THE local arms of American carmakers General Motors and Chrysler face an uncertain future as their parent companies look to stave off a collapse brought on by dwindling sales and skyrocketing debt.

While the Singapore subsidiaries of the United States giants say they are optimistic about the future, company officials skirted questions about how they would survive the collapse of their American parents.

Experts, though, say optimism would be short-lived if the Detroit automakers, which are quickly running out of cash, are forced into bankruptcy.

Said transport economist Michael Li from Nanyang Technological University's business school: "After all possible measures to save the parent company fail, they will have to sell off the subsidiaries and liquidate all assets.

"In fact the more profitable they are, the more likely they are to be sold off."

GM, Chrysler and Ford Motor ? known as the industry's Big Three ? have seen sales plummet as drivers flock towards smaller and more fuel-efficient foreign vehicles.

The companies have been petitioning the US government for up to US$25 billion (S$38 billion) in emergency loans to prevent their collapse.

This is in addition to US$25 billion approved in September to help retool plants to build more fuel-efficient vehicles.

On Tuesday, even as the heads of the auto giants pleaded for four hours with US lawmakers, the response was cold.

GM, the largest car manufacturer in the US, has warned that it may run out of money by early next year.

A spokesman for General Motors Overseas Distribution Corporation, based in Singapore, however, would not comment on that eventuality.

Instead, she said the Asia-Pacific region remains on a "growth path" with record sales in the third quarter and strong demand from China and India.

Chrysler South East Asia also pointed to growing volume in Asia even in the face of "these most difficult times".

Asked if operations had been affected by its US arm's financial difficulties, managing director Peter Mackenzie said: "I believe our time will be better spent focusing on how to maintain our positive performance."

Ford Motor, which has also sustained heavy losses in the US, does not have a local subsidiary. Its cars are sold by Vantage Automobile, which also deals in Peugeots and Land Rovers.

Vantage's managing director Say Kwee Neng pointed out that Ford models here come from the carmaker's European arm, which has remained "highly profitable" so far.

"There is no indication from the people that we are in contact with that we should be concerned about the situation in the US," said Mr Say.

American car makes accounted for 2 per cent of the roughly 74,700 cars sold in Singapore for the first nine months of this year.

The local arms of GM and Chrysler handle the distribution of vehicles to regional dealers.

This article was first published in The Straits Times on Nov 20, 2008.

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