For more than a decade, Trish McAuliffe and her husband, Jim, have lived with a financial sword hanging over their heads.
Trish and Jim went to work for General Motors in Windsor, Ont., right around the same time in the early 1980s. It was 1996 when they got their first termination letters—notices that they would be put on “indefinite layoff” within a few months. They had a toddler and a baby at home, and had just bought a house. Jim, who was 31 at the time, came down with shingles, which his doctor attributed to extreme stress.
Their jobs were saved when thousands of older workers accepted voluntary buyouts, cutting down the number of layoffs. But soon, another termination notice arrived, then another, and another. Finally, in 2004, after years of flirting with financial ruin, the McAuliffes decided to move to Oshawa, Ont. GM was cutting back operations in southwestern Ontario, but had just invested $2.2 billion in its Oshawa facilities. They pulled up stakes, said goodbye to family and friends and moved four hours east in search of stability. They were in their new home for a year before the axe fell again, then again and again—three termination notices in about 36 months. Each time they received what amounts to a stay of execution. “We’ve had these death notices over us for three years now,” she says. “We’re terminally ill, but we haven’t died yet.”
But with the global economy now slinking inexorably toward recession and worldwide financial markets lapsing in and out of panic, Trish, now 47, admits she’s wondering if and when that next letter might arrive, and what it will mean when it does. She alternates between worry and resignation. Her kids are 13 and 14, and will be off to university soon. She knows that they’ll have to rack up significant debt to get a degree. She knows that if she and Jim lose their jobs, “the house will be the first thing to go . . . we’ll have to downsize.”
“It’s like a feeling of gut rot that sits in your stomach,” she says. “When you get the letter, it feels like people are pitying you. I hate that feeling. My kids hate it.”
It’s little comfort to know that in the past month, millions of Canadians have come to share her sense of dread. Canada’s stock market has plunged and all the latest economic numbers point to recession. This week economists confirmed that they expect Canada’s GDP to contract through the remainder of 2008 and the first few months of 2009. That certainly means more job cuts, less consumer spending and no end of anxiety.
What started as a brush fire among heavily indebted U.S. homeowners who bought wildly overpriced homes they couldn’t afford has grown and spread into an international conflagration that threatens the stability of the world’s biggest lending institutions, and every company that relies on credit to fund its operations. That, combined with the stunning market declines of the past two months, raises frightening scenarios for the millions of Canadians who, over the past 20 years, bought hundreds of billions of dollars in mutual funds, pouring their retirement savings into the stock market in the hope and belief that a generation of steady economic growth would translate into a retirement of beach vacations, summers at the cottage, and a hefty legacy left for the kids. Instead, millions find themselves with decimated retirement funds, declining real estate values and uncertain job prospects—all of it hitting at the very moment that they expected to be cruising toward an easier pace of life.
It used to be that McAuliffe, a third-generation auto worker, worried mainly about the next year’s mortgage payments, and whether she could afford to give her kids all the things they wanted. Now her fears are bigger, and more far-reaching. She worries for her job. “You know, I used to say I wouldn’t even get out of bed for $10 or $12 an hour. I really used to wonder how people survived on that kind of money,” she says. “Now sometimes I think I might just have to.” She’s desperately hoping she can hang on at GM until her pension kicks in five years from now. Even then, she wonders if GM can weather this storm to pay her retirement benefits.
