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.
“I know it’s not great everywhere, but this is probably the worst place to find a job,” said Doug Zupan, a designer who took a buyout in November after working at Chrysler for six years. He was one of 5,000 salaried workers who accepted a buyout the day before Thanksgiving from his job at the Chrysler Technical Center in Auburn Hills, Mich.
Mr. Zupan, a 35-year-old father of three preschool-age children, said he was stunned by the sudden and rapid decline in an industry suffering through its worst sales in more than 25 years. “I am going to do my best to get out of the auto industry,” he said.
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.
Jim Badhorn was a Chrysler engineer for 21 years before he took the buyout. Among his accomplishments was designing the rear doors of the Chrysler 300 sedan, one of the company’s last hit products.
Recently, he attended a job fair held by a military contractor but was quickly disappointed. So many people showed up that the police blocked off the parking lot, he said. “You couldn’t even find the end of the line.”
He considers himself fortunate to be a renter in the Detroit area, where the “for sale” signs are multiplying. “I have friends whose houses have lost 40 percent of their value,” said Mr. Badhorn, who lives in the suburb of Birmingham.
Last November, every white-collar worker in the company was offered a one-time buyout — $75,000 for those with 10 years or more and $50,000 for those with fewer than 10 years. With Chrysler on the brink of collapse without more federal loans, Mr. Badhorn grabbed the buyout and put much of his $75,000 into a college fund for two of his daughters.
Frustrated by the tight job market, Mr. Badhorn works off his stress by hitting the gym every day. He’s lost 15 pounds since November, but it hasn’t made him feel any better about his circumstances. “I’ve pretty much come to the conclusion that I’m going to have to move if I want to earn what I made before, or close to it,” he said.
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.”
The unemployment rate for white-collar occupations in Michigan was 5.4 percent in the fourth quarter of 2008, a full percentage point higher than the national average for those jobs, according to Department of Labor estimates.
Mr. Zupan’s $50,000 buyout from Chrysler is supporting him, his wife and his three children — ages 4, 2, and 6 months — while he looks for work. He’s finishing a master’s degree in business administration at the University of Michigan, paid for until last semester by Chrysler, when it could afford to invest in the education of its white-collar staff. He recently took out loans to have an additional financial cushion.
His last nest egg is the 300C he bought with his $25,000 buyout voucher. Mr. Zupan said he might sell it if he needed the money.
