SUVs and trucks that they failed to hop on the fuel efficiency bandwagon, American manufacturers produced few vehicles that met the Cash for Clunkers required minimum of 22 miles per gallon.

Let's hope that this serves as yet another wake-up call for Detroit, and that they begin to crank out quality, high-mileage cars and SUVs. I'm ready for a new car - my Jeep was paid off in January - and if I want to buy American, I still don't have a lot of choices.

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Cash for Clunkers Put To Sleep

The feds announce that the "Cash for Clunkers" program will end this coming Monday, and a stimulated auto business alternates between gratitude and disappointment about how the program was executed.

There's just no pleasing some people.

If the goal of the program - as articulated at its launch - was to rapidly, and temporarily, stir up activity during a languid summertime car selling season surfing the wave of a terrible economy, then by most measures, Cash for Clunkers was a resounding success.

With more than 457,000 car sales tied to the incentives, and $1.9 billion in deals made by dealers, it's difficult to argue that some economic good didn't result from the program. Some will counter that the government's backlog of reimbursing dealers due to the crushing volume shows how ineffective a federal solution can be, or that shredding an 18 mpg car in favor of a newer 21 mpg model does less to protect the environment than, say, allowing someone who motors around in a 24 mpg sedan to trade it in for a Prius that gets 40 mpg.

But Cash for Clunkers was never meant to solve all problems, or to act as a poster child for how much the bureaucracy has changed execution-wise in the first six months of the Obama administration. That's moving the goal posts in order to find something about which to complain.

When KFC experienced a PR nightmare resulting from their poorly-executed grilled chicken - Oprah Winfrey partnership, with restaurants crushed under the unanticipated demand to the point that they ran out of product and needed to come up with a Plan B to assuage customer anger, no one said that fast food joints should cease all crazy promotions. Long term, KFC accomplished their goal - significant buzz about KFC grilled chicken and increased traffic to their locations. Heck, I even tried the one-piece grilled breast. It was awful.

Let's not gloss over the fact that Cash for Clunkers ran out of funding in the first month due to overwhelming demand, or that additional billions needed to be appropriated to keep the program running because of its continued success. And ending the initiative early because the second round of funding is almost exhausted seems prudent, too - don't spend money that you don't have.

$3 billion in deals in a couple of historically-slow summer car selling months, sales that have resulted in factories stepping up production to fill in the massive holes in dealer's inventories caused by tremendous sales of certain models, with the recall of several thousand auto makers from layoff to build more cars seems to be a pretty good investment. It's not perfect, but it beats anything else that was proposed.

Shame on KFC for not properly estimating how many people wanted to try their grilled chicken, and shame on the Obama administration for launching a program that helped drive staggering increases in new car sales during the worst recession in more than 60 years. Next time you guys plan on exceeding expectations, do a better job of predicting it.

I'm sure no one on FOX news will squawk if you fail to meet unrealistic stretch goals.