Detroit's Ills Symptomatic Of a Manufacturing Plague

Ford Motor's stock price fell 21 percent over concerns that the nation's economic crisis will devastate auto sales. (By Bill Pugliano -- Getty Images)

"There isn't really any way we can make that up, so we have to cut," Mayor Paul Schreiber (D) said, explaining that the city of 22,000 closed its park and recreation department and now relies on volunteers.

Eleanor Walker runs a nonprofit organization in Ypsilanti called Hope America, which teaches financial literacy and works to prevent foreclosures. In her office are 50 open files belonging to Washtenaw County residents now in default. She estimates that 75 percent had auto industry connections.

"They were making $60,000 or $100,000. Now these people are making, like, $30,000 or less without health benefits and they can't make it," Weaver said. "The situation has just paralyzed them."

Charla Messner's case illustrates the double-whammy of the summer's gas price spike and the current credit squeeze. She is 11 weeks into an "indefinite layoff" at a Ford truck plant that made powerful V-8 engines, precisely the kind of gas-thirsty equipment that many drivers have stopped buying.

When the troubles hit and production dropped, Messner downsized, giving up her Ford F-150 pickup truck for a Ford Focus and trading down to a smaller home. "Just reducing my standard of living," she said.

Michael C. DiGiovanni, GM's director of global industry analysis, said the automaker is flying as blind as anyone else amid a credit crisis far more severe than anticipated. GM posted a $15.5 billion second-quarter loss. Ford lost $7.8 billion.

"We're in uncharted waters," DiGiovanni said. "Right now there's so much uncertainty, plans are being revised constantly."

Pleading hard knocks at a time when they are burning cash to design and build cars they hope Americans will buy, the Big Three automakers persuaded Congress to approve a $25 billion loan to retool aging factories. A new labor contract, largely dictated by the economic downturn, will reduce the manufacturers' costs when it takes effect next year.

U.S. auto executives, burned before by economic troubles and undone by their own shortsightedness, are banking on the next generation of fuel-efficient cars. A billboard on Interstate 94 east of the Detroit airport advertises the Chevy Volt, a hybrid designed around a lithium-ion battery.

"Fully charged 2010," the billboard says.

Michigan can only hope so.

"I think there's a light at the end of the tunnel," Annette Sykora, chairman of the National Automobile Dealers Association, told a gathering this week at the Detroit Athletic Club. "I just don't know how long the tunnel is."

Staff writer Kari Lydersen in Chicago contributed to this report.