tory from the Wall Street JournalTony Barr is waiting for his big break -- or any break at all.
Last fall, just as Chrysler Corp. was sliding toward bankruptcy, he and two other colleagues in product development left the company to start their own consulting business, marketing their efficiency expertise to other firms in Michigan.
So far, they have lured just one paying customer. "Even if you tell people you'll work for free," says Mr. Barr, many companies "don't even want to talk to you."
Mr. Barr, 46 years old, was the type of well-educated, white-collar "knowledge" worker that Michigan hoped would help offset a decline in auto-assembly jobs. But Detroit's Big Three car makers have aggressively thinned these ranks in the past two years, perhaps permanently, casting tens of thousands of midcareer, white-collar workers into an extended limbo.
Many displaced veteran workers who once earned high salaries in engineering, information technology, research and design jobs aren't now destitute, thanks to generous severance packages. But they find themselves stuck, unable to find comparable work in Michigan, but also unable or unwilling to uproot their families and try their luck out of state.
For them, the choices come down to taking whatever job they can get, or waiting for something to come along.
From the end of 2006 through June, the Big Three eliminated nearly 30,000 North American white-collar jobs, virtually all in Michigan. Chrysler's white-collar work force is less than half what it was at the end of 2006.
As a result, Michigan's unemployment rate galloped to 15.2% in August from 9.6% in November, when the exodus from Chrysler began, and has led all states for at least 26 of the past 28 months. Metro Detroit's 17.7% jobless rate is the highest of any large urban area in the country.
Michigan also leads the nation in labor underutilization -- a broader measurement of job-market limbo that includes the unemployed, people who quit looking for work, those who have been cut to part-time status and those who are working part-time while they seek full-time employment. Over the four quarters ended June 30, around one in five Michigan workers fell into this category, according to the U.S. Department of Labor.
Labor-market economists say skilled workers in Michigan with years of experience, particularly from the auto sector, must compete against a flood of younger, better-educated candidates for a shrinking pool of jobs. Their specialized expertise, highly valued in their former posts, is a tough sell anywhere else.
"To find a new job they'll probably end up making less, probably substantially less," says Don Grimes, a senior researcher at the University of Michigan's Institute for Research on Labor, Employment and the Economy. "It's going to be painful."
Compounding the problem, Metro Detroit's housing market remains in profound decline, even as other areas stabilize. As of July, home prices in the region are down 45% from their peak in early 2006, as measured by the Case-Schiller home-price index, and are down to 1995 levels, destroying millions of dollars in household wealth and stranding thousands of middle-class families in homes they can't afford to sell.
"We haven't seen the huge out migration, not yet," says Jim Rhein, an economic analyst for the Michigan Department of Energy, Labor and Economic Growth. Part of the reason: "It's not looking rosy anywhere else," he says.
Michigan has scrambled to shift its economy toward other industries that can attract high-wage jobs, such as defense, alternative energy, health care and even movies. Those jobs are only trickling in.
Tom Boileau, 55, has seen how difficult the transition has been. After 35 years in product development at Chrysler, Mr. Boileau was earning roughly $110,000 a year when he took an early-retirement deal last fall that pays him a pension of nearly $4,000 a month. He was later hired by Michigan Works, a state agency that helps displaced workers retrain and find jobs.
Each day, Mr. Boileau says, 90 to 100 unemployed people sat at his desk at a state office in Detroit, where he handled primarily suburban white-collar engineers' cases. "They kept coming back and coming back and coming back, and working on their résumés," says Mr. Boileau. "I didn't see anyone get anything."
Mr. Boileau himself hasn't fared much better. Since his contract with the state expired in April, he has been without a full-time job. He fills his time working as a part-time hockey coach, which pays $500 a week during the season. While he'd like to work full-time, he acknowledges that at age 55 and without a bachelor's degree, he'd be lucky to get a third of what he used to make at Chrysler.
Dave Duncanson considers himself one of the lucky ones. Less than a year ago, he was earning $109,000 a year as a Chrysler product-development manager, overseeing large teams of engineers during pivotal powertrain launches. He left in November with a $50,000 cash buyout.
This summer, he started a full-time job as head custodian at Stoney Creek High School in Rochester Hills, Mich., the upscale suburb where his family lives. For hours each weeknight, he can be found pulling trash from bins, vacuuming carpets and putting desks back in place. The job pays $15.05 an hour, or about $31,000 a year after a recent 25% pay cut, and offers a pension and health benefits.
Mr. Duncanson, 49, says he was baffled at first that he couldn't find work to match his qualifications. But he's come to appreciate the stability of full-time work. "A little upgrade from where I'm at, and I'd be happy with that," he says, "just to avoid the auto industry."
Mr. Duncanson, who spent 26 years in the auto industry, proudly notes how he has been able to transfer his experience in streamlining processes to his new job. Still, he says, "How would you like to be the guy who runs into his old co-workers and says, 'Hey, I clean toilets?'"
Mr. Duncanson can think of just one person in his old department at Chrysler, a younger engineer named Melissa Nemeth, who successfully landed a comparable job. She and her husband, Phil, a General Motors engineer, sold their home in suburban Sterling Heights, Mich., for a $40,000 loss, but managed to cover the mortgage balance. They moved to Oregon. "It couldn't have gone any better, but it was a scary ride," says Ms. Nemeth.
As more-junior workers earning lower salaries, the Nemeths, both 30, were able to pack up and find new jobs out of state, adapting their skills to new industries. But many veteran workers won't or can't. Some remain convinced that given their specialized skills, their best prospects for comparable work are in Michigan. Many can't absorb a pay cut or the loss on their house. Others, like Messrs. Duncanson and Barr, have strong family ties to Michigan.
At home, Mr. Barr is struggling with his new role. When he left Chrysler with a $75,000 cash buyout, his wife, who also worked there as an engineer, bumped up to full-time. Mr. Barr is now the parent who drops his three kids at the movies or picks them up from practice. Here in his hometown, one of Detroit's most affluent suburbs, he has noticed more dads walking their dogs in the middle of weekdays, just like him.
His efficiency business is predictably lean. He and his partners run it out of his home office, occasionally venturing out to local restaurants to pitch prospective clients. "We've taken people out to lunch and it's like, 'I'll get a salad,'" says Mr. Barr.
After one such lunch in June, Mr. Barr recalls, the prospect, from a large local accounting firm, left the bill on the table and said, "When you guys get an office, why don't you call us?"
While he waits for business to catch on, Mr. Barr has found an outlet for his technical skills. For five hours a week he teaches a neighbor how to use her computer. It pays $30 an hour.
Says Mr. Barr: "I didn't want to grow up to do this, you know?"
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