Haviland USA

The metal, tires, and even the oil filters from the cars scrapped in the Cash for Clunkers program will be recycled into everything from handbags and high-rises.
Brooklyn-based retailer UncommonGoods sells wine glasses made from windshields.

By Aaron Smith, CNNMoney.com staff writer
Last Updated: August 27, 2009: 11:13 AM ET

NEW YORK (CNNMoney.com) — Next time you’re sipping your favorite wine, examine the glass closely: If it’s thick and greenish, it might have been the windshield of an old, junked car.

UncommonGoods, an online retailer based in Brooklyn, N.Y., peddles wine glasses, beer glasses and punch bowls that are manufactured in Colombia from recycled windshield glass. On its Web site, the company advertises these glasses as having “a slight green hue from the tint originally added to lessen the sun’s glare.”

“They’re one of our top-selling items,” said Joanna Penn, a media relations coordinator for UncommonGoods, which has been selling the glasses for about a year.

Penn said her company also started selling purses, wallets, briefcases and belts made from recycled tires by a Boulder, Colo.-based artist named Heather English. All the products are black, though they’re missing the tell-tale treads.

“You can definitely tell the material is the same, but it’s really light,” said Penn.

These products are the end result of the $22 billion recycling industry for scrapped cars, which is now in the spotlight thanks to the federal Cash for Clunkers program. Dealers participating in the initiative, which ended on Monday, claimed nearly $2.9 billion in vouchers for consumers who traded in old cars for new ones with better fuel efficiency. As a part of that program, dealers are required to destroy the Clunker engines so that they won’t end up back on road.

But most of a scrapped car’s parts are recycled, including the metal, glass, plastic, tires and even fluids like used motor oil, according to Earth911, a Scottsdale, Ariz.-based environmental services company that focuses on recycling and the proper disposal of trash.

Generally, car parts that still function, such as engines, radiators, wheels and panels are first stripped from the vehicles for reuse in other cars. Then defunct parts are reincarnated as something else.

“Recycling a car completes that product’s lifecycle but by turning it into something completely different,” said Jennifer Berry, public and strategic relations manager for Earth911.

According to Earth911, tires are transformed into asphalt and mud flaps or reconstituted as fuel. Windshields are turned into wine and beer glasses, as well as lamps and counter tops. Used oil filters are transformed into cans, refrigerators and structural beams, or they’re cleaned up and refurbished as new oil filters. Floor mats and truck bed liners are ground down and rebuilt as new versions of their former selves.

“The automobile is the most recycled component in the world,” said Sandy Blalock, former president of the Automotive Recyclers Association (ARA), based in Manassas, Va.. “Almost 100% of a car is recycled, except for the fluff, which is going to the landfill.”

Blalock was referring to the stuffing used in car seats, which poses a big challenge for recyclers, since some countries — like Japan — no longer allow it into landfills.

Even the fluids can be reused, according to the ARA. Transmission and brake fluids, anti-freeze, oil, gasoline, diesel and Freon from air conditioners are harvested at scrap yards for use in other vehicles.

“They twist and turn the vehicle to make sure that they get as much fluid out as possible,” said Michael Wilson, executive vice president of the ARA.

Wilson said that plastics are also extracted from the vehicles for sorting and recycling. The remaining scrap metal, which is by far the biggest component in terms of volume, is melted down and fashioned into all types of products, and could wind up as part of a new car in as little as 30 days.

“We end up with the skeleton of the car once it’s been dismantled — the hulk of the car — and we process it into commodity-grade materials,” said Bruce Savage, vice president of communications for the Institute of Scrap Recycling Industries, Inc. (ISRI), a Washington-based association of scrap processors and brokers.

“We send the car through a shredder, which pulverizes it into palm-sized pieces of metal,” said Savage. “We turn around and sell those to manufacturers, who use them as raw feed stock. A lot of this material is shipped internationally, particularly to China, for office buildings and infrastructure.”

China is the biggest consumer of U.S. scrap, importing $7.4 billion worth in 2008, according to the ISRI, followed by Canada, which imports $4 billion. More than a quarter of the $86 billion worth of scrap that’s generated each year is exported.

Like most other industries, the scrap businesses has taken a hit this year due to the slowing economy, said Savage. He added that the vehicles surrendered through the Cash for Clunkers program — totaling 690,000, according to the Department of Transportation — could create a glut that drives down scrap prices.

“That’s one of the unknowns right now, because a lot of these vehicles are still with the dealers,” said Savage.

Wilson, of the ARA, has his doubts about the economic and environmental benefits of Cash for Clunkers. The policy requires the destruction of the engine with a sodium silicate solution, also known as liquid glass.

But still-functioning engines are actually the most valuable part of a scrapped car, according to Wilson, so the fact that the Clunker engines must be killed is a big financial blow to automotive recyclers.

And it might even defeat the program’s environmental objectives, he said.

“To produce an engine takes more energy than any other part,” said Wilson. “We think that [the program] is going to have a minimal environmental benefit, if any.”

First Published: August 26, 2009: 3:19 PM ET

Increased demand for fuel efficient cars is leading General Motors to reinstate workers and increase shifts and overtime in order to build 60,000 additional cars.

By Chris Isidore, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) — General Motors is upping production and calling 1,350 of its U.S. and Canadian auto workers back to work due to increased demand for its vehicles.

The company said Tuesday it is raising production by about 60,000 vehicles in the third and fourth quarters, in response to the increased sales that accompanied the government’s Cash for Clunkers program.

The increased production will come from added shifts and overtime, GM said. In addition, the company will keep select plants open during weeks that they had previously been forecast to be shut down.

For example, the Orion Township, Mich., plant, which had been scheduled to close for nearly two-years in mid-September, will now remain in operation until just before Thanksgiving.

Those additional hours should increase the paychecks for an about 10,000 GM workers beyond those called back to work.

“The uptick is an encouraging sign that vehicle sales are turning around, and we will ramp up quickly to meet that demand,” said Tim Lee, GM group vice president for global manufacturing and labor, in a statement.

Weak sales and a need to conserve cash led the company to shut most production during the spring and early summer months, leaving GM with a record low dealer inventory of about 300,000 vehicles, according to company officials.

Mark LaNeve, GM vice president, U.S. sales, added on a conference call that he expects additional production increases to be announced in coming weeks and that the increased production could continue into the early months of 2010.

“We’re probably not done,” he said.

The Cash for Clunkers program, which gives car buyers up to $4,500 from the federal government for older gas guzzlers if they buy a more efficient new car, caused a spike in sales across the industry during the last week of July. GM rival Ford Motor (F, Fortune 500) has also announced increased production for the second half of this year.

LaNeve said that GM has continued to benefit from healthier demand since the end of July, putting it on pace to beat internal sales targets for August by about 50,000 vehicles.

But he cautioned that strong sales to rental car companies and other so-called fleet customers last August will make it difficult for GM to post a year-over year gain in sales.

GM, which filed for bankruptcy in early June as part of a government-mandated reorganization, emerged from bankruptcy protection last month. To top of page
First Published: August 18, 2009: 2:38 PM ET

The Chevrolet Volt — the electric vehicle General Motors Co is counting on to recharge its image with consumers — is on track to hit an unprecedented fuel economy rating of 230 miles per gallon in city driving, the automaker said Tuesday.

Reuters
Link to Article Chief Executive Fritz Henderson said the Volt would get a “triple-digit” fuel economy rating for combined highway and city driving based on a draft standard developed by the U.S. Environmental Protection Agency.

“The Volt is becoming very real, very fast,” Henderson said in an announcement at GM’s technical center that was webcast to the public.

The Volt, which will be introduced late next year, is designed to run for 40 miles from a single charge of a lithium-ion battery pack. After the battery is partly depleted, a small combustion engine is designed to kick in to recharge the battery and power the vehicle.

In drafting standards to calculate the published mileage rating for the Volt and other upcoming electric vehicles, U.S. regulators have made assumptions about how much a typical driver will rely on the traditional gas engine.

Those standards, which will also provide a crucial benchmark under recently tightened federal fuel economy standards, are due to be published later this year.

Henderson said GM has engineers working on second and third-generation versions of the Volt in order to bring down the cost of battery-powered vehicles.

GM has been racing to make the Volt the first mass-market plug-in hybrid in the U.S. market in order to shake its association with gas-guzzling trucks and generate buzz for its car line-up that will take aim at competitors led by Toyota Motor Corp.

The Volt is designed to be recharged at a standard electric outlet. Henderson said that would reduce the cost of the first 40 miles of driving for some Americans to as little as 40 cents, the cost of recharging the car overnight in a garage.

For most vehicles, it would cost well over $3 to drive 40 miles, based on current gas prices.

Toyota has dominated the hybrid market with its Prius, now in its third generation.

The current Prius gets a fuel economy rating of 50 miles per gallon in combined city and highway driving. The Toyota hybrid accounted for over 60% of all U.S. hybrid sales in the first seven months of 2009.

The Japanese automaker is also developing a rechargeable version of the Prius that will compete with the Volt although the GM plug-in appears on track to be the first vehicle of its kind in U.S. showrooms.

THE COST OF SUCCESS

One of the hurdles for the Volt has been its projected sticker price, which GM executives have said could be $40,000 before accounting for a $7,500 tax credit to consumers.

GM has also acknowledged that the Volt will not be profitable in its first version because of the development costs it has incurred in its race to develop the vehicle, including its 400-pound battery pack.

“We’re excited about the potential but the cost is high,” said Henderson.

“In general, I don’t want to say we’re going to subsidize things,” he said in response to a question on the Volt’s pricing. “But that said, we need volumes to get to (the second generation).”

The announcement of the Volt’s projected fuel economy comes a month after GM exited a fast-track bankruptcy and comes as part of an effort by Henderson to shift attention back to the company’s vehicles and away from its recent financial crisis.

GM emerged from bankruptcy under the majority ownership of the U.S. Treasury. The automaker is planning an initial public offering by July 2010 to pay back part of that taxpayer funding.

Henderson said GM was on track to post a net profit as early as 2011 after slashing its costs in bankruptcy and seeing an improvement in auto sales from a slump that pushed the U.S. market to the lowest levels since the early 1980s.

U.S. auto sales rose in July as Americans rushed to take advantage of a government “Cash for Clunkers” incentive to trade in old gas guzzlers for more fuel efficient vehicles, raising hopes that the battered sector is poised for recovery.

With GM’s inventory levels low, the automaker is looking at raising production in the current and coming quarter to adjust to steadier demand, Henderson said.

“We certainly feel very good about our inventory position, feel better about the market at least hitting the bottom and maybe starting to bounce, and we will adjust accordingly,” he said.

Haviland is seeking motivated individuals or distributors to represent Haviland Products.

Over the past decade Haviland has garnered partnerships with sales agents and distributors throughout the United States. Canadian Finishing Systems recently became Haviland’s exclusive surface finishing distributor to all of Canada.
Haviland Products is looking to continue its formula for success by teaming with an organization or individual(s) interested in becoming a sales agent of Haviland Products Company.
We are seeking a motivated individual agent or company with previous background in the metal finishing industry to represent Haviland Products Company throughout the United States and Mexico. Since 1934, Haviland Products Company has provided surface finishers with superior chemistry and technical service.
Haviland is dedicated to supplying the surface finishing industry with economical high-performance chemistry. We have a full-time technical service team, laboratory and marketing departments that work with our sales agents to increase the chances of their success. Contact Haviland today.
See our surface finishing products and services.

GRAND RAPIDS, MI – Haviland Products is proud to announce the acquisition of Benchmark, Inc., Wyandotte, MI. Benchmark, Inc. has been a leader in the formulation and manufacturing of surface finishing chemistry since 1956.

Paul Cook of Benchmark also joins the Haviland team; as a technical sales agent, he will support Haviland’s sales and marketing efforts in Eastern Michigan, Northern Ohio and throughout the Midwest. Haviland will continue to manufacture the Benchmark brand high-performance, pre-treatment and specialty product line.
“It is Haviland’s goal to serve the metal finishing industry world-wide, and the acquisition of Benchmark Inc. is another step in that pursuit,” says Haviland Enterprises CEO Bernie Haviland. “We’re excited about adding the Benchmark product line, and we’re also excited about adding Paul Cook to the Haviland team.”

Haviland Products formulates, manufactures and distributes decorative, functional and specialty coatings for Fortune 500 companies nationwide.

For more information, contact:
Haviland Products Company, 421 Ann Street, NW, Grand Rapids, MI 49504
800.456.1134
chemicalexperts@havilandusa.com

Automaker ends 19 straight months of sales declines with a 2% increase in July. Other automakers could also get boost from government trade-in program.

By Chris Isidore, CNNMoney.com senior writer
Last Updated: August 3, 2009: 12:26 PM ET
Link to original article.
NEW YORK (CNNMoney.com) — Ford Motor Co. reported a 2% gain in July auto sales compared to a year earlier, the first increase from any U.S.-based automaker since November 2007.

Ford said that it was helped by the popular Cash for Clunkers program that gives car buyers up to $4,500 for trading in older, gas-guzzling vehicles if they’re buying more fuel efficient cars. Shares of Ford soared more than 6% on the news.

The program helped Ford sell significantly more cars and crossover models, even while its trucks and SUVs sales continued to fall from year-ago levels.

Ford said overall sales to retail consumers were up 9% from a year ago. But so-called fleet sales to businesses, such as rental car companies, fell by about 16%, partly due to the decision by Ford to pull back from those less profitable sales.

Ford said it did not have any specific numbers of customers who had taken advantage of Cash for Clunkers, but that the program was not the only reason for the improvement in sales.

“We had another strong month in progress before the Cash for Clunkers program started,” said Ken Czubay, Ford vice president of sales, in a statement.

Cash for Clunkers is close to running out of the $1 billion appropriated by Congress to try to spur auto sales and reduce auto emissions. The House approved an additional $2 billion in funding for the program Friday, but the Senate has yet to act.

The recession and high gas prices have hurt demand for cars and trucks, sending automakers’ sakes into a sustained decline. General Motors and Chrysler both filed for bankruptcy earlier this year and even the three largest Asian automakers – Toyota Motor ™, Honda (HMC) and Nissan (NSANY), have been unable to report a sales increase since August of last year.

It is unclear how many other major automakers will be able to follow Ford (F, Fortune 500) in posting a gain. Sales tracker Edmunds.com, which had forecast a 4% decline in sales at Ford, is predicting declines of at least 10% from the other five major automakers. Only No. 7 Hyundai had been expected to report a gain.

But all the automakers are likely to report a gain in sales when compared to June. That would make this the best month for sales so far in 2009.

Jessica Caldwell, industry analyst for Edmunds.com, said Cash for Clunkers has helped lift auto sales by more than her firm had initially expected. But she added that it’s not clear how much longer the program will boost sales, even if additional funding is approved.

“It’s not clear how many more clunkers there are out there that people are willing to trade, once the initial pent up demand is satisfied,” she said.

Still, Caldwell said that if the funding for the program is extended, industrywide sales in August could be up — and that would be the first year-over-year increase since October 2007.

“With every month having been horrific, any news like this is good news,” she said.

Talkback: Do you think the worst is over for the auto industry or is the Cash for Clunkers program providing only a temporary boost?

First Published: August 3, 2009: 11:38 AM ET

There’s been a lot of confusion surrounding Cash for Clunkers. Here’s a guide to help readers make the most of the government’s program.

By Peter Valdes-Dapena, CNNMoney.com senior writer
Last Updated: July 30, 2009: 4:14 PM ET

Read the article.
NEW YORK (CNNMoney.com) — The federal government’s new Cash for Clunkers program has caused a lot of excitement for consumers. It’s also caused plenty of confusion.

Buying a new car is a major financial commitment and you don’t want to get so carried away playing the Clunkers game that you lose sight of other big financial benefits you could stand to gain, with or without the government’s incentive.

Clunkers: Do I qualify?
Fuel economy: Your car must have an EPA-estimated combined fuel economy of 18 miles per gallon or less. The only number that counts is the one reported, as of July 24 on the EPA’s fueleconomy.gov Web site. Your own personal experience with your car’s fuel economy doesn’t count.

Age: Your car must be under 25 years old, and they mean that literally. In other words, looking at the model year alone doesn’t cut it. If you have a 1984 car, check the month it was manufactured. You can find it on a sticker inside your driver’s side door. If your car was built in June or July, you’d better hurry. If it was built before June, you’re out of luck.

Not on blocks: It would defeat the program’s environmental purpose if all people did was drag out rusting “parts cars” to trade them in. Cars that aren’t being driven don’t pollute much.

So you have to prove that car has been continuously insured for the past year, which implies you’ve been driving it. Second, you have to show that it’s been registered to you for at least a year. That shows it really was “your car” and not just something you picked up for a song just to cash in.

Cars vs. trucks
The rules differ depending on whether you’re trading in a car or a truck. In either case, the vehicle you’re buying cannot have a base price higher than $45,000.

Cars: If you’re trading in a car — as opposed to a truck or van — and it meets all the qualifications, you’re eligible to receive a credit.

If the car you’re purchasing has EPA-rated fuel economy — again, this is combined city and highway mileage — of 10 mpg better than your trade-in, you’re eligible for a $4,500 credit. If gets 4 to 9 mpg better, you’re eligible for a $3,500 credit.

You could also trade in your car to get a new truck or SUV. In this case, with only a 2 mpg improvement, you would get the $3,500 rebate. With a 5 mpg improvement you’d get $4,500.

Trucks (Category 1): If you’re trading in an SUV, van or pickup, things are even easier. The fuel economy requirements aren’t as strict.

If you’re trading in a basic truck, van or SUV — in other words, not a heavy-duty truck or big passenger van — you can get a $4,500 credit for purchasing a new truck or van with fuel economy that’s better by 5 mpg or more. You can get a $3,500 credit for a 2 to 4 mpg improvement.

You can also trade your truck in for a new car, but if you do that you’ll have to meet the stricter fuel economy requirements for cars.

Big trucks (Category 2): If you’re trading in a bigger truck — a truck with a wheelbase of 115 inches or a van with a wheelbase of 124 inches — you’re eligible for a $4,500 credit for buying a similar vehicle with a 2 mpg improvement or a $3,500 credit for buying one with a 1 mpg improvement.

Really big trucks (Category 3): If you’re trading in a truck with Gross Vehicle Weight Rating (GVWR) of 8,500 to 10,000 pounds, all you have to do is buy a new one. Fuel economy doesn’t even factor into it.

Vehicles like this don’t get their fuel economy rated by the EPA, so a rebate based on fuel economy wouldn’t work. Trucks like these are eligible if they were manufactured before 2001 and are less than 25 years old. They’re eligible for a $3,500 credit if traded in for a new Category 2 or 3 — meaning a big or really big — truck, van or SUV.

GVWR is the combined total of the vehicle’s weight and it’s maximum load capacity. Basically, it’s how you much the vehicle could conceivably weigh if you loaded it down with as much stuff as it’s designed to carry. To find out your vehicle’s GVWR, look for a sticker inside the driver’s door frame.

Category 3 truck owners are only allowed to trade for another Category 2 or 3 trucks. Plus, there’s only a limited amount of money available — $ 7.5 million — for Category 3 truck owners.

More than just Clunker money
If you take the government rebate, what you give up is the ordinary trade-in value for your car. You are entitled to the car’s scrap value minus $50 the dealer is allowed to keep, but don’t expect to get much from that.

Beyond that, you are still eligible for all the usual customer rebates that would apply whenever you’re buying a car. Don’t forget, you’re also entitled to negotiate the price of the new car you’re purchasing, as always. Also, the Cash for Clunkers program applies whether you’re buying or leasing your new vehicle.

Before you take advantage of the program, be sure to check the value of your vehicle. It may be worth more than the rebate amount. Even if it’s worth less, keep in mind that your actual benefit isn’t $4,500 or $3,500, it’s the difference between your car’s real value — what you would ordinarily get for your car — and what the government will give you for it. That difference may not be worth factoring into your car-buying decision.

After considering quality, resale value and your own personal preferences, a car that doesn’t get you the clunker cash may be the better deal.

First Published: July 30, 2009: 1:27 PM ET

(CNN) — The answer to easing the energy crunch in one of the nation’s most populous states could lie underwater.

By Azadeh Ansari

Researchers say turbines off Florida’s east coast could produce enough electricity to power 3 to 7 million homes.
Imagine if your utility company could harness the ocean’s current to power your house, cool your office, even charge your car.

Researchers at Florida Atlantic University are in the early stages of turning that idea into reality in the powerful Gulf Stream off the state’s eastern shore.

“If you can take an engine and put it on the back of a boat or propel a ship through water, why not take a look at the strength of the Gulf Stream and determine if that can actually turn a device and create energy?” asked Sue Skemp, executive director at Florida Atlantic University’s Center for Ocean Energy Technology.

The demand for energy in Florida — the fourth most populous state, with an estimated 19 million residents — is quickly outpacing the capacity to create it, according to experts. Watch how the proposed ocean turbines would work »

“Right now in Florida, we are at the cusp of an energy crisis. Our energy demand keeps growing,” said Frederick Driscoll, director of Florida Atlantic University’s Center of Excellence in Ocean Energy Technology.

Beginning in the Caribbean and ending in the upper-North Atlantic, the Gulf Stream lies on the eastern shore of Florida.

Its powerful currents have been used by many fishermen, sailors and explorers to expedite their passage in the Atlantic north and east to Europe, but scientists say the energy within its currents could propel Florida out of its potential energy crisis, powering 3 million to 7 million Florida homes — or supplying the state with one-third of its electricity.

“The predictions at this point estimate that the strength of the Gulf Stream could generate anywhere between four to 10 gigawatts of power, the equivalent of four to 10 nuclear power plants,” said Skemp.

“The Gulf Stream is the strongest current in the world, so we want to harness our greatest resource. It’s renewable, emission free and reliable,” said Jeremy Susac, executive director of the Florida Energy and Climate Commission.

At the university’s Center for Ocean Energy Technology in Boca Raton, Florida, ocean engineers are working with marine, environmental and material scientists to develop cost-competitive technologies to commercialize the energy within the Gulf Stream.

Though it has been considered for more than a century, harnessing the energy of the Gulf Stream is no easy task, and no sustainable system has been implemented.

“First we have to do a resource assessment and understand how much energy is in the Gulf Stream current on a minute-to-minute, day-to-day, hour-to-hour and yearly basis,” said Driscoll.

In April, researchers at the center deployed four acoustic Doppler current profilers in the Atlantic off the east coast of Florida.

Using high frequency, low-power sonar, these large orange ball-shaped objects measure the speed of the ocean currents.

“We are looking at how much energy we can safely extract — what is the sensitivity of extraction versus the environmental effects?” said Driscoll.

The vision for the pilot program is to develop and test a 20-kilowatt underwater turbine by spring 2010.

Sound familiar?

The concept behind underwater turbines is similar to that of wind turbines on land.

As water flows by the turbine, it turns a rotor blade. As the rotor blade turns, energy is generated.

That energy can be transmitted from a generator inside the turbine to electrical conducting cables, where it’s captured, harnessed and distributed for future use.

Researchers also are looking at ways to use the electricity that is generated underwater to generate and store hydrogen in the ocean. The hydrogen could be used to fuel clean-running cars and trucks.

“Because it’s such a new endeavor, there’s a lot of knowledge gaps not only in terms of the technology side but also on the ecological side of things,” said Driscoll.

Completely reliant

Florida is completely reliant on out-of-state fuel sources (coal and natural gas), but generates more than 90 percent of its own electricity, according to the Florida Energy and Climate Commission. It ranks third nationally in total energy consumption.

So how much will this endeavor cost? And what kind of impacts will it have on the local marine environment?

“Those are the questions we don’t have answers to,” said Skemp.

There are some hurdles that need to be cleared before the technology can get approval and become commercially available.

“This area is so new, we’re still finding out what needs to be done,” said Skemp.

“It’s not like an established industry, like the aerospace industry or the automotive industry or others, where you have models which you could base cost on,” added Skemp.

So far, the state of Florida has allocated $13.75 million in grants toward research and development of the pilot project, but the cost to implement the project on a large scale could be much higher.

Before a project like this can go forward, the Federal Energy Regulatory Commission will have to look at a whole range of factors, from the effects it will have on wild and marine life to recreation activities and shipping, said an environmental specialist with the commission.

If the pilot program is successful, it could take another five to 10 years before the technology can be implemented.

The Gulf Stream is something that has been taken for granted, said Skemp.

“The Gulf Stream is on 24/7. It’s flowing 365 days a year, so it’s a continuous source of energy.”

The only U.S. automaker to stay out of bankruptcy reported a net profit thanks to debt reduction and a smaller operating loss and sales decline than expected.

By Chris Isidore, CNNMoney.com senior writer
Last Updated: July 23, 2009: 8:03 AM ET

NEW YORK (CNNMoney.com) — Ford Motor Co. reported a net profit in the second quarter thanks to efforts to reduce its debt. But the company posted another operating loss during the second quarter due to a continued slump in sales.

Still, that loss was much smaller than a year ago and Wall Street’s forecasts.

The company converted much of its debt to equity during the period through an offer to shareholders. That caused Ford to post a one-time gain of $2.8 billion, which allowed Ford to report net income of $2.3 billion, or 69 cents a share in the quarter. Ford posted a net loss of $8.7 billion a year ago.

But Ford, the only U.S. automaker not to file for bankruptcy during the second quarter, reported an operating loss of $638 million, or 21 cents a share in the period, excluding special items. That’s an improvement over the 63 cents a share Ford lost on that basis in the year ago period.

Analysts surveyed by earnings tracker Thomson Reuters were predicting an operating loss of 48 cents.

Ford said that revenue fell 29% to $27.2 billion, as vehicle sales in the U.S. tumbled 23% in the quarter. But sales also beat forecasts. Analysts were expecting a drop of 36% to $24.8 billion.

Shares of Ford (F, Fortune 500) gained more than 5% in pre-market trading following the report.

The company’s auto operations burned through $1 billion in the period, but that too was better than the $3.7 billion in cash it burned through in the first quarter of the year.

Ford said it has about $21 billion in cash on hand at the end of the quarter following its debt for equity swap as well as its decision to tap its $10 billion lines of credit in the first quarter.

That cash position allowed the automaker to avoid a government bailout at the same time that the Treasury Department was pumping billions of dollars into rivals General Motors and Chrysler Group to keep those companies alive throughout their bankruptcy reorganizations.

Ford said it remains on track to track to achieve or beat all of its 2009 financial targets, and that it should be able to cut $4 billion in costs this year.

The company also reiterated that it expected its North American auto operations would break even or make money by 2011 and stop burning through cash by that time.

“While the economic environment remains challenging, I am more convinced than ever we are on the right path to create a healthy and profitably growing Ford,” said Ford CEO Alan Mulally in a statement.

The company also said it expects to continue gaining market share in both the United States and Europe this year. Through the first half of 2009, Ford accounted for 16.1% of U.S. auto sales, up from 15.5% in the year-earlier period.

Ford, which has been trailing GM and Toyota Motor ™ in annual U.S. sales for the past few years, has been pulling closer to Toyota recently. In fact, Ford sold more vehicles in the U.S. than Toyota in the second quarter.

First Published: July 23, 2009: 7:27 AM ET

Chrysler Group and GM cut dealerships as part of their bankruptcies, but dealers are urging lawmakers to force the two automakers to take them back.

By Chris Isidore, CNNMoney.com senior writer
July 16, 2009: 2:19 PM ET

NEW YORK (CNNMoney.com) — Dealers who have been muscled out at Chrysler Group and General Motors are trying to get Congress to force the automakers to take them back.

The push by the dealers to reverse the cuts has garnered strong bipartisan support, especially from powerful Democratic leaders Financial Service Committee Chairman Barney Frank and House Majority Leader Steny Hoyer.

The measure, which restores franchise rights that were stripped out as part of the bankruptcy process, was attached as an amendment to an appropriations bill to fund a variety of federal regulators, including the Securities and Exchange Commission. It is expected to easily pass the House Thursday.

0:00 /6:45GM refocuses on product
It faces more opposition in the Senate, where Senate Majority Leader Harry Reid said earlier this week the measure is not a priority and that he was satisfied with the decision to have the automakers use bankruptcy to shed dealers.

“When you have a bankruptcy, there are winners and losers. That’s what happened. And there were some losers. It’s unfortunate, but that’s the way the bankruptcy courts operate,” he said.

But Reid’s spokesperson backed away from those comments Thursday, saying that the majority leader was speaking off the cuff.

Even some of the measure’s supporters acknowledge that many of the dealers being cut are unlikely to stay in business for much longer or restart their businesses.

The Chrysler Group dealers cut during the bankruptcy process were forced to stop selling Chrysler, Dodge and Jeeps in June while virtually all GM dealers being cut lose will be phased out by between January and September 2010.

“I think a number of them can be reopened, but it’s not the goal of them to have them all reopen,” said Rep. Rep. Steven LaTourette, the Ohio Republican who inserted the dealer language into the appropriations bill.

But if the franchise rights are restored, the automakers would have to spend millions of dollars to buyout the dealerships it wants to cut. When GM dropped the Oldsmobile brand at the start of the decade, for example, it spent about $1 billion to do so — most of it in payments to dealerships.

Dealers and their supporters argue that larger dealership networks do not cost the automakers any money, and that it can actually increase their sales. They say it is unfair for state franchise laws, which protected their investment in the dealerships, to be thrown out in the bankruptcy process.

They also argue that at a time of rising job losses, it doesn’t make sense to force dealerships to close, throwing more people out of work. The average dealership has about 50 employees, meaning the closing of 2,000 dealership could cost more than 100,000 jobs nationwide.

The dealers are well positioned to fight the battle in Congress. They are found in each congressional district, and many are successful business owners that have been supporting members of Congress since they first ran for for local elected office. Their influence in the Senate is generally acknowledged to be somewhat less than in the House, though.

The automakers and most auto industry experts argue that GM and Chrysler were hurt by a bloated dealership network that is a remnant of years gone by when they both had a much larger share of U.S. vehicle sales.

They say cutting the dealerships allows the surviving dealers to sell and service more vehicles, making them more profitable in a way that allows them to spend money on the advertising and their facilities needed to attract sales.

“If this legislation is enacted, it would put our viability at serious risk,” said Greg Martin, spokesman for GM’s Washington office. “Having the right number of dealers in the right location is essential to our ability to compete.”

The Obama administration, which pushed the automakers to make even deeper cuts in dealer networks than they originally proposed, is fighting the dealers’ efforts in Congress.

“The decision to invest taxpayer dollars into these companies required all stakeholders to make difficult sacrifices, and it would set a dangerous precedent, potentially raising legal concerns, to intervene into a closed Judicial bankruptcy proceeding on behalf of one particular group at this point,” the administration said in a statement Wednesday.

The two automakers are also doing what they can to fight the dealers’ efforts in Congress.

GM CEO Fritz Henderson was on a conference call with the Michigan delegation Wednesday evening, during which he was pushed by some of the company’s greatest defenders in Congress to reach a deal with dealers to try to make them drop the legislative effort.

Some of the leading proponents of the measure in Congress say they also hope that the automakers can come up with a compromise solution to satisfy dealers and make the legislation unnecessary.

“Legislation is a hammer. I would prefer not to use a hammer,” said LaTourette. “I’d rather use a scalpel. Let [the automakers] come in and work this thing out.”

But a spokesman for the National Automobile Dealers Association said his group, which flooded Capitol Hill with more than 200 dealers visiting members of Congress earlier this week, said his group is committed to passing some form of the legislation to restore their rights.

“We are not interested in making a deal,” said NADA’s Bailey Wood. “There is an immense amount of support and it is growing on a daily basis. There is absolutely no reason we need to make a deal.”

Even if the language is stripped out of the appropriation bill when it goes to the Senate, a stand-alone version of the bill has been co-sponsored by more than half of the House members and 24 senators so far. NADA is pushing to bring more than two-thirds of the House on as co-sponsors to prove they have the votes to override a veto.