As the World Churns

All those churned real estate agents won't be selling cars instead of houses. Workers in the auto industry are getting churned too:

GM Chief Wagoner to Announce Plant Closings Today, People Say, Bloomberg: General Motors Corp. Chief Executive Rick Wagoner... today will announce ... efforts to reduce costs... The world's largest automaker will idle or reduce operations at about nine manufacturing sites and close other non-manufacturing facilities such as parts depots... GM will likely eliminate at least 32,000 jobs ... by 2007, said Rod Lache, an analyst at Deutsche Bank Securities Inc. in New York. That's a bigger and faster cut than the 25,000 jobs Wagoner promised to cut five months ago... Coupled with the idling of GM factories [elsewhere] this year, it would ... lower ... North American assembly capacity to 4.4 million vehicles by 2007, compared with 5.8 million at the beginning of 2005. ... ''Over the long term, if GM keeps losing market share, everything is up in the air,'' Hargrove said. The CAW agreed to more than 1,000 GM jobs cuts last month. ''The October numbers were just horrible.''...

Comments

[Idaho_Spud]

It looks like this might be the beginning of a *really* ugly recession.

Will the jobs these people get in other sectors be as good as their jobs in auto manufacturing? I'd answer with a resounding 'no' (assuming it wasn't a rhetorical question, of course!)

The fact that GM and Ford are slowly going bankrupt as they try to meet their pension obligations pretty much answers that question. No manufacturing industry in their right mind (and certainly none with cut-throat global competition) would offer such a generous combination of wages and retirement packages these days as the ones that auto workers receive.

Offhand, I'd say right now one of the safest blue-collar positions is in utilities (gas/electric/water/sewer). It's very difficult to offshore or outsource these essential services. And because these services are non-discretionary (unlike auto purhcases), they're far less cyclical. The length and depth of downsizing are way smaller than consumer-based businesses.

But of course it ain't much of a growth industry (most of the time anyway), and it can't absorb a lot of displaced workers.

[save_the_rustbelt]

GM and the UAW have been working hard to commit mutual suicide for years.

Which makes this no less tragic.

Economists keep promising us high value jobs if we just accept speeding up "creative destruction" with trade agreements.

Yeah, right.

[calmo]

How many lined up last week to sell short this week with this insider knowledge? [I know, the market will not lose a couple of hundred points this week. No, GM will actually gain 3% on this news which will be taken positively: a sign that the bleeding has stopped; that Wagoner has taken a stand against the union and that the automobile industry will rise again.] (But next week, the market will lose 500pts because the smart players decided to clean the house of these pesky little novices who think they have shorting figured out.)
Ok, Idaho says the sewer is the next hot spot for job creation and I'm not proud. I can herd turds with the best of them. Someone has to. And if it means cm will not be flushed out of his R&D work, I believe getting my hands dirty will have been worth the cost, you?

[Movie Guy]

save the rustbelt:

"Economists keep promising us high value jobs if we just accept speeding up "creative destruction" with trade agreements.

Yeah, right."

You mean it's not true? Oh, the horror.

[save_the_rustbelt]

Movie Guy:

Repeat after me...

"Do you need a cart today"

"Paint brushes are in aisle 17."

"Care to biggie size that order?"