Detroit is not a happy place right now.

The Detroit News: General Motors Corp.'s move to force out white-collar employees for the first time in about 20 years and cut benefits underscores the deepening problems facing the automaker. The escalating challenges are driving a possible acquisition of rival Chrysler LLC, analysts said.

GM's cost-cutting moves coincided with fresh signs of the devastating impact of the global financial crisis and the worst auto sales market in 15 years on Detroit's Big Three automakers.

GM's cost-cutting moves coincided with fresh signs of the devastating impact of the global financial crisis and the worst auto sales market in 15 years on Detroit's Big Three automakers.

On Thursday, Chrysler said it plans to cut 1,825 more factory jobs and accelerate the closure of a sport utility vehicle plant in Delaware. News of the cuts came as Daimler AG said it had reduced the book value of its almost 20 percent holding in the Auburn Hills company to zero -- a stark sign of the U.S. automaker's deteriorating fortunes.

... Sean McAlinden, chief economist and vice president for research at the Center for Automotive Research in Ann Arbor, could not recall the last time GM fired salaried workers -- maybe in the early 1980s.

"Normally, our companies haven't done that to permanent staff until very recently -- Ford in July, Chrysler last month and now GM. That's a sea change for Detroit."

GM employs 28,000 white-collar workers, down from 47,000 seven years ago.

Firings at GM are rare, Shaiken said. Previously the automaker has sought to cut its work force through buyouts.

"There's nothing as demoralizing to everyone as a forced departure," he said. "The fact that they've taken this route indicates the toughness of the moment, and the urgency they feel in addressing it."

See Also: Nine Ways To See A Layoff Coming