When the the Detroit automakers' financial crisis started getting more media coverage a couple of months ago, a study was released by the Center for Automotive Research estimating that the possible collapse of the industry could ultimately cost up to 3 million US jobs. That estimate is based on the several hundred thousand direct jobs, plus the affected suppliers as well as businesses in the vicinity of automotive facilities. The repercussions of the recent sales collapse are already being felt in southeast Michigan and elsewhere. Even traditionally strong companies without unions are paying the price for the current economic environment.

Take the case of TRW Automotive. TRW and some of its progenitor com,anies Kelsey-Hayes and Lucas, have long been among the strongest auto suppliers from a financial perspective. Unlike Delphi and Visteon, TRW has been consistently profitable over the years (Full disclosure: I worked at Kelsey-Hayes and later at TRW, after K-H was bought, from 1991-2007). Over the course of that time, there were only a couple of rounds of layoffs and there were never more than a few dozen people let go. Read to find out what has happened in 2008.


TRW spokesman John Wilkerson was contacted for this story. The only comment that Wilkerson was able to supply was the following, "TRW has continued to restructure its business on a global basis, including the Livonia complex. Reductions have varied by business unit according to current customer demand and what we anticipate for the markets in early 2009."

However, I've recently been in contact some former colleagues at TRW's headquarters complex in Livonia, MI. Since the start of 2008 there have apparently been five rounds of layoffs at the technical center. In the most recent round in mid-November, one former co-worker with 32 years of experience as a skilled technician was laid off as were numerous other engineers and technicians many with 25-30 years or more of experience.

Much of my former department has been let go, as the work they were doing has been consolidated at another facility. The most recent publicly available information about TRW indicated that the company had over 66,000 employees worldwide with 4,000 in the Detroit area, including 1,200 at the Livonia technical center. It's estimated that as many as one-third of the people in Livonia lost their jobs in the most recent round of layoffs. These are mostly college graduates with bachelors and masters degrees, and many of these same people are having a tough time finding jobs because every other company in the field is also letting people go.

These engineers are technicians are being fired because the vehicle programs they were involved in have been delayed or canceled outright. Lack of a paycheck means these people will be spending less money in the community in coming months, leading to cascading business failures and job losses. This is the real cost of the financial mess on Main St.

TRW posted strong profits even in the first two quarters of 2008. The situation has gotten dramatically worse in the second half of the year, as it has for virtually every company in this industry. Things are so bad that last week TRW even withdrew its fourth quarter and year-end financial guidance for analysts. Where and when things will ultimately bottom out is anyone's guess.