KEY POINTS:
For sale: four-bedroom detached bungalow, some work needed, cost: US$800 ($1357).
The catch? It's in Detroit, home to the once mighty Ford, General Motors and Chrysler, and not many people want to live in the Motor City now that the American car giants are laying off tens of thousands of workers.
The bungalow is not the only bargain-basement property up for grabs: thousands of others are on the market for US$10,000 or less.
One estate agent who has sold 50 properties - mostly foreclosures - in Detroit is trying to remain upbeat but admits: "It is a blue-collar town like a lot of other American towns, but it has been hit harder than most."
He says houses are going for US$5000 while neighbours struggle to pay a US$60,000 to US$70,000 mortgage on an identical property. "It's obviously devastating for them."
The Detroit property market and the United States car industry are mirror images: both are in freefall. Speculation is mounting that the Government is planning a bailout of the giant Detroit Three.
Last week, presidential candidate Barack Obama added to the clamour, calling for a doubling of the US$25 billion in Government loans recently approved by Congress to help the industry make more fuel-efficient cars.
Washington is also said to be trying to engineer a merger of GM and Chrysler as analysts predict the latter's new owner, private-equity firm Cerberus, could pull the plug on it.
Without dramatic Government intervention, analysts predict all three companies will run out of money some time next year.
On the other side of the Atlantic, the mood of carmakers is less grim.
But not by much, as they fear they could be next in line: carmakers are slashing production across the board to cut costs as sales slump.
In Britain, Japanese firm Honda last week said it would cut output by a tenth - 32,000 vehicles, rather than 22,000 as previously planned.
All the other five major carmakers in Britain - Toyota, Nissan, Jaguar/Land Rover, Ford and GM - have made similar moves, putting workers on four-day weeks and getting rid of overtime and agency shift workers. No one knows how many "temporary" production cuts will be made permanent, or when - as will surely happen - jobs are shed with output.
The clamour in Europe for some kind of bailout is also growing as carmakers ask why the banks should get all the help. Last week, the European Commission said up to ¬40 billion ($85.5 billion) of "soft loans" could be provided to the industry by the European Investment Bank.
Ostensibly, like the US plan to provide US$25 billion, this would help companies retool their factories to meet tough EU legislation being proposed to cut carbon emissions from new cars. But if the industry wasn't in crisis, it is unlikely this money would be on the table and, if approved, it would be a bailout in all but name.
It's hard to exaggerate the scale of the crisis facing the Detroit Three; in many ways, they are in a more parlous state than the banks. In 2000, the high-water mark for the industry, the combined stock market value of Ford and GM was more than US$130 billion.
Today, you could pick up both for US$10 billion and still have change. Citigroup analysts reckon they carry US$69 billion of debt between them.
Since 2005, the companies have been haemorrhaging money: in the first half of this year they lost almost US$30 billion.
Global Insight analyst Paul Newton says: "The big three are in severe trouble. The past couple of years have been a bloodbath."
And how did they get themselves into this mess? More than any other incumbent carmakers, they've been outwitted by nimbler, more efficient - and cheaper - foreign rivals.
Twenty years ago, more than two-thirds of cars made in the US were manufactured by GM, Ford and Chrysler. This year, according to the Centre for Automotive Research, for the first time foreign carmakers, led by Toyota, will overtake them.
The trio have also been hamstrung by the ruinous cost - estimated at US$100 billion - of providing healthcare for two million current and former workers. Last year, a landmark agreement with the UAW union capped these liabilities, but the damage had already been done.
That was not all. Soaring fuel prices have soured Americans' love affair with big, powerful sports utility vehicles and boosted sales of smaller cars - more typically made by the big three's rivals.
When the credit crunch took hold a year ago and property sales plummeted because of the shortage of credit, car loans also began to dry up. In response, the three companies have announced plans to close 35 plants, mostly in the area around Detroit, with the total loss of 100,000 jobs.
GM and Ford are looking to expand operations in lower-cost places, such as Mexico, China and Africa.
But this restructuring, huge as it is, already looks hopelessly inadequate to stem their ballooning losses.
With recession looming, credit, for the few people contemplating buying a new car in these straitened times, is even harder to come by.
The financing arm of GM recently announced lending restrictions which, dealers estimate, would prevent almost two-thirds of would-be GM buyers from finding a loan, and Chrysler has made similar moves.
Toyota plans to take advantage, according to Citigroup analysts, by offering interest-free loans on 11 models, which will only hasten the decline of the Detroit Three.
Citigroup predicts a 35 per cent sales slump overall last month compared with last year, with GM and Chrysler even worse hit as they withdraw credit. US car sales will pick up - most analysts predict a recovery in 2010 - but to what extent the big three will benefit is unclear.
PWC estimated in September that they planned to cut production by about one million vehicles by 2012, but this may not be enough.
Newton says: "The question is whether the big three can cut jobs and close factories, particularly in the US, quickly enough to offset their losses.
"Their current restructuring plan is based on last year's industry forecasts. However, the outlook is far worse now. It's touch and go."
He also doubts whether the rumoured merger of GM and Chrysler would do more than delay the inevitability of further plant closures and job losses by a couple of months.
Summing up the apprehensive mood among carmakers in Europe, Carlos Ghosn, chief executive of Renault-Nissan, said recently: "We don't know if we're at the beginning of the end or the end of the beginning."
European carmakers no longer look on at the plight of the big three with the sense of detachment they had a year ago: the question now being asked in boardrooms across the continent is: "Could it happen to us?"
The situation is certainly tough in Britain, but the news isn't all bad. Last week, Ford announced plans to invest £70 million ($187 million) in its Bridgend assembly plant and BMW is building a new electric Mini at Oxford.
Even if EU legislation on carbon emissions is watered down or delayed, as the industry wants, the trend towards more fuel-efficient cars will benefit Britain's Japanese carmakers, who tend to make smaller, more efficient vehicles.
But the last remaining Ford and GM plants in Britain are more vulnerable. The future of Ford's Southampton Transit van plant and GM's plants at Luton and Liverpool is in doubt.
Both companies have a lot of capacity all over Europe and may want to retrench to their German bases.
How Britain's Jaguar/Land-Rover, bought by Indian conglomerate Tata last year from Ford, can also halve its gas guzzlers' emissions is not clear.
In mainland Europe carmakers can count on Government intervention to help them survive.
British carmakers aren't so lucky. PWC estimates UK annual production will fall by about 12 per cent to 1.5 million vehicles by 2012, compared with 8.6 per cent in France and 3.7 per cent in Germany.
The crisis will only hasten the inevitable: the shift of production to cheaper countries such as India, China, Russia and Thailand.
Who will emerge from the biggest shake-out in the industry's 100-year history to lead the march into the new markets is not clear. But don't bet your house - even if it's in Detroit - on any one of the big three.
- OBSERVER
