While Detroit's Big Three - General Motors (GM, Ford and Chrysler) - wait on tenterhooks for their multibillion-dollar bailout plan to pass Congress, local dealer GM Challenger does not think the events in the United States will affect its bottom-line in the short term.

"GM is a global entity. Most of the products sold by GM Challenger are made in Korea by an arm of GM that is more stable than its US counterpart," Nigel Pagon, CEO of GM Challenger, told The Gleaner yesterday.

Pagon said that, globally, the products were faring much better, and it was [mostly] products made for the United States market that were suffering.

"However it is troubling to see the state that GM America has found itself," he added. "The automaker is struggling under the tremendous duress that the unions, which have secured a US$77 per hour wage package for autoworkers - has created; also GM is a century old this year and also has to pay 500,000 pensioners. The balance of profitability is slanted heavily against them."

Pagon went on to stress that "US Auto companies are major defence contract holders, and this is a big reason why I think they will get the funding".

Chrysler plans to extend its traditional two-week, year-end factory closure to the week starting January 26, which will allow it to sell excess inventory and forego operating expenses for two additional weeks. Under current conditions, Chrysler could be on its last financial legs by the end of the year, according to USNews.

Local dealer Motor Sales could not yet comment on their state of affairs; unlike GM and Ford, Chrysler's global products are made stateside.

Wait and see

Ian Lyn, brand sales and marketing manager for Motor Sales, said: "We'll just have to see how it pans out."

Kent LaCroix, sales manager of the KIG group, said: "It is too early to tell. I wouldn't want to even guess what would happen."

Of the three American automakers, Ford seems to be in the most stable financial position. KIG also markets products from Ford that are made in Thailand and Europe.

mario.james@gleanerjm.com