Salvage yards seek law to curb offenses, increase standards

Mike Swift, sitting just outside the Des Moines city limits in an office with a stuffed deer head on the wall and piles of junked cars outside, explains how his business is different from that of the beauticians who operate a few miles away:

"We really have no regulations on us," said the owner of Trail's End Auto and Truck Salvage. "People who do hair and nails have more regulations on them than we do."

Swift and the 58 other members of Iowa Automotive Recyclers, a trade association, hope to change that.

The state's largest salvage yards, stung by what they regard as a plague of small and unprofessional operators, now are shopping around a set of new regulations that could be written into Iowa law as early as next year.

The first step, which could come this spring, would ban the public from bidding on junked cars for sale by insurance companies. Beyond that, a 57-page draft proposal outlines a certification process whereby all Iowa salvage dealers would be inspected and monitored to make sure they meet detailed standards governing everything from the look of the lobby to how they handle used batteries and vehicle fluids.

Certification, at a cost of roughly $500 for the inspection, would be voluntary at first. But if legislators approve, the process eventually would be required for anyone seeking to get an auto recycler's license from the Iowa Department of Transportation.

"We think it's a great program," said Theresa Stiner, a senior environmental specialist at the state Department of Natural Resources, which enforces pollution laws on salvage yards but generally only when there's a complaint. "Basically, (the program) goes through all of our environmental regulations and kind of puts it all together for them."

Maj. Paul Steier of the DOT's Office of Motor Vehicle Enforcement said authorities "certainly would be in favor of increasing the professionalism and standards of being a licensed recycler. It's just good business practices."

If certification becomes a part of state law, "there'll be some folks who are recyclers now who may have to change some business practices," Steier said.

That is a key benefit to many salvage operators.

State and industry officials say many small junk dealers, some of whom call themselves hobbyists, do so without any real knowledge of the proper way to operate such a business. Small companies frequently transport junk cars down the highway without properly securing them or send vehicles to the crusher without ever seeing ownership papers, critics allege.

Most small operators don't have proper equipment to keep air-conditioner coolant and mercury light switches from damaging the environment, and critics say they flout local zoning laws both in how they dismantle vehicles and by posting illegal signs promising to pay "Cash for Junk Cars!"

Steier said bad operators technically are violating state law. But enforcement has mixed results.

"If there's somebody who's not in compliance, you can issue him a citation," Steier said. "But it's like if we issue a citation for speeding. Five minutes later, you could be driving down the road and speeding."

Tom Carney of the Jerry Carney and Son used auto parts store in Ames said the need for regulation is "more that everybody needs to abide by the same rules."

"As long as they're competing on a level playing field, I don't mind about the competition," Carney said. "For me, it's more about what needs to be done properly because that's what's best for the environment."

But Bart Linder doubts that the association's motives are that pure. "It's called 'Follow the money,' " said Linder, whose efforts to buy and sell junk cars have included ads in Spanish-language phone directories. "The big boys in the business, they don't want the competition. They don't want me to be competitive with them."

Competition can involve serious money, depending on the scrap steel market.

Swift, president of Iowa Automotive Recyclers, estimates that 40 or 50 small salvage operators buy and sell junk vehicles in Des Moines, compared with nine members of his association. On average, each of the small operators is responsible for scrapping one car a day, he estimates. Assuming a 3,000-pound car, for example, the small operators would have pocketed a collective $20,000 to $25,000 a day at the height of scrap steel prices last May.

By contrast, Trail's End, which normally crushes cars only after an 18-month wait to see whether they're needed for parts, was selling 30 truckloads of junked cars a month last summer. Swift estimates that a major drop in the market price of scrap steel - from $340 per ton last May to $80 in November, but back up to $120 in January - has cost his business an average of $100,000 a month.

Tough economic times eventually are expected to reawaken salvage entrepreneurs.

In a bad economy, "there's more demand for parts," said the DOT's Steier. "Naturally, when there's more of a demand, we see more people wanting to get into the business."

Linder said he agrees that certain standards should be followed in recycling vehicles. But he sees no reason why he should be required to buy equipment to do things he has no intention of doing. Linder said his business, unlike large salvage yards, generally involves little dismantling of the vehicle. He said he generally removes wheels and catalytic converters but sells the rest of the vehicle for scrap without bothering to remove radiators or drain vehicle fluids.

"I don't dump stuff on the ground," Linder said. "I'm a Christian, and as a Christian, I just don't think that the good Lord would approve of me doing it."

BY Jeff Eckhoff, http://www.desmoinesregister.com/article/20090128/BUSINESS/901280369/-1/ENT06