GM workers will have job options — but they may not be as good
Posted November 30, 2018 6:35 a.m. EST
(CNN) — Losing a job is never good news. But for the 14,000 General Motors workers in line for layoffs in the coming months, the timing couldn't be better.
The US economy is currently experiencing its lowest unemployment rate in almost 50 years. The manufacturing industry in particular has been saying it's desperate to find workers, with 484,000 job openings in September, just off an all-time high the month before.
"Access to talent is our greatest challenge," says Sandy Baruah, president and CEO of the Detroit Regional Chamber of Commerce.
GM announced this week that it would close five plants and cut 15% of its salaried workforce as it shifts production away from sedans and into other vehicle types. Two of the plants slated for closure are in the Detroit area, and one is across the border in Ontario, Canada.
"Those people in auto jobs will be able to find work in the auto-related industry in this region, I think, without much problem," Baruah said.
The 8,000 white-collar workers who are expected to lose their positions will also have plenty of options outside the auto industry, especially if they're willing to move. Technical engineers or managers of any type won't require much retraining in order to fill in-demand positions.
"White-collar skills are pretty general skills that are needed in most labor markets," says Andrew Weaver, an assistant professor of labor and employment relations at the University of Illinois. "If you're a clerk or an accountant for GM, you could go be a clerk or accountant for a life insurance company."
However, that doesn't mean finding the next job will be easy — especially one as good as the unionized shop-floor positions at GM.
With hourly wage rates of between $28 and $41 depending on experience, plus yearly profit-sharing checks, excellent health care plans, pensions and other perks like discounts on vehicles and tuition assistance, positions like those offered by GM and the other Detroit automakers are now rare in America for workers, especially those without college degrees.
General Motors has said that hourly workers will have the option of transferring to other plants. The company declined to share exactly how many openings there are currently, but said "lots" of positions are available in Flint, Michigan and Arlington, Texas — moves that come with bonuses to help with relocation costs, as well as the right for workers to return to their home plants if jobs come back.
Nanette Donithan, 54, says she has to try to keep her GM job.
Over her 20 years at the Lordstown, Ohio, plant, Donithan was able to raise two kids as a single mother and buy a house. Now, she's about to be a grandmother, and has her own 84-year-old mother to take care of. But she's still put in for a transfer at nearly every other GM plant, even though leaving her family would be devastating.
"I'll do what I have to do to finish my career, because I can't just move on," Donithan says. "I could go out and do what the rest of society does and work two or three jobs. Even if you do get through trade school, you'll only make $12 or $13 an hour."
The United Auto Workers union is still negotiating with the company about the possibility of bringing new products to plants at Hamtramck, outside Detroit, and Lordstown, which may save them from closure. The effort echoes comments President Donald Trump made last year at a rally in Youngstown, where he told the crowd he'd bring jobs to the area.
"Don't move, don't sell your house," he said at the time. "We're going to get those jobs coming back."
Some workers may not have a choice. Many permanent employees across the auto industry have been replaced by temporary workers employed by staffing firms, which aren't unionized and offer fewer benefits. While manufacturing wages are accelerating, the labor crunch isn't driving employers to offer the kinds of relocation incentives to line workers that might be available to sought-after workers like software engineers or data scientists.
Hourly GM workers will get supplemental unemployment insurance through the union, giving them time to figure out their next move, said Kristin Dziczek, vice president at the Center for Automotive Research.
"Nobody pays what GM pays in most of these local labor markets," Dziczek said. "That prospect that there may be future employment, while they're on layoff, may keep some of these workers hopeful that they come back to GM."
Although the manufacturing sector discharges about 100,000 people per month across the country, dumping several thousand people at once in a single town inherently makes it harder for everyone to find new jobs without moving.
The 1,400 people being let go from the plant at Lordstown, in particular, may have a harder time because two previous shifts have been cut over the past two years. And the layoffs won't stop with GM itself. A wave of cuts will follow at the assembly plant's suppliers, whose workers don't usually don't have the protections of a union contract.
The Youngstown metropolitan area has lost more than 27,000 manufacturing jobs since 2000, flooding the market with job-seekers. Workers with more seniority typically stay on the longest, so those who are being let go now are likely to be in the later stages of their careers.
That creates a double whammy of discrimination, says Susan Houseman, vice president at the Upjohn Institute for Employment Research.
"There's certainly widespread discrimination against older workers, and workers who've been a part of a union," Houseman says. "The concern is that they expect to earn more, and they'll be less productive because they'll resent earning less."
Yet to Burt Cene, director of the Workforce Development Board that services the Mahoning Valley, says it feels different from the disappearance of the steel industry from the region in the 70s and 80s. He was a union leader then, and remembers that many people held out hope for the steel plants to fire back up again — but they never did.
"When that went away, it took almost everything with it," Cene says. He thinks laid-off auto workers have a better shot of maintaining their middle class lives than the steelworkers of 30 years ago. The region has more jobs in health care and education now, if assembly line workers are willing to go back to school.
"The economy's a lot better than it was during the 70s," Cene says. "Even for retraining, I think there's a lot of good opportunities."