Tuesday, February 17, 2009

NY Times on White Collar Workers in Detroit

From the NY Times --

DETROIT — For all the ups and downs, and more downs, that white-collar workers here have lived through, they have always managed to put on a brave face, assuring one another that the American auto industry will come back stronger than ever.

But now that resolve has given way to grim resignation, as General Motors, Ford Motor and Chrysler have announced wave upon wave of job cuts.

After closing plants and shrinking their blue-collar work force, Detroit’s troubled Big Three are cutting white-collar jobs in their hometown at an unprecedented pace — more than 15,000 in the last year, with more to come.

Unlike union workers laid off from idled factories, salaried workers have no safety net of health care or guaranteed income for a year. At best, it’s a small severance or buyout, and a voucher for a discount on one of the hundreds of thousands of unsold cars that G.M. or Chrysler has sitting in inventory.

White-collar workers who walk out of the headquarters of the auto companies face few prospects in the Michigan economy. And with G.M. and Chrysler surviving on federal loans, facing a deadline Tuesday to submit new and broader restructuring plans to the government, the outlook grows only more bleak.

The market for the skills of auto engineers or designers in the prime of their careers has evaporated, with no hope in sight for a turnaround. Moving to another city is hardly an option when there are so few buyers for the suburban homes that would have to be sold first...

G.M., Ford and Chrysler have eliminated a total of 120,000 manufacturing jobs in the last three years. And now the cuts are drastically thinning the ranks of white-collar professionals, turning the once-bustling office towers of the companies into half-empty monuments to better days.

G.M. delivered another blow last week when it said it would reduce its global salaried work force by 14 percent, or 10,000 workers this year. In the Detroit area, that could mean an additional 3,000 workers will be out of a job by May 1. G.M.’s next round of white-collar cuts will not include buyouts. Chrysler has not said whether it plans more cuts.

The Detroit area housing market, already deeply depressed, has plummeted since the buyouts. In January, the foreclosure rate increased 102 percent from the same month a year earlier in Oakland County, Mich., home to a huge number of G.M. and Chrysler employees.

The state’s unemployment rate was 10.6 percent in December and continues to climb. Job fairs routinely create mob scenes, drawing thousands of out-of-work employees of the Big Three and their suppliers...

The cuts are extending to the vast network of employees who worked on contract to the Detroit companies. Craig Meyer, employed by a supplier named Aerotek, was told by phone that his seven years as a contract designer at Chrysler were over as he was driving to the home of his in-laws the night before Thanksgiving.

Mr. Meyer has been collecting unemployment since, although the $362 he gets a week is less than half what he was making at Chrysler. “We’re just about able to pay the bills each month,” he said. “Food and gas is when we need to start to dip into savings.”

The prospects are getting worse for Detroit, not better. Last year, United States car sales dropped 18 percent, to 13.2 million, and industry executives expect just 10 million car sales in 2009 and possibly for years to come.

“Those white-collar jobs aren’t going to come back any more than the blue-collar jobs are,” said Kevin Boyle, a Detroit native and author of historical books on the city. “As bad as it is everywhere, it’s not as bad as it is in Detroit right now.”

1 comment:

Padmanaban said...

Job trend has changed nowadays as most of them are looking for white collar jobs. There are lots of job openings since many companies are in need of smart employers with adequate knowledge