Regional Report Charlotte March 2010

 In 2010-03

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Smith tries to drive Cash for Clunkers 2 

If you failed to trade in that gas guzzler for an Earth-friendly fuel sipper in a deal greased with federal money, don’t despair. The car dealer who claims credit for last summer’s “Cash for Clunkers” program is angling for an encore, though the main reason for it might no longer exist.

Bruton Smith, CEO of Charlotte-based Sonic Automotive Inc., hopes to persuade Congress to push though “Cash for Clunkers No. 2” this year. Last summer, Smith says, he drafted the bill that his friend Harry Reid, the Nevada Democrat who is Senate majority leader, shepherded through Congress. Smith also is CEO of Speedway Motorsports Inc., which owns Las Vegas Motor Speedway. The government paid $3 billion in incentives to get people into more fuel-efficient cars, partly to reduce fuel consumption and automobile emissions but mainly to increase auto sales. “In just a few short weeks, nearly 680,000 older vehicles were replaced by new, more fuel-efficient vehicles,” says the federal Transportation Department’s report to Congress.

That benefited Smith and Sonic, the nation’s third-largest automotive retailer with 148 franchises. The program accounted for more than a quarter of the new cars Sonic sold in July and August. It also helped other North Carolina car dealers. Registrations for new vehicles statewide jumped 31% from July to August, when Cash for Clunkers shifted into high gear. Smith says he had been working on the idea for a decade, but conditions weren’t right until last year. Now, he wants $3 billion more.

But with so much of the economy still hurting and government resources stretched thin, do auto dealers deserve another stimulus program? Car registrations statewide were up 23% in December over November and 8% from a year earlier. Smith told WBT radio talk-show host Keith Larson — who dubbed the new plan “Cash for Bruton 2” — that Sonic had one of its best months in December. “People are buying cars again, and that indicates to me that this economy is turning around.”

Ralph Byrns, an economics professor at UNC Chapel Hill, says a repeat doesn’t make much sense because the automotive sector is doing better. “The automobile industry is not in great shape. But for that matter, the heavy-equipment industry is not in great shape. Why don’t we have a Cash for Construction Equipment program to bail out Caterpillar, John Deere and other companies?”

Smith says a second round would improve road safety by getting old cars off the road, help poor people who otherwise couldn’t afford a better car and reduce fuel consumption and auto emissions. But he worries about political climate change in Washington. “This second go-around will be more difficult than the first. I’m hopeful we’ll get it done, but I have no guarantees.”

CHARLOTTECelgard, a maker of membranes used in lithium batteries, plans to expand here and build a factory in Concord within four years. The company, part of Polypore International, will add 80 jobs here, for a total of 470, and hire nearly 210 in Concord.

MOUNT HOLLY — An arbitrator says German automobile maker Daimler violated its labor agreement when it let go about 900 workers at its truck factory here and increased production in Mexico. Employment was cut to fewer than 200. The company was ordered to increase production locally and compensate union workers laid off last year and in 2008.

CHARLOTTE — New York-based Morgan Stanley is forming a private bank — with headquarters here and in New York — to serve wealthy customers of its investment business. No time frame or employment totals were disclosed.

CHARLOTTEHusqvarna will add 160 jobs this year, doubling employment, as the Swedish maker of outdoor power equipment moves its North American headquarters from Augusta, Ga. The average annual salary of the new jobs is $79,453.

HICKORYConvergys added 120 jobs at its local call center, bringing employment to about 620. The Cincinnati-based outsourcing provider says they’ll support a new client.

CHARLOTTE — Parks Helms resigned as chairman of the Mecklenburg County Alcoholic Beverage Control Board, and Calvin McDougal resigned as CEO, amid controversy over meals paid for by liquor suppliers. Helms says he’s a “scapegoat” for a troubled system.

BELMONTWilbert Plastic Services, a maker of automobile parts, moved its headquarters from Chicago. It will add 41 employees within three years for a total of 86.

KANNAPOLIS — Contract manufacturer Harmony Labs will add 40 jobs here and in Landis this year, bringing local employment to about 265. It specializes in acne treatments and sunscreens.


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