Unocal to Close Unit That Junks Old Cars

BREA — A Unocal Corp. unit that buys and scraps cars with high emissions said Friday it will wind down and eventually close because the regulation allowing companies to meet air quality goals by junking old cars is gradually being phased out.

Brea-based Eco-Scrap Inc., which Unocal started in 1995, has scrapped cars for 120 companies. It said it will continue buying old vehicles to fulfill existing contracts, but won’t take on new business “until the company sees a broader potential customer base.”

A company spokesman said there will be no layoffs. The unit employs only three or four people, who will be given jobs in Unocal’s other operations, he said. Most of Eco-Scrap’s work is done by outside contractors.

“If the situation does change, we’ll monitor that and resume operations,” said Unocal spokesman Barry Lane. “At this time, we’ll just maintain our existing contracts and mothball the business.”

Employers such as General Motors Corp. pay Eco-Scrap fees to scrap their old vehicles to meet air pollution reduction goals.

A 1995 South Coast Air Quality Management District rule allowed companies with 100 or more employees to scrap pre-1982 vehicles as a substitute for traditional work-trip reduction plans such as ride sharing and van pooling.

The rule was intended to reduce the costs for businesses to comply with mandatory emission reduction goals.

“Of the alternatives available, old-car scrapping is definitely the most cost-effective way for employers to meet AQMD emission reduction targets,” said Eco-Scrap president Luis N. Weiss.

But this year the agency raised the threshold for trading old-car scrapping for other emission-reduction programs to businesses with 250 employees. On Jan. 1, the bar will be increased to 500 employees.

By 2000, the agency plans to suspend the rule unless it’s determined that ride sharing and other measures aren’t meeting pollution reduction goals.

AQMD spokesman Bill Kelly said the old-vehicle scrapping option is being phased out as part of a broader move to gradually end the mandatory emission reduction program for employers.

A 1996 state law required repeal of the mandatory program if it could be shown that voluntary efforts produced the same results. The issue is being studied.