A $2 billion injection to the “Cash for Clunkers” program expected to pass the U.S. Senate this evening will provide additional incentive for auto makers to restore inventories drained by months of conservative production schedules. “Inventories were already low before Cash-for-Clunkers, mostly because of bankruptcies at General Motors (Co.) and Chrysler (Group LLC),” says Erich Merkle, president of Autoconomy, a Michigan-based consultancy. “Chrysler in particular has about one month’s ...

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