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Full of Scrap: Auto recyclers push to retain home-state shredder feed

Keywords: Tags  Full of Scrap, auto recyclers, auto shredding, Automotive Recyclers Association, Lisa Gordon

A trend is quietly emerging among auto recyclers to prevent the largest source of shredder feed from taking an interstate trip.

While auto wreckers want to restrict out-of-state buyers ostensibly to protect motorists by preventing unsafe cars returning to the road, one has to suspect that it also might have something to do with protecting the viability of their businesses.

The $25-billion automotive recycling industry, comprised of some 7,000 operations, is the 16th largest industry in the United States, according to the Automotive Recyclers Association. With auto recyclers accounting for one-third of recycled metal in the United States, a lot of money and jobs could be driven out of town if laws are changed.

Michigan was the first state where auto salvagers lobbied to stall a move that could have flattened their revenue and cost jobs by increasing competition. With 14 hungry shredders in the state, competition for vehicles is fierce and recyclers were determined to protect their interests. After coming under fire from auto recyclers, the Michigan House Transportation Committee in December canceled a hearing on two bills to amend the state’s salvage statutes to eliminate salvage agents and allow unlicensed bidders from anywhere in the country to purchase vehicles that will be scrapped.

"The legislation threatens quality jobs in the auto recycling industry, allowing foreign buyers operating at lower costs to purchase and remove vehicles from Michigan, and negatively impacts in-state auto recyclers by sending jobs out of state to foreign buyers," the Colleyville, Texas-based Automotive Service Association had said.

In Utah, recyclers put a slightly different spin on it. The Utah Automotive Recyclers Association (UARA) successfully managed to convince legislators to pass a bill that excludes out-of-state businesses from coming to the dance. The legislation restricts auto salvage auctions to those with valid Utah business and sales tax licenses, as well as defining a category of vehicles that can’t be returned to the road.

"(We are) heartened by evidence that a growing number of legislators all across the country recognize the dangers of opening up automotive salvage pools to unqualified purchasers. The UARA strongly supports restricting the auction of total-loss vehicles to in-state, qualified buyers who are licensed and have track records of responsible environmental stewardship," the UARA said, noting that limiting access to in-state bids preserves jobs while ensuring that vehicles are disposed of in an environmentally responsible manner.

Obviously, the environmental disposal choice includes the state’s three shredders.

"Lawmakers all across America are paying increased attention to the dangers that arise by opening up auto salvage pools, and they are taking steps to roll back efforts to make it easier for these vehicles to fall into the wrong hands," the UARA said, noting that Florida has joined the trend.

In Florida, amendments were added to House and Senate legislation to eliminate a rule that a certificate of destruction must be issued for any vehicle sustaining 80 percent damage; if enacted, vehicles with even 90 percent damage could bypass the shredder and return to the road. While the move would not have restricted out-of-state buyers, it could have jeopardized the totaling of some vehicles by allowing them to be repaired. The Florida Automotive Dismantlers and Recyclers Association opposed the proposal, and the Senate version of the bill died in March.

The Internet Crime Complaint Center sifts through 25,000 complaints each month from unsuspecting buyers spending money on a salvaged vehicle, according to the Heartland Institute.

In the buckeye state, the Ohio Automobile and Truck Recyclers Association is opposing Senate legislation seeking to revise an existing law and open up bidding for salvage vehicles to those other than vehicle salvage dealers.

Ohio auto recyclers, like those in Michigan, are concerned that by increasing the number of players bidding on vehicles the sales price of salvage vehicles will increase, in addition to costing jobs. "Members of the industry are maxed out on pricing, and if they realize a 20- to 30-percent increase in costs, the money will have to come from somewhere, which could result in employment cuts," the Ohio association said.

With four initiatives under way in less than six months, one suspects many more state auto recycling associations will step in to protect their turf.

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