Re: [AMC-list] cash for clunkers

[Frank Swygert <farna@xxxxxxx>]

The idea that an entire car could be recycled AS a car again got me to wondering about cost and such a few years ago. I did a bit of research (admittedly with a lot of "guesstimates" for some pricing, but based on reasonable research) on that. The goal was to take a fairly common mass-market car like the GM A body (82-96 Chevy Celebrity, Pontiac 6000, Olds Ciera/Cutlass Cruiser, Buick Century) and totally rebuild them into like-new cars. The A body would be easy to change the looks since the body shell has a flat front and back with a relatively thin fascia. While the main car looks the same across the board, the fascias changed enough after several years and between brands that the cars were easy to face-lift -- exactly what the designers had in mind. It's a nice mid-size car that was reasonably well built too. When supplies started running low (how many were built in 14 years though -- this was GMs bread-n-butter car for most of that time) the plant would have to be able to
 gear up to the next line (Maybe Ford Taurus?) to run for a few years. A trade-in structure would help too -- only take trades on the models being rebuilt, or better pricing for them.  

My informal "study" did not include infrastructure. The goal was to determine the cost of rebuilding a car, not start-up capital. If the cars could be rebuilt at a reasonable profit, then something like that could be done. I figured it would have to be a reasonably large scale operation -- something on the order of 10,000 cars a year, which would make it a regional thing. I don't think it could be done profitably without rebuilding in the thousands due to parts pricing (volume discounting) and setting up for all that work. It might work with as few as 100 a month (1200), but that's the lowest I'd go. At that volume it would be hard to get insurance and financial industry support, though you might be able to make a deal with one of the large banks or financing operations to finance them as new. Insurance probably wouldn't be a problem, but companies might want to insure it as a 1985 Ciera instead of a 201x "new" car, or rather pay off as that if it were totaled. THAT would be 
a problem! The remanufacturing company would need the insurance industry to start with the remanufactured price then depreciate the percentage of a normal new car, or at least close to that. 1-2% faster depreciation shouldn't hurt much, I'd be most concerned about the first 2-3 years of ownership. Of course the operation might be able to secure insurance through a specific company at first for the cars -- such a deal would be possible, though it would also limit the customer and would be a deterrent to buying -- as would financing as a used car. 

I started with a reasonable price to get the cars. These could literally be junkers -- the main objective is a solid body shell. The plastic fascias would be removed and new ones made to give the cars a distinctive new look. Drivetrains would be overhauled, but that would be farmed out to a major rebuilder, who could even set up operation right on the spot. Some drivetrains would need to be replaced and/or updated, but the goal would be to avoid totally new -- at least use the short block assembly, preferably head and other major castings also. All wiring would be replaced, and as much of the discarded material recycled as possible. You might think that wiring harnesses could be inspected and re-used, at least in some cases, but that gets into safety and labor cost issues. Every major stamping and casting would be reused, all wear items (including upholstery) would be replaced. As parts were pulled those that could be rebuilt would be sent to their respective areas or outside
 contractor (preferably with facilities near or on the compound) and brought back for final assembly. I figure 75-80% of the car could be rebuilt or recycled once stripped. The stripped shell would be cleaned then inspected, and repaired as necessary. EVERYTHING would have to be disassembled, just like a good restoration.

The final result was that it COULD be done provided insurance/government/banking would accept and finance it as a new car. Even if they demanded a "remanufactured" label be put on the car (I would anyway) and/or title, as long as it could be insured and financed like a new car that shouldn't be a problem -- it's not like a salvage title (or shouldn't be... COULDN'T be!). As long as that particular model were being remanufactured resale value should be reasonable also, but would drop if models changed just as they usually do when new ones change now.

The problem was cost. What you'd end up with is a remnaufactured mid size car for the cost of a brand new small car. In today's terms, you could buy a brand new 2009 Cobalt or a remanufactured 1990s Celebrity. Only it would be called something else, and be face-lifted and modernized in some respects, so it wouldn't be exactly that, but that's how many people will see it. I padded my informal cost analysis a bit, using 10% under retail costs for parts from places like Rockauto. I think that a standing order from various suppliers would garner better pricing than that, but I was figuring worse case scenario. 

I just don't think there would be enough buyers, at least not long term. If you update too much, say turn them into hybrids or replace the entire engine with new, costs rise. Might not be a bad idea to offer a newer model "crate" engine, especially if someone like GM or Ford was running the operation, but that would partially defeat the recycling goal. I think the concept has merit, but would be better suited to a regional operation, but with the shrinking of the US manufacturers, maybe it WOULD be a good "bottom line" car for GM... then concentrate on new higher end models. 



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Date: Tue, 7 Jul 2009 00:00:32 -0400 (EDT)
From: adh@xxxxxxxxxxxxxxxxx (Sandwich Maker)

secondarily, it's also anti-ecological.  the federal epa did a study
in the '90s that determined that the greenest thing you can do with an
old car is keep it on the road.  there's a tremendous hidden cost, in
both energy and pollution, in manufacture and disposal of a car.
before that, the ca epa did a state study and concluded that all old
cars and trucks - in a state where cars last a looong time - emitted
less pollution than only the newer cars that failed state inspection.

--
Frank Swygert
Publisher, "American Motors Cars" 
Magazine (AMC)
For all AMC enthusiasts
http://farna.home.att.net/AMC.html
(free download available!)


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