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By DAVID CLOUSTON

Salina Journal

ElDorado National president Sheldon Walle is keeping a watchful eye on news about the possible failure of one or more of Detroit's Big Three automakers as he monitors the inventory of commercial bus and van chassis his company -- and its 300 employees in Salina -- depend upon.

Automaker executives, along with the head of the United Auto Workers union, went to Washington on Tuesday to make their case to the Senate Banking Committee for a $25 billion emergency rescue loan package.

"A day doesn't go by that it's not in the back of my mind," Walle said Monday. "We're an (auto) body builder. And if we don't have a chassis -- that's the most fundamental part that we use."

Welcome to the reality about the far-reaching and unbridled pain rural America could feel under the outright failure -- unthinkable almost before now -- of all of the country's domestic automakers.

The bleak picture includes Salina manufacturers such as ElDorado and Weis Fire & Safety Equipment Co., makers of custom firefighting trucks and apparatus.

The demise of GM, Ford and possibly Chrysler would, say Salina auto dealers, swallow up their smaller dealer kin in places such as Abilene, Hays, Colby and Goodland. Those communities would suffer through the resulting loss of local sales tax revenue.

Millions of auto loan consumers, meanwhile, could suddenly owe far more than their vehicle's worth. Many used car dealers could face extinction, as well, since they buy the trades that the new auto dealers take in.

"This could be a real concern for GM and Chrysler products. Used car dealers will see increased value in Ford products, since Ford is the only domestic auto company not facing bankruptcy. Would you buy a car you couldn't get parts for?" asked North McArthur, company president of the Long McArthur dealership, 3450 S. Ninth.

Ford Motor Co. CEO Alan Mulally reiterated after his testimony Tuesday that the company's reserves of $29.6 billion in cash and credit would be enough to survive until 2010.

Millions of dollars in advertising revenue through newspaper, radio and television is also at stake without a government bailout to fix the automakers' problems, many fear.

"It's big. When I say it's Main Street, I really do completely, wholeheartedly and candidly say that this is a Main Street issue," said Tim Holm, president of Holm Automotive in Abilene.

At ElDorado's plant in southwest Salina, several hundred chassis at a time -- mostly from Ford's Econoline commercial truck line -- are spread across 34 acres. The company produces about 60 buses and 16 vans a week.

Walle estimates it would take from 90 to 150 days to retool the plant to begin accepting chassis built by automakers in Europe, Asia or Mexico, if and when those chassis become available to the U.S. That's if those manufacturers choose to produce vehicles that meet the tougher U.S. emission and safety regulations.

So far, there have been no warnings from the domestic automakers about a supply line disruption. Walle is playing it safe, just in case.

"We've got from four to five months worth of trucks on the ground. Whatever might occur ... we can easily plan for, and make time for, and not feel like we've been dropped in the grease," he said.

The majority of chassis that Weis Fire & Safety uses are Ford F350, F450 and F550 light duty models. The company currently has a six-month backlog of orders for 20 new fire trucks. It has nine chassis already purchased and in stock at Long McArthur Ford, president and general manager Mike Weis said.

Weis builds from 25 to 34 trucks a year from the chassis up.

"To be quite honest, we're very, very concerned," Weis said. "I would have some time to come up with a new chassis. But if something were to happen to Dodge and Ford and Chevrolet, we would be struggling to build the trucks our customers want."

In Abilene, Tim Holm's auto dealership advertising tag line is "Four great GM lines, all under one roof." For now, that is.

If GM and the others were allowed to be liquidated under Chapter 7 bankruptcy, Holm said Monday that the result would be "catastrophic."

"This is directly going to impact Holm Automotive, Bennett Autoplex, Warta Buick and maybe Long McArthur. It will cause quite a disruption in the automotive industry, up and down the ladder," Holm said.

Local parts stores, for example, would over time likely lose a significant part of their business, leading to less tax revenue for the state and more job layoffs.

Like Long McArthur, Holm Automotive does not carry an import line of vehicles.

"Foreign automakers have indicated to me that Salina is about as small a town as they'll put a dealership in," said Mike Money, owner and president of Warta Buick-Subaru-Suzuki, 2222 S. Ninth. "One of the reasons we got the Suzuki franchise is that there is no other dealership to service western Kansas, from Salina to Denver, and the same way with Subaru."

Holm said that without GM cars and trucks to sell, dealerships like his are at risk of closing or going solely to selling used cars.

He employs 40 workers and meets an annual payroll of about $2.3 million. From about $95,000 monthly in sales tax receipts that Holm Automotive remits to the state, Holm estimates that Dickinson County gets back $170,000 a year, and roughly $120,000 a year goes to the city of Abilene.

"And the rest goes to the state to be used in the general fund," he said.

"You figure that in Salina," new auto sales tax collections "might be four or five times as much. Maybe as much as ten times," Holm said.

Salina's city finance director Rod Franz said state law prohibits him from disclosing sales tax collection figures from local auto sales, because they're considered those dealers' proprietary business information.

Given that there's no justification for making the public think business is slow, it's tempting to be skeptical when auto dealers say their sales are strong. The Salina area dealers interviewed insist, though, that the Midwest buyer's market is bucking the domestic automakers' slump.

"People here who buy trucks, use trucks," said Derek Lee, general manager at Long McArthur. "When gas prices go up, they don't abandon the market."

Lee said Ford is the best poised of Detroit's big three to weather the industry tsunami. The company has $29 million in reserves, and although it lost $3 billion in the third quarter compared to a year ago, it's not threatening bankruptcy. It only seeks a lower-interest line of credit to help it transition to a leaner, more prosperous company, Lee said.

"GM is the fault of GMAC (its credit lending arm), which got heavy into mortgages," he said. "At Ford Motor Credit, they never focused on anything except lending money for vehicles."

Ford's financial losses have gone to worker buyouts and to stage a new-product blitz, Lee said. The company plans to replace 40 percent of its production with fresh models in 2009, including the highly-anticipated F-150 pickup and a new Ford Mustang.

Nationally, Ford sales in October were down 30 percent, but at Long McArthur, they were up 30 percent over the same period in 2007, Lee said. He said he's even been buying surplus inventory from Ford dealers in more economically-depressed parts of the nation.

Marshall Motors owner and general manager Larry Marshall said he doesn't think there's any choice but to keep the domestic automakers afloat with a rescue package. Import makers have only built plants in the United States in the last 10 years, he said.

"But in 60, 70 years, they will face the same problems," the domestic makers are confronting now.

"If something were to happen to Chrysler, we would make up the difference by increasing our Nissan sales," said Marshall, who also sells Dodge and Nissan cars and trucks.

"The commercial part of the business would be lost, the commercial market for three-quarter, one-ton, ton-and-a-half and two-ton trucks. Import makers do not build those kind of vehicles," he said.

And, Marshall warned, don't think that the loss of competition won't have an effect on what the import automakers charge.

"You think a Nissan Versa is going to stay at $11,000 if the competition goes away? Domestics kept import prices down as they both fought for sales," Marshall said.

n Reporter David Clouston can be reached at 822-1403 or by e-mail at dclouston@salina.com.

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