While cash-strapped Canadian and US automakers anxiously await news of a possible government bailout, Whitehorse auto dealers have all reported that the crisis has failed to affect sales or local consumer confidence.
“We’re status quo right now — we haven’t seen any differences,” said Tammy Hamilton, general manager of Klondike Motors, Whitehorse’s GM distributor.
“Right now, we’re just waiting for the manufacturer to get back to us,” said Nathan Lam, general manager at Metro Chrysler.
Without immediate government assistance, Chrysler and General Motors Corp. say they could be weeks away from bankruptcy.
“Everybody’s just waiting while we see what type of funds are given towards the auto industry in the US and in Canada,” said Hamilton.
“From what I understand, the help is going to be there for them — and then everything keeps going,” she said.
“I think the entire economy is holding their breath on this decision,” she said.
Last week, a US government plan to provide Chrysler and GM with $14 billion in emergency loans fell flat after failing to pass the US senate.
The White House has stated it is looking to assist the automakers with cash taken from the $700-billion Wall Street bailout, although US President George Bush has said that he is wary of using taxpayer dollars, only to “have the same old stuff happen again.”
Last Friday, Canadian Industry Minister Tony Clement told reporters that the federal and Ontario governments will provide Canadian-based auto manufacturers with an aid package equivalent to 20 per cent of whatever is authorized by the US.
The Wall Street Journal has reported that GM executives have begun “considering” bankruptcy protection.
“We’ve not talked about any contingencies and we haven’t heard about GM passing through any contingencies at this point,” said Hamilton.
Ford, the most financially secure of Detroit’s “Big Three” automakers, has declined emergency government financing, saying that is has enough cash to last through 2009.
“I’m confident Ford isn’t going to collapse or go bankrupt — I’m absolutely certain of that,” said Tina Woodland, general manager at Ford’s Whitehorse Motors.
In the first quarter of 2008, Ford was generating profits, noted Woodland.
By contrast, in the first quarter of 2008, GM and Chrysler lost $3.3 billion and $515 million, respectively.
“This credit crisis was just bad timing, (Ford) was well on our way to continue being profitable,” she said.
Whitehorse has been immune to many of the economic forces that have struck hard at car dealerships in southern regions. The rugged conditions of the Yukon have ensured a heavy demand for large trucks — even while rising gas prices have eroded truck and SUV sales in the South.
Whitehorse’s large population of government workers has also ensured an economy relatively immune to the credit crunch hitting the private sector.
“We’ve got a nice bubble here in the Yukon — we’re certainly isolated from the rest of the country,” said Woodland.
If either GM or Chrysler should fail, Ford’s primary worry is of losing its supplier base.
“People that supply parts — all the things that feed the car industry — they would be affected negatively by a GM or Chrysler bankruptcy, and that, in turn, would negatively affect everyone else who builds cars in North America,” said Woodland.
Preventing a total collapse of Detroit automakers could cost between $75 and $125 billion, reported Moody’s Investor Service chief economist Mark Zandi in an early December testimony to the United States Congress.
A 20 per cent Canadian bailout could therefore cost as high as $15 billion to $25 billion, reported the Globe and Mail on Wednesday morning.
Contact Tristin Hopper at