We have more good news from GM. The news on the Chevy Equinox in particular isn’t surprising. It’s a sharp-looking vehicle with a very reasonable price, so it’s perfect for the current climate.

General Motors is examining ways to ramp up production of four newer models that are selling well above its expectations, a GM spokesman said on Wednesday.

All four models are greatly revamped from previous versions and one, the Chevrolet Camaro, was resurrected five months ago after being out of production for seven years.

The four models are the Chevrolet Equinox, a crossover utility vehicle; Buick LaCrosse, a sedan; Cadillac SRX, also a crossover; and the Camaro, a sports car.

The potential increase in production at GM could prompt more workers to be recalled from layoff, a rare bright spot for the world’s No. 2 automaker just two months after it emerged from bankruptcy protection.

GM spokesman Tom Wilkinson said GM knew it would have to increase production of some of its models after a summer when inventory levels were at unsustainably low levels, but that these four models in particular had outstripped expectations.

GM said it will also look for a second production plant for the Equinox, which is now assembled at the CAMI Automotive plant in Ingersoll, Ontario, which GM owns with Suzuki Motor (7269.T). The Terrain is also built there.

Sales for the 2010 model Equinox were about 9,900 through September 15. The redesigned Equinox was launched in June.

September will be a critical month. It’s important that sales don’t fall off too much following the end of the cash for clunkers program.

The cash for clunkers program continues to have positive effects, as GM is now increasing production to meet the new demand.

With its Chevrolet Cobalt in demand because of the federal “cash for clunkers” rebate program, General Motors said today it would restart the second shift at its Lordstown plant early next month.

More than 1,000 people will return to work, bringing employment at the plant to about 3,300. The news comes just in time for some laid-off workers who were about to see their benefits reduced.

“It’s a huge relief,” United Auto Workers Local 1112 President Jim Graham said. “We’ve know for some time that this would happen. We just didn’t know when it was coming back.”

GM executives said they had to restart the shift at Lordstown, where the Cobalt is assembled, and add production at other plants because the automaker was running out of cars. The clunkers program, which offers up to $4,500 to people who trade older gas-guzzlers for new, more fuel-efficient models, had left some dealers short of cars. The program is expected to end around Labor Day.

The increased production is not limited to Lordstown.

In addition to the new shift at Lordstown, GM is restarting a shift at the Canadian plant that builds the Chevrolet Equinox, a five-passenger crossover that can get 32 miles per gallon on the highway, said Tim Lee, GM’s vice president for manufacturing.

He added that demand for GM’s small pickups and its HHR wagon are also up, so GM could add shifts to plants in Louisiana and Mexico, too.

In addition, GM plans to keep open its Lake Orion, Mich., plant until November to build the Chevrolet Malibu. That plant had been scheduled to close next month. It was set to reopen in 2011 to make small cars.

Needless to say, this is excellent news for the auto industry and for the overall economy. Areas like Northeast Ohio have been suffering from growing unemployment, and every little bit helps. This also bodes well for auto suppliers.

We know that thousands of Americans are taking advantage of the Cash for Clunkers program, so the program is helping to drive auto sales and stimulate the economy. In case you haven’t noticed, we can use some stimulation.

Beyond that, however, it turns out that the program is even more successful than originally thought when it comes to replacing gas guzzlers with fuel efficient cars.

And the Transportation Department reported that the average gas mileage of the vehicles being bought was significantly higher than required to qualify for a rebate of $3,500 to $4,500. Of 120,000 rebate applications processed so far, the department said the average gas mileage of cars being bought was 28.3 miles per gallon, for S.U.V.’s, 21.9 miles per gallon, and for trucks, 16.3 miles per gallon.

“The statistics are much better than anybody dreamed they would be,” said Senator Dianne Feinstein, Democrat of California. The actual mileage gain so far, she said, was not due to the details of the law but “the good judgment of the American people.”

Senator Feinstein, along with Senator Susan M. Collins, Republican of Maine, was the author of an early version of a “cash for clunkers” bill that would have required bigger improvements in mileage. Their decision to express support for extending the current version of the program, at a news conference late Monday afternoon, was an important signal to other senators concerned about whether the program was doing enough for the environment.

Senator Charles E. Schumer of New York, an early backer of the Feinstein-Collins approach, also voiced support for an extension. “If it ain’t broke, don’t fix it,” he said. “It’s working in every way. It’s working as stimulus, it’s working to help families, it’s working to improve mileage.”

The chances are pretty good that Senate will vote this week to extend the program so that it can be signed by President Obama.

Some opponents of the program have expressed concern that auto sales will stall after the program ends, whether it ends now or in the fall after an extension. This concern is unfounded. Many people taking advantage of this program have older cars that they’ve driven for years, and many of them keep older cars for the simple reason that they are thrifty. Without this program, many of them would likely keep their old cars. With the program, they have a huge financial incentive to junk the old car and pick up a new one at a great price. Along those lines, Ford announced today that they see car sales rebounding through 2010, as pent-up demand starts to drive the market.

The cash for clunkers program is off to a roaring start, as Americans seem ready to purchase new cars when presented with a great deal. This is a very encouraging sign for the economy, as a boost in auto sales would go a long way towards getting us out of this recession.

The program is so popular that it’s running out of money after just one week. The House has passed a bill to add $2 billion to the original $1 billion program. The Senate will take it up next week. Senator Diane Feinstein won’t support the bill without tougher fuel standards, and John McCain might filibuster the bill in the Senate. It’s not a done deal yet.

The automotive landscape has been changing so rapidly it’s sometimes hard to keep up. GM and Chrysler had to be saved by the federal government, while Ford was able to avoid that fate. Their troubles have probably helped Ford, but Ford has also been on a tear with impressive new models like the Ford Fusion, and many more new models are in the pipeline.

Auto analysts expected Ford to show some improvement, but the announced numbers were a pleasant surprise for many.

Ford Motor Co. posted a surprise profit of $2.3 billion for the second quarter — a sharp contrast to the whopping $8.7 billion loss it reported for the same period a year ago — but the profit was largely due to one-time gains related to its debt reduction moves.

Even with those special items removed, the Dearborn automaker surprised Wall Street with a pre-tax operating loss of $424 million for the second quarter of 2009, excluding special items — a $609 million improvement compared with the second quarter of 2008.

After taxes and excluding special items, Ford posted an operating loss of $638 million in the second quarter, or 21 cents per share, compared with a loss of $1.4 billion, 63 cents per share a year ago. That also was a marked improvement over the $1.4 billion loss — $1.8 billion after taxes and excluding special items — that Ford reported for the first three months of the year, when it lost 75 cents per share.

Wall Street had been anticipating a loss of 52 cents per share, after taxes and excluding special items, according to a survey of a dozen analysts by Thomson Reuters prior to today’s announcement.

“While the business environment remained extremely challenging around the world, we made significant progress on our transformation plan,” said CEO Alan Mulally. “Our underlying business is growing progressively stronger as we introduce great new products that customers want and value, while continuing to aggressively restructure our business and strengthen our balance sheet.”

It looks like Alan Mulally’s turnaround efforts are on track.

The incentives keep flying as the automakers try to move metal in this tough market.

Chrysler Group LLC, looking to clear out sales of 2009 models, will double the federal government’s cash-for-clunkers program that will launch Thursday.

Chrysler will offer up to $4,500 cash or 0% financing for 72 months through GMAC Financial Services on most 2009 model vehicles. These incentives are valid through Aug. 31, 2009.

The incentive program, designed to improve the fuel economy of the nation’s fleet, provides a voucher of either $3,500 or $4,500 for trading in a vehicle that averages less than 18 miles per gallon in combined city and highway driving and is not more than 25 years old. The amount of the credit is determined based on the incremental fuel-economy improvement between the old and new vehicles.

The Chrysler incentives will apply to any buyer regardless of the age and fuel economy of the trade-in vehicle, said Steven Beahm, Chrysler vice president of sales operations.

Ford announced that they will not match the incentives, which isn’t surprising given’s Ford’s recent success in the marketplace.

Many are hopeful that the federal government’s new cash for clunkers program will provide a much-needed boost to the American auto industry at a time when the recession is crushing auto sales. BusinessWeek, however, calls the new program a “lemon.”

The problem with the law is that it is both underfunded and too narrow to generate a spike in showroom traffic. Standard & Poor’s (MHP) says the most it will do is boost sales by 3% for the year; a similar German program pushed sales up 30% a month this year. “This is a waste of taxpayers’ money,” says analyst John Wolkonowicz of Boston research firm IHS Global Insight (IHS). “There won’t be enough people who can take advantage of it.”

First off, the feds have approved only $1 billion for the program. That could help fund the purchase of just 250,000 cars—not much more than a week’s worth at current sales levels—between August, when the program likely will start, and Nov. 1, when it ends.

Plus, the law makes little sense for most passenger-car owners. The government will cut checks of $3,500 to $4,500 to dealers so they can buy old cars that get 18 miles per gallon or less and then sell the owner a more fuel-efficient replacement. But most cars on the road get more than 18 mpg, so they won’t qualify. And many that are thirsty enough to warrant the deal are luxury models worth a lot more than $3,500 to $4,500. If a consumer can sell the old car for more than what the government will pay, there’s no reason to take advantage of the bill, says Wolkonowicz.

Yes, there are plenty of old cars that do qualify. But many are 10 years old or more, says Edmunds.com CEO Jeremy Anwyl. People driving cars that ancient often buy used, and even with a $4,500 discount, they probably won’t want to take on new-car payments during a time of economic hardship.

This is a pretty downbeat view. The article points out that the program should be bigger, but if it’s successful you can be sure that Congress and the Obama administration will push to expand it.

Reuters takes a much more positive view, pointing out that the law is spurring certain buyers to trade in old vehicles.

Having driven the equivalent of six smoke-belching laps of the planet, Tony Metzler figured his ageing Chevrolet Blazer SUV would not make a good trade for a new car. Until now that is.

With a $1 billion (621 million pounds) federal “Cash for Clunkers” program that pays consumers $3,500 or $4,500 in credit to swap ageing gas-guzzlers for new, more fuel efficient models, he made the plunge.

“It ended up being right place, right time for me,” said Metzler, 42, who traded his eight-year-old sport utility vehicle for a new Chevrolet Equinox this week. “It seemed like a good opportunity.”

The program signed into law by President Barack Obama in June offers a trade-in credit of up to $4,500 to owners of cars built since 1984, with fuel economy of 18 miles per gallon or less.

It also applies to SUV, vans and pickup trucks. Participating dealers assess the discount, apply it to the new vehicle, and then obtain reimbursement from the government. Details of eligibility are available at www.cars.gov.

Metzler, a Phoenix-valley insurance executive, had racked up 150,000 miles (240,000 kilometres) in his old SUV that averaged 17 miles per gallon. He got a $3,500-credit towards his new car, which gets a slender 3 mpg improvement.

The program, which backers hope will arrest the auto industry’s slide and sell 250,000 new vehicles this year, runs through November 1 or until funds are exhausted. It has been broadly welcomed by auto dealers across the country.

For more information on the program, check out Cash for Clunkers Facts.