Michigan: Epicenter of Unemployment

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Former Auto Workers Launch Businesses

The auto-company buyout checks may create a mini-boom in new small businesses. Tens of thousands of auto workers have accepted $100,000 or more to retire early. After years on an assembly line and punching a clock, some aren't waiting to see if the car industry bounces back. Instead, they have gone into business for themselves.

Bill Mitchell last year took a six-figure buyout from Ford, and used the money (around $65,000 after taxes) to open what he figures is a recession-proof business: a dollar store. He has two now, which he manages with his father-in-law. And though he makes about $300 a week less than when he was hanging doors on Ford Focus cars 8 to 12 hours a day, he is much happier. "I have a life now with my family, and a lot more energy," says Mitchell. But even a dollar store has to respond to economic forces: "I have had to increase the price of a bunch of items to sell for over a dollar."

Mitchell and other former auto workers also are using their buyout cash to take advantage of a byproduct of Michigan's recession—foreclosed homes. Mitchell has bought three houses for $35,000 to $66,000, which he rents while waiting to give them to his three children. He has already turned over a property to one of his daughters. Other workers who have taken early retirement have scooped up foreclosed homes for as little as $5,000 a house, banking that property values will rebound in the next decade and make the investment pay off. The result is that home sales in Detroit are spiking by double digits.

For others, there is no buyout, just a scramble to get back on their feet. Another job fair was held recently at Ford Field, the domed stadium that is home to the Detroit Lions National Football League team. The stadium is looking for workers to cook and sell the $6 hot dogs and $10 (16-ounce) beers at Lions games this fall, as well as warehouse workers, cashiers, and vendors. All told, about 400 jobs needed filling, or about a third of the 1,200 people who staff every home game or concert.

Many of those in the line are dressed casually, as if headed to a ball game, with hip-hugging pants, a T-shirt, maybe a baseball cap. But standing among them is a man in his late 40s who wears a neat but not expensive blue suit. He has ironed his own shirt this morning, and brought a sack lunch. "I realized a long time ago that sometimes a little thing like wearing the right clothes can make the right impression," says the man, who asks to be identified only as "Jerry."

Perseverance in Hard Times

Jerry has a college degree in English, which he has not put on his résumé for fear of being tagged as overqualified for a job that might pay $12 an hour. Last October, the job he had supervising a customer-service group for a local bank was eliminated. "I'd move away, but this is my home and my parents are elderly and need looking after," Jerry says. He works at a coffee shop during the week and for a landscaper on weekends, mowing lawns and spreading weed killer. If he lands the stadium job, Jerry will gladly quit the lawn job at the end of August.

A short distance away, Reginald Johnson, 24, is neatly dressed and wearing a backpack. He is pursuing an associate's degree in electronics at nearby Wayne State Community College. Polite, articulate, and eager to work, he hopes to land a job in the stadium kitchen, cooking hot dogs and sausages, or maybe the steaks and chops served in the luxury suites. But Johnson has a problem providing more than an e-mail address on his application, and he worries it will keep him unemployed.

"I don't have a place right now. …Last night I stayed at the Greyhound bus station," he says. Though representative of the hardship found in Michigan these days, Johnson is also emblematic of the pluck and lack of resentment often found among those trying to beat the odds and find a job. "They are pretty good about letting you just sit there if you don't make any trouble," he said of the bus station. "But I won't be there long, I think."

Kiley is a senior correspondent in BusinessWeek's Detroit bureau.