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Flexible skills and an ability to adapt to changing conditions are crucial to keeping a white-collar job in the auto industry. "You can't just be an engineer, you have to be the kind of engineer they need," says Kumasi Rayford, a GM design engineer.Working in Michigan
As best auto jobs fade, careers, lives disrupted
Big 3 white-collar workers turn to transplants and suppliers
Some automakers and suppliers are adding white-collar jobs in Michigan. Some examples:
Hyundai Motor Co. is building a $117 million technical center in Superior Township near Ann Arbor that will create 400 jobs by 2010.
This is part of a continuing Detroit News series on the state of Michigan's economy. The periodic special reports will examine the impact of structural economic changes roiling Michigan, study job trends and examine the future of the state's economy.
Rich Sajdak, a former contract engineer at Chrysler, says upheaval in the automaker's white-collar ranks led him to a new job at Nissan Motor Co.'s tech center.
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The path to profits for Detroit’s Big Three automakers has taken a huge toll on jobs in Michigan.
Over the past four years, the number of auto-related jobs in the state has shrunk by 21 percent, falling to the lowest point since the recession-era levels of 1991.
It’s part of the price paid to restore profitability at the Big Three — and the grim consequence of the domestic automakers’ relentless drive to shed costs.
As of April, 274,000 people were employed in the industry statewide, compared to 347,000 workers during the same period in 2000, according to the Michigan Department of Labor & Economic Growth.
The job losses have rippled through communities across Michigan, forcing laid-off white-collar workers to relocate, seek retraining or switch careers.
But there are few available jobs outside the industry that come with the pay and benefits of a Big Three position.
“They claim all these jobs are out there, but nothing has come through,” said Michael Francis, a 56-year-old parts buyer who was laid off after 18 years with the Chrysler unit of DaimlerChrysler AG. “I’m discouraged.”
Where once General Motors Corp., Ford Motor Co. and Chrysler offered abundant career opportunities for salaried professionals, prospects for job seekers are limited at best.
“It’s never going to be like it was 20 years ago,” said Robert Nichols, vice president of corporate relations at Kettering University in Flint, a training ground for Big Three engineers for decades.
Moreover, the most visible job growth is found among suppliers and Asian automakers expanding their operations in southeastern Michigan.
Rich Sajdak, a 35-year-old former contract engineer at Chrysler, said the constant upheaval in the automaker’s white-collar ranks led him to a new job — at Nissan Motor Co.’s technical center in suburban Detroit.
“It seems that every time there was a crisis, there was a lot of uncertainty followed by reorganizations,” said Sajdak. “I didn’t see much stability there going forward.”
When the Big Three downsized in the past, the pain was primarily felt among factory workers on the assembly line. But times have changed.
General Motors Corp., for example, has cut its hourly work force in Michigan by 14 percent since 2000, and its salaried employees by a comparable 12 percent.
Contrast that to the late 1990s, when GM reduced its hourly payroll by 35 percent and its white-collar staff by just 2 percent.
Layoffs and early-retirement programs have helped the Big Three shave fixed costs and return to profitability in the ultra-competitive U.S. auto market.
Pinching pennies
In previous economic cycles, the automakers routinely expanded their white-collar work forces when the profits flowed.
But that scenario seems unlikely in the current penny-pinching environment.
“I don’t think the numbers are going to spike up because we’re so committed to improving our productivity,” said Nancy Rae, Chrysler’s head of human relations. “The bar is rising as far as competitiveness.”
Faced with declining market shares, sky-high incentives and escalating health care costs, the Big Three have cut costs with a vengeance.
“There’s not much they can do with their health care liability, so they’re cutting workers and consolidating operations,” said Sean McAlinden, director of the Center for Automotive Research in Ann Arbor.
Senior executives at GM, Ford and Chrysler contend that the worst is over for the white-collar ranks and that no additional job cuts are planned.
“We had cost problems, business issues,” said Joe Laymon, Ford’s human relations chief. “I think we’ve got the business model fixed. The opportunity for managers and supervisors to have good careers is still there.”
The most visible job growth, however, is in the supplier base and among Asian automakers expanding their engineering, research and design operations in southeastern Michigan.
Suppliers draw recruits
Rather than competing against long odds for an entry-level job at one of the Big Three, young engineers and white-collar professionals are turning in increasing numbers to foreign firms and suppliers.
“GM used to be 100 percent of our business,” said Nichols, of Kettering University. “Now the Big Three combined is less than 20 percent.”
GM still has the most students in Kettering’s cooperative education programs, but the next largest enrollments are from mega-suppliers Delphi Corp. and the U.S. arm of German parts giant Robert Bosch GmbH.
“We still get students who only want to work at GM or Ford, but there’s no question that the biggest growth of jobs is in the supplier base,” said Nichols.
The surge in white-collar supplier jobs is partly due to the Big Three shifting significant research, design and testing responsibilities to their parts manufacturers.
“I think that’s a fair statement,” said John Quattrone, head of human resources for GM’s North American operations. “We still do a lot of designing in house, but we have asked our suppliers to build whole modules rather than individual components.”
Despite the cutbacks among white-collar workers, the Big Three still have an enormous presence in the region’s professional ranks.
About 70 percent of GM’s North American white-collar employees work in Michigan, and both Chrysler and Ford have similar concentrations of talent here.
Laymon said Ford’s employment rolls may swell or shrink depending on the corporation’s performance, but that has little to do with its long-term commitment to providing jobs in Michigan.
“We still have a significant manufacturing imprint in southeastern Michigan,” he said. “Those plants are managed by somebody, the engineering support is provided by somebody, and the distribution is managed by somebody.”
Layoffs, buyouts take toll
Still, the wave of layoffs and buyouts of the past few years has whittled away at the sense of job security that Big Three salaried workers once had.
At Ford, the automaker scuttled its controversial rating system for white-collar workers after a string of high-profile lawsuits by older employees alleging age discrimination.
“White-collar employees have become a commodity just like assembly-line workers,” said Michael Pitt, a Royal Oak attorney who has represented dozens of Big Three employees. “You’re only as valuable as the project you’re currently working on.”
Flexible skills and an ability to adapt to changing conditions are crucial to keeping a white-collar job, said one GM engineer.
“You can’t just be an engineer, you have to be the kind of engineer they need,” said Kumasi Rayford, 32, a design engineer at the GM Technical Center in Warren. “You have to look at where the industry is headed and plot your course that way.”
Downsizing has not diminished the appeal of a professional position at one of the Big Three.
GM receives between 5,000 and 10,000 unsolicited resumes a week on its Web site for white-collar job opportunities. On college campuses, a job at the Big Three “still sells” graduates who may be considering other industries, Laymon said.
“You give me an opportunity to compete for a white-collar worker against any other industry, and I’ll get him,” he said.
Dramatic cutbacks in the auto industry’s employment rolls tend to happen in rapid fashion. But the recovery of jobs traditionally occurs at a much slower pace.
In 1990-91, automotive employment in Michigan dropped nearly 17 percent in a span of eight months, according to the Michigan Department of Labor & Economic Growth.
It took another three years before the industry’s employment returned to its 1990 level.
Some industry experts doubt whether the Big Three will ever replace the tens of thousands of jobs eliminated since mid-2000.
“The industry has enormous faith that their productivity trends will continue through the end of the decade,” said McAlinden. “If it does, why would they (hire) more people?”
Nissan, Toyota gain
Instead, opportunities lie at competitors such as Nissan Motor Co. and Toyota Motor Co., which are gaining market share and adding employees.
“In 1999 we had about 450 employees and our target is to have over 900 by the end of this year,” said Edward Hayden, human relations manager at Nissan’s technical center in Farmington Hills. “We will hire over 100 people this year, primarily engineers.”
The numbers are incremental compared to the enormous staffs at the Big Three. Chrysler alone employs 45,000 people — including hourly workers —in Michigan.
But the difference is Nissan is adding market share in the United States and growing — no matter how comparatively small that growth may be.
“I’ve been here 15 years, and back then people would ask me, why are you working there?” said Robert Sump, the technical center’s vice president of component engineering. “Now we’re attracting attention.”
It’s attention once directed primarily at GM, Ford and Chrysler, the three constant pillars of the Michigan economy.
The dramatic cutbacks of the past few years have yielded the desired results. Cutting costs has revived earnings at GM, Ford and Chrysler, and productivity levels continue to rise.
And although Big Three executives voice optimism about hiring more white-collar professionals down the road, there are no promises being made.
“We’re not in a growth mode from a talent acquisition standpoint,” said Chrysler’s Rae. “I think it will swing back somewhat. We know we can be competitive in Michigan, but we have to generate more productivity.”
You can reach Bill Vlasic at (313) 222-2152 or bvlasic@detnews.com.
Brenda Lemke, Kettering University fuel cell instructor, engineering department business manager Rick Baily and Ryan VanTiem are in the vanguard of new technology. Lemke drives the fuel cell golf cart made by an undergraduate class.
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