Auto-Job Cuts Spread Pain to Suburban Detroit Detroit's suburbs have long been islands of affluence for many auto-company employees. Now, recent job cuts at GM and looming ones at Ford are taking a toll in some of the more exclusive neighborhoods.
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Auto-Job Cuts Spread Pain to Suburban Detroit

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Auto-Job Cuts Spread Pain to Suburban Detroit

Auto-Job Cuts Spread Pain to Suburban Detroit

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You may want to avoid driving your vehicle until you know it's safe. Ford is recalling more than 145,000 vehicles for various problems, including side door latches and drive trains.

This is another hit for a company that's had a lot of problems which are spreading beyond Detroit. Job cuts at General Motors and looming ones at Ford at taking a toll on some of the more exclusive neighborhoods in the area.

NPR's Frank Langfitt reports.

FRANK LANGFITT: Art Jacobson has a lovely home in a gated community. But he can't sell it. The problem? It's in Dearborn, the Detroit suburb and headquarters of Ford. There's so many houses on the market here, it would take at least a year to sell them all. An when Ford cuts 10,000 white collar jobs in the coming months, more for sale signs are sure to go up.

Jacobson left Ford a few years ago in an earlier round of cutbacks. Recently, he gave me a tour of his house. It sits on a golf course, which hosts Ford's Senior Players Championship.

Mr. ART JACOBSON: And this opens up onto the seventh fairway. It's a par five. And you can come by here and you can see, like, Jack Nicholas and Arnold Palmer, and - I did follow Lee Trevino around one time. He's a lot of fun to follow around.

LANGFITT: The house, which has been on the market for six months, has other selling points. The foyer has marble floors and an 18-foot ceiling. But Jacobson says people are so anxious about the economy, it's hard to get anyone interested in a luxury home.

Mr. JACOBSON: We started out at 549. We dropped it down to 524, and we just lowered it about a week and a half ago. Right now we're at 497,500. Hopefully we're going to attract some buyers.

LANGFITT: The economic problems of suburban Detroit go well beyond housing. Some country clubs have lost members. Restaurants report fewer customers. Some have even shut down.

Last month, Rick Halberg closed Emily's, a French restaurant where a dish of wild Alaskan halibut went for $38. Sitting in the empty dining room, Halberg traces the slide in revenue that began last year.

Mr. RICK HALBERG (Owner, Emily's Restaurant): It started dipping and then really, this year was frightening.

LANGFITT: Customers from nearby auto parts companies came in less often. So did people who used the restaurant to celebrate birthdays and anniversaries.

Mr. HALBERG: Saturday nights weren't as busy. Friday nights weren't as busy. The businessmen on expense accounts, those guys weren't coming in as much, weren't ordering $150 or $200 bottles of wine as frequently -you know, preordering special dinners, things like that.

LANGFITT: White tablecloth restaurants aren't the only ones suffering. Pete Buscami(ph) runs a pizza and sub shop across town in Grosse Pointe, a wealthy suburb where lakeside mansions run in the millions.

(Soundbite of machinery)

LANGFITT: Buscami says some people are cutting out yard work to save money, and that means fewer jobs for the lawn crews who usually buy his subs.

Mr. PETE BUSCAMI (Restaurant Owner): You know, the guys who do landscaping and painting and stuff like that, that obviously the job load has become much, much lighter. Their crews are smaller. I'm not getting as many crews. I was averaging probably 12, 15 crews in the middle of the summer of landscapers alone. This year, I was lucky if I got four or five.

LANGFITT: Jeff Solinsky(ph) comes in for a sub. He's a self-employed builder. Solinsky says the real estate slump has left him with a lot less work.

Mr. JEFF SOLINSKY (Self-Employed Builder): I think what I'm finding is that my phone simply is not ringing at all.

LANGFITT: Like the auto companies, Solinsky has handled the drop in his own business by cutting back.

Mr. SOLINSKY: I've downsized everything. I went from a five-bedroom house to now a one-bedroom apartment - from a fleet of trucks and ten employees to no employees and an old 1995 Ford pickup truck.

LANGFITT: One thing Solinsky can't downsize is college tuition for his daughter, Sara. So he's thinking about moving - maybe someplace in the South or the West where people are building more houses.

But even a bad economy creates new business.

Unidentified Woman: (Answering telephone) Good afternoon, Bearing Group.

LANGFITT: That's a real estate company in Grosse Pointe which focuses exclusively on foreclosures. The firm sells the houses for banks and takes a small commission.

Business is booming. Owner Ken Koppite(ph) says that as the economy has declined, his stock of foreclosed properties has quadrupled and he needs more staff.

Mr. KEN KOPPITE (Owner, Bearing Group): Well, we've outgrown this office. I'd say we have more people than I have desks. I need to hire a number of new people. I've got more homes than I have people to help me sell them, so I need other assistants to help market the properties for me. And with that, the back office stuff grows, too. Now we have more bookwork, more invoices, more billing going on.

LANGFITT: But the hiring at Koppite's business is the exception. Michigan keeps losing jobs, even as most states add them. Researchers at the University of Michigan expect another 23,000 jobs to disappear next year.

And they say the problems in the auto industry will keep the economy down until the fall of 2008.

Frank Langfitt, NPR News.

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