Hurricane Harvey Destroyed More Vehicles Than Any Single Event in America. This Is the Aftermath

From the March 2018 issue

Disasters are always fascinating. From fender benders to war, humans will stop and stare at the tragic, the grotesque, the hideous. In early December, I watched a massive plume of malevolent brown smoke moving over Ventura, California, threatening my hometown of Santa Barbara. I was mesmerized by the Thomas Fire, like everyone else. But it wasn’t just the physical proximity of the flames that captivated me. I had just returned from Houston, which was still picking up after the devastation of Hurricane Harvey. Last year, as August came to a close, Houston was hit with nearly 52 inches of rain. At least 88 people were killed, and thousands lost their homes. Reports also estimate that up to a million cars were destroyed in the widespread flooding, as many as half of which were in Houston, America’s fourth-most-populous city.

That’s a huge number, but it would make sense. The city of Houston has 2.3 million residents and spreads out over 627.5 square miles. Throw in the suburbs, and the metro region expands to 6.3 million residents and almost 1300 square miles. There are some buses and light rail running in the city’s urban core, but both get scant in the vast sprawl beyond. The Texas Department of Motor Vehicles had more than 3.5 million cars registered in Houston’s Harris County during 2016—and seven other counties border Harris. Few places are more car-dependent than rapidly growing, economically vital, multicultural but wholly Texan Houston.

By the time I arrived, nearly four months after the storm, Harvey was a thriving business. The city was superficially okay; the occasional Whataburger was boarded up, and building supplies were stacked up alongside gutted houses, but life was moving on. There weren’t hulls of abandoned cars along the roads because even flooded junk represents at least a few hundred dollars of value. To find out how the local car business in Houston dealt with destruction of this magnitude, I spent four days following the money. This is what I saw.

The Porsche Shop

“I’ve lived in Houston four years,” says Jordan Remeljej, an Australian who founded Modern Aircooled in 2015 and runs the Porsche-only repair shop and car-guy hangout. “I’ve seen three major flooding events that I’ve read in the papers were ‘once in a lifetime.’ We have a habit here, during violent storms, of watching TV and drinking until we go to sleep.”

Modern Aircooled sits in a small, old former window-factory showroom in the Heights. “The difference between this particular flood event and the other two that I’ve experienced is that this time,” Remeljej explains, “the wealthy neighborhoods got flooded.

“We were well prepared,” he continues, “because we’ve seen it happen and we didn’t want to be complacent about things. A lot of clients called and asked, ‘How’s the shop?’ I’d say, ‘How’s your home? If you think you’re in danger of flooding, leave your car here. We’ve got all the insurance in the world. We’re okay.’ If this place goes substantially under water, no one cares about their car anymore. At that point, the whole city is under water. We had one car here, a GT3 race car, that was the only car a guy had left. He lost a Ferrari 430 Scuderia, a BMW M3, his toys, and his truck.”

At Modern Aircooled, Peter Lobona and Jordan Remeljej have a passion for Porsches. Socks? Not so much.

While Modern Aircooled got a sheen of water across its floor during Harvey, its challenge afterward was deciding what kind of jobs it could handle.

“We started getting calls,” Remeljej says. “ ‘My convertible top is trying to go down when I’m on the highway,’ or ‘It got a little wet on the floorboards.’ We would ask, ‘Was the car running when this happened?’ And if it was, we’d say, ‘We’re not interested.’ We don’t have the space or size to deal with internal engine damage and things like that. We don’t have the cash flow to be waiting on big insurance claims. We chose jobs that we knew we could get the car back as good or better than it was. And we could do it without involving insurance for a reasonable price based on the value of the car.”

As for owners whose Porsches had drowned? “We just had to refer them to the dealerships.”

The Wrecker

“I’ve been doing it since I was 13,” Vincent Liggio says with his deep drawl, reflecting upon his many years in the towing business. “It’s in my blood.” Running out of the Houston suburb of Dickinson, Liggio’s fleet isn’t big, but it’s seen a lot.

“Everybody was going to watch the Mayweather and McGregor fight,” he says about Harvey’s start, “and by the time the fight was over, people came out and were like, ‘Oh, we’re in trouble.’ ”

At first, Liggio’s four flatbeds responded to calls from law enforcement. But he soon had to take matters into his own hands: “After a while, there were so many of them, they just said clear the roads, and I’d call the dispatcher and tell them what I’d picked up. It didn’t show mercy on anybody. It just took the cars.”

Vincent Liggio and Mike Sabatier with the company’s one surviving flatbed.

Liggio and his drivers retrieved cars two at a time, one on the bed and one towed behind on a “stinger.” Whatever made it back to the shop was stored, bumper to bumper and door to door, in a nearby lot. “If it had water in it,” he says, “the insurance company would total it. If it wasn’t insured, we did the best we could for the owner. Cars were everywhere. We couldn’t pick them all up.”

In fact, there were so many cars floating (or sinking) that tow trucks were coming in from out of state to reap the harvest. Insurance Auto Auctions, a major player in the U.S. auto-salvage game, alone contracted with a reported 1000 wreckers. The state of Texas wasn’t paying Liggio to store the uninsured cars. After two registered letters were sent from the state to the owners without any response, a salvage title would be issued and Liggio could claim the hulls and send them to auction. “We were lucky if we got $200 a car,” Liggio laments. He retrieved about 100.

But the water that corroded the electronics in those abandoned cars was tough on his Ford F-650 trucks, too. Down to one tow vehicle after the flood destroyed three of his rigs, Liggio was looking to borrow another when I spoke with him. “I have the drivers, but I don’t have trucks. By the time I fix my trucks and stuff, I’m going to lose money.”

The Dealer

“I hit a red car with my Jet Ski,” explains Carter Dale, who had taken to the streets of Houston by watercraft. “I ran right over it.” Dale’s family owns and runs McRee Ford in Dickinson. In total, the dealership would lose 1100 new, used, and customer vehicles to Hurricane Harvey. It was the Ford store that sank.

McRee Ford has a prime spot fronting I-45, the Gulf Freeway, where the grandeur and epic scale of the dealership’s year-old, 96,000-square-foot building attracts passing drivers. Still owned and run by the family of Frank McRee, who started the business in 1947, it’s physically the sort of dealership that Ford would want all its stores to be. At least when it’s not submerged.

“The water came in everywhere,” recalls Dale, McRee’s great-grandson. “We had to destroy $61,000 worth of new tires. Drilled holes in all of them. The insides of tires aren’t made to get wet.”

McRee Ford’s back office kept going on folding tables.

While the flood swamped the parking lot, water only lapped fitfully toward the showroom where specialty vehicles such as GT350s and Focus RS models were positioned. So of the 15 vehicles that escaped unscathed, most were of the compelling variety. A restored 1965 Mustang convertible, the showroom centerpiece belonging to family patriarch and dealer principal Mitchell Dale, also survived.

As for the others, Ford insisted that all of McRee’s flooded new inventory—about 450 vehicles—be crushed. A fleet of trucks came in to haul them away, a difficult project since so few of them still ran. And by the time some of the new pickups reached the crusher, their valuable and easily removed tailgates had gone missing. Go figure. The customer cars awaiting service at McRee were handled by owners’ insurers; most went to salvage auctions.

Carter Dale in the body shop at McRee.

As Harvey hit, however, the McRee Ford inventory was a secondary consideration. The family lives in the area, and the dealership’s 180 employees faced challenges of their own. Fortunately, every one of them survived and most are now back at work. Rebuilding the bottom floor of the dealership meant improvising systems to get the business moving again. The parts department relocated to tables set up in the huge service area; service writers were working on desks in the reception area; and the body shop and oil-change operations were shuttered until those facilities could be dried out. “No one said, ‘It’s not my job,’ ” Mitchell Dale says gratefully. “We’ll end up running better now than before the storm.”

By September 7, just days after the storm ended, the dealership was back in business selling new cars again. In addition to the post-Harvey demand for new vehicles, Ford’s “Texas Is Family” promotion, which offered employee pricing to anyone who lost a vehicle to the flood, made September the best month yet for new-car sales at McRee—385 units. “But I don’t want to go through another hurricane to have another record month,” says Mitchell Dale.

The Auctions

It’s a ballet performed by a dozen or so yellow 15-ton Volvo L90E wheel loaders owned by online auction company Copart, dancing through the 400-acre grounds of Royal Purple Raceway in Baytown, Texas. Ripping between rows, rows, and more rows of flood-damaged vehicles, the big Volvos seek their prey. When they find the right car or truck, the articulated machines turn into it while hardly slowing, their long forks shoveling the vehicle into an old tire serving as a bump stop. An L90E lifts pickups into the air as easily as you would pick up a dropped pen. At that point, the loader swings around and hightails it back to dump the salvaged vehicle onto a waiting trailer near the raceway’s entrance.

This process goes quickly because there are a lot of cars to move. At one time, Copart was storing 30,000-plus cars at Royal Purple.

Insurance salvage lots around the country dispose of totaled vehicles every day, part of an industry that operates in anonymity until an event like Harvey hits. Then massive temporary lots like the one at Royal Purple become the stars of YouTube flyover-drone videos, and the online auctions themselves attract thousands of fresh eyes digging for bargains. These lots are where vehicles with salvage titles—the scarlet mark of automotive marginalization—go to find new homes.

Dennis Wynne came out of his Florida retirement to inventory flooded vehicles from Houston-area dealerships.

Copart’s loaders feed an hours-long line of dualies extending off the Royal Purple lot and onto the FM 565 highway. Each is towing a one- or two-car trailer and working too hard to be washed. When the drivers get close to the loading area, they go to the drag strip’s box office, show their paperwork, and get the retrieval slips.

Along the edge of the property is a celebrity row of ruination: a Ferrari 488 Spider, a Rolls-Royce Phantom Drophead Coupé, and various Teslas, Porsches, and Nissan GT-Rs. These delectables inspire fantasies of easy rehab and exotic motoring, but reality is more daunting.

The astounding volume of Copart’s lots—the massive one at Texas World Speedway finally finished off that facility’s motorsports operations—obscures the fact that there are opportunities for smaller players. A few miles down the road from Royal Purple, along I-10 but still in Baytown, is a 13-acre plot usually used as an equipment yard. But in the aftermath of Harvey, it became a parking lot for flooded brand-new vehicles acquired from dealerships—the inventory for the salvage-car bidding site SalvageNow.com.

“This is catastrophe-only business here,” says Dennis Wynne, who came out of retirement in Florida to manage the lot. “It’s testing our system in the field and generating some revenue from the cars, too.” Beyond Wynne, there was one guy to man the gate and two to move cars around.

Harvey drowned cars with no respect for class or price.

Still wearing dealership paper plates, the Buicks, GMCs, Hondas, and Volkswagens look perfect. “All of them are on a salvage title, rebuildable,” says Wynne. “They are branded for life and their warranties are void. They are what they are. We’re somewhere close to 3000 cars. I’ve kind of lost count. But they’re still coming in. It’s been what? Four months?”

A veteran of previous catastrophe operations, Wynne appreciated some aspects of Harvey. “Kind of a nice experience,” he explains, “to have cars that actually had clean water go into them and clean water go out of them. That’s not too bad.”

Selling only to dealers, most of Salvage-Now’s cars will wind up rehabbed and back on the road somewhere. “We have overseas buyers on our website that come in and bid on a group of them so they can get them in containers and overseas.”

Each car has quirks, but common problems involve electronic parking brakes, shifters, and other modules. After some prodding, Wynne found the key fob for a blue 2017 Honda Civic Si coupe with four miles showing on the odometer. It started with the first press of the button—and then the dash ignited to display myriad warning lights: the brake-hold, power-steering, VSA, hill-start, electric-brake, tire-pressure-monitoring, emissions, and brake systems all represented. Who knows how many fault codes it would throw if it were hooked up to a diagnostic tool? But it drove like the brand-new Civic Si it is. At least around the SalvageNow lot, it felt ready to drive cross-country. Originally stickered at $24,790, it would likely sell for slightly more than $16,000.

“I’ve driven salvage-title and flood cars for at least the last 30 years,” says Wynne. “You get a good deal and a lot nicer car. [Because of Harvey,] I got a 2018 Honda Odyssey van that just left here yesterday heading back to Florida. I took it over to our home in La Porte, put it in the garage, and took it apart. Took all the interior out of it, dried it out. Put it back together and took it down to Honda, had them check everything on it. A couple hundred bucks and they certified it as fine. Put it on the truck yesterday and sent it to [our retirement home in] Florida.”

The End of It All

“With all these cars being flooded, the auctions are selling them pretty cheap,” says Angela Rodriguez, who works for Houston Auto Recyclers, a pick-a-part yard in the city. They’ve been stocking up on junk-car inventory at Copart auctions. “Anywhere from 150 or more cars a week. It’s helping our business on this side because we’re getting them at a lower price.”

Business has been booming, certainly helped by the number of damaged cars that need to be repaired. “Normally around this time of year, the number of picks coming in would drop,” says Tamara Ross, who helps run the lot with her husband, Harry. “But it’s been steady since the summer. This year compared to last year, we’re up.”

“We are crushing cars more than before,” adds Rodriguez. “We have to send out an extra load a day.”

Angela Rodriguez and Tamara Ross at Houston Auto Recyclers, where flood-damaged cars would be stripped for parts and the hulls crushed.

From the Houston Auto Recyclers yard, the crushed cars go to Houston’s ports as scrap metal and then get shipped overseas to be melted down into fresh steel—the eventual fate of almost all cars.

How many vehicles were destroyed or damaged during Harvey is easy to speculate about, but tough to pin down. And it depends on who is counting. Insurance companies seemed quick to total out cars touched by water. But not everyone carries comprehensive insurance, and no one knows how many flooded cars were simply abandoned or how many are being kept on the road by owners who can’t afford anything else.

The interior of a new Buick dries in the sun.

The Houston Police Department says it wasn’t keeping track of the abandoned vehicles. State Farm says it had settled 38,300 auto claims worth approximately $400 million by the middle of December. That’s one company, albeit the biggest one. The Insurance Council of Texas reports an industry-wide figure of 250,000 cars and just shy of $4 billion paid out. Throw in the uninsured fleet, and it’s an enormous number, what has to be the single largest incident of vehicular destruction in American history.

But this is just a blinkered glimpse of the larger tragedy. The insurance companies took about a $19 billion total hit for Harvey, not counting what FEMA paid out in flood insurance to the 15 percent of homes that had it. (Total spending on natural disasters in the United States hit a record $306 billion last year.) The silver lining is that all the systems—distribution, production, legal, insurance, family, charitable, and other—that were under considerable stress in Houston appeared to mostly work. But money is a Texas lubricant. Over in Puerto Rico, the recovery from Hurricane Maria has been agonizing. And many of the people living in Houston’s poorer Fifth Ward moved there from New Orleans after 2005’s calamitous Hurricane Katrina. Haiti reportedly lost more than 220,000 people in its 2010 earthquake and still hasn’t fully recovered. Insurance companies that pay claims quickly (or at all), legal systems that respect contracts (eventually), and governments that actually distribute aid (imperfectly)? They’re not universal. Comparatively, Houston had it easy-ish.