AutoNation: Owed $45 Million From 'Clunkers'
AutoNation CEO Michael J. Jackson told CNBC Wednesday the government owes his company about $45 million in rebates from the cash-for-clunkers program, but said he still has faith in the program.
“This is a fantastic stimulus program that’s working on absolutely every level," said Jackson. "It is so successful beyond everyone’s expectations, that the Department of Transportation was not prepared to deal with this unbelievable surge.”
Since the program, the Cash Allowance Rebate System, began July 24, there have been about 411,000 transactions for new cars, costing the government upwards $1.5 billion. But some dealers aren't receiving the promised rebates, causing them to advance the money on behalf of the customer.
While confidence in the government's program may waiver because of the delayed rebates, Jackson said he finds little room to complain.
"I’m a bit sanguine about it," said Jackson. "To me, it’s like you throw a drowning man life preserver and he complains about the color of the life preserver.”
Jackson said he is confident that the backlog will be broken within the next several weeks and the rebates will begin to flow smoothly.
“The program is succeeding on every level, except for this administrative log jam that we have at the moment, which I am very confident we will get get fixed,” said Jackson.
The Department of Transportation responded to CNBC about the delay in dealers receiving their rebates in a statement that claimed the department "... is committing enormous resources and working overtime to the process the overwhelming volume of applications both quickly and responsibly while getting rebates paid for complete and valid deal.”
AutoNation is the largest Ford and GM dealer in the country.