From Project Manager To Bathroom Attendant

White-collar jobs go trailing after a sliding economy

Story from the Wall Street Journal

ROCHESTER HILLS, Mich. -- Dave Duncanson still isn't used to being on his feet all day.

The head custodian at Stoney Creek High School starts his day at 4 p.m. by logging onto a computer, reading a series of building reports and assigning cleaning tasks to his subordinates. Then he must march through dimly lit hallways to clean his designated area: the principal's offices, the counselor's wing and the media center. For hours each weeknight, he can be found pulling trash from bins, vacuuming carpets, putting desks and chairs back in place.

The job pays $15.05 an hour and comes with a pension and benefits. In that sense, Mr. Duncanson, 49 years old, feels fortunate. But the story of how he got here offers a window into the deteriorating economy of Michigan, once a bastion of middle-class prosperity, and the plight of tens of thousands of white-collar workers who have been displaced by the near-collapse of the domestic auto industry.

Less than a year ago, Mr. Duncanson was working a few miles away in Auburn Hills, at a desk on the fourth floor of Chrysler's tech center. There, he was a product-development manager making $109,000 a year in salary. At his current job, he'll make less than a third of that.

"At first, I just wanted to do something to bring in money," says Mr. Duncanson, who had spent eight and a half years at Chrysler and took a buyout last November as the company slid toward bankruptcy. "I figured things would bounce back."

They haven't. Michigan's unemployment rate has galloped to 15.2% in August from 9.6% in November, running roughly one and a half times the national rate and leading all states for at least 26 of the last 28 months. In metro Detroit -- home to all three big U.S. auto companies -- the jobless rate is 17.7%, the highest of any large urban area in the country, according to the Department of Labor.

"I sweep floors. I mop bathrooms. I clean up puke."

For Mr. Duncanson and former colleagues who left Chrysler in a swirl of white-collar job cuts last fall, the result has been a year of frustration, financial insecurity, swallowed pride and, inevitably, sacrifices.

Mr. Duncanson got his first auto-industry job in 1984, armed with just a teaching degree from Northern Michigan University. He joined Chrysler in 2000, working his way up through a series of managerial jobs in product development.

Though he wasn't an engineer, he oversaw large teams of Chrysler engineers during pivotal powertrain launches for vehicles such as the Dodge Ram pickup and Jeep Liberty SUV. His specialty was streamlining processes, which put him in a layer of management that Chrysler was eager to eliminate when it ran out of cash and slashed its product-development budget late last year. He left with a buyout package of $50,000 in cash, an amount based on his eight-plus years of service.

He had been out of work for three months when he approached his local school district, Rochester Community Schools, which serves this wealthy suburban community north of Detroit. He figured he could land a teaching job, only to find out that his teaching certificate had long expired. Eager to pass the time, he took the one district job that was available to him: substitute janitor, at $10 an hour.

His wife, a part-time teachers' aide in the same district, was supportive. His two teenage daughters were initially horrified at the thought of their friends seeing him pushing a broom or cleaning a bathroom after school. But the older one, 16-year-old Heather, says few students are comfortable talking about their parents' jobs lately.

"Some of my best friends, their parents could be out of a job and I wouldn't know," she says.

By July, unable to find other work, Mr. Duncanson seized an opportunity to take a custodian's job full-time. He was assigned to Stoney Creek, a crosstown rival of the school his daughters attend. With the promotion came a raise, though it was diminished that same week when the custodians' union accepted a 25% pay cut to avert outsourcing.

Mr. Duncanson proudly notes how has been able to transfer his experience in streamlining processes to his current job as head custodian. Still, he says, "How would you like to be the guy who runs into his old co-workers and says, 'Hey, I clean toilets'?"

As Stoney Creek opened last week for Mr. Duncanson's first school year as a custodian, he considered himself one of the lucky ones. A year after the exodus began at Chrysler, many of his former co-workers are still out of work and have no steady income, health-care coverage or retirement benefits. He has all three. Even the mortgage is taken care of: He used his $50,000 buyout package to pay it off. And he's hoping to gain a builders license to supplement his income.

The evenings at the school are long -- the shift ends at midnight, after his wife and daughters have gone to bed -- and the new job is tough on his feet. The family is watching spending carefully; dinners out and big family vacations are no longer an option.

But there are upsides. The heavy-set Mr. Duncanson has lost 25 pounds since giving up his desk job, and his cholesterol is down enough that he's off medication. The former efficiency expert has already gotten a promotion, in part for streamlining the school's daily cleanings.

More importantly, he says, his daughters have learned the value of a hard day's work, no matter what kind. Living in an affluent suburb where classmates routinely get new cars for their 16th birthdays, he says, that hasn't been easy.

"Well, yeah, it hurt," he says, of accepting a lower-paying job. "But every dollar counts."

Michigan Singing White-Collar Blues

Story from the Wall Street Journal

Tony 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?"