Wednesday, October 21, 2020
Oct. 21, 2020

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GM layoffs a humbling warning few jobs are safe

College-educated workers not insulated from similar fate

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DETROIT — For generations, the career path for smart kids around Detroit was to get an engineering or business degree and get hired by an automaker or parts supplier. If you worked hard and didn’t screw up, you had a job for life with enough money to raise a family, take vacations and buy a weekend cottage in northern Michigan.

Now that once-reliable route to prosperity appears to be vanishing, as evidenced by General Motors’ announcement this week that it plans to shed 8,000 white-collar jobs on top of 6,000 blue-collar ones.

It was a humbling warning that in this era of rapid and disruptive technological change, those with a college education are not necessarily insulated from the kind of layoffs factory workers know all too well.

Tech taking over

The cutbacks reflect a transformation underway in both the auto industry and the broader U.S. economy, with nearly every type of business becoming oriented toward computers, software and automation.

“This is a big mega-trend pervading the whole economy,” said Mark Muro, a senior fellow at the Brookings Institution who has researched changes being caused by the digital age.

Cities that suffered manufacturing job losses decades ago are now grappling with the problem of fewer opportunities for white-collar employees such as managers, lawyers, bankers and accountants. Since 2008, The Associated Press found, roughly a third of major U.S. metro areas have lost a greater percentage of white-collar jobs than blue-collar jobs. It’s a phenomenon seen in such places as Wichita, Kan., with its downsized aircraft industry, and towns in Wisconsin that have lost auto, industrial machinery or furniture-making jobs.

In GM’s case, the jobs that will be shed through buyouts and layoffs are held largely by people who are experts in the internal combustion engine — mechanical engineers and others who spent their careers working on fuel injectors, transmissions, exhaust systems and other components that won’t be needed for the electric cars that eventually will drive themselves. GM, the nation’s largest automaker, says those vehicles are its future.

“We’re talking about high-skilled people who have made a substantial investment in their education,” said Marina Whitman, a retired professor of business and public policy at the University of Michigan and a former GM chief economist. “The transitions can be extremely painful for a subset of people.”

GM is still hiring white-collar employees, but the new jobs are for those who can write software code, design laser sensors or develop batteries and other devices for future vehicles.

Those who are being thrown out of work might have to learn new skills if they hope to find new jobs, underscoring what Whitman said is another truism about the new economy: “You’ve got to regard education as a lifetime process. You probably are going to have multiple jobs in your lifetime. You’ve got to stay flexible.”

Whitman said mechanical engineers are smart people who could transfer their skills to software or batteries, but they’ll need training, and that takes time and money.

“In the past with these kinds of changes, eventually new jobs have been created,” she said. “Will it happen this time, or is the change taking place too fast for everybody to be absorbed? I don’t know.”

Although the job cuts took him and co-workers by surprise, Tracy Lucas, 54, a GM engine quality manager, decided to take the buyout and change careers. His children are grown and on their own, and with 33 years in at GM, he will get a pension and health care.

The buyout will also give him about eight months of pay, enough time to take his newly earned master’s degree in business administration and look for different work. He said he will be glad to leave some tedious management tasks behind but will miss seeing through a lot of work to reduce engine warranty claims.

He is leaving in part, he said, to save a job for younger co-workers. GM got 2,250 white-collar workers to take buyouts, and will have to complete the cutbacks by way of layoffs.

“I really hate that we have to go into the whole process of tapping people on the shoulder,” Lucas said. “I don’t think the second wave is going to be pretty at all. It’s going to be brutal.”

The white-collar cutbacks — combined with more to come at Ford, which is likewise making the transition from personal ownership of gasoline-burning vehicles to ride-sharing and self-driving electric cars — could hamper the renaissance underway in Detroit, which is emerging from bankruptcy and a long population decline.

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