Bill Vlasic and Nick Bunkley of The New York Times report:
"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."
It kills me that they didn't see that coming 25 years ago. If you pull the carpet out from under you, how long before your butt hits the floor?
ReplyDeleteI have a friend who last summer bought into the commonly held belief that oil prices could only continue to go up. Limited supply + growing demand = simple economics. He sunk most his money in oil futures at around $130 per barrel. Of course the oil market turned quickly and now oil is trading in the $30 per barrel range. Was he stupid? Well, yeah, looking at it now it’s easy to say that. He gambled, he lost. But last summer when oil headed to $150 -- not so stupid.
ReplyDeleteI write this not to defend the Detroit Three or the American automotive industry in general. Lord knows they have made some very bad decisions over the past 25 years (not to mention some very bad cars). I write this to simply point out that what seems painfully obvious now isn’t always obvious a short time before.
So in hindsight, sure, GM should have stopped building hugely profitable SUVs, shut down hundreds of loyal dealerships, broken the union, stopped providing all health benefits, created that one car that everybody wants, increased their stock value to four figures. It seems silly now that they never quite got around to that, huh?
The Internet is filled with the self-assured who are just bursting to say, “Well if they only would have asked me.” To which I say: step up. Let us know what futures to buy ...now.