CHICAGO — While General Motors Corp.'s decision to slash 30,000 jobs and shutter facilities was deeper than expected, the next shoe to drop could be even more devastating to the auto-dependent Midwest economy.

Executives at Delphi Corp., GM's auto parts supplier, have threatened to shut down all its U.S. facilities in a concessions showdown with the United Auto Workers and other unions. Two of three of Delphi Corp.'s 34,000 production jobs are in the Rust Belt.

A similar jobs debacle could be on the horizon at Ford Motor Co. for thousands of workers taken back into the company from its main parts supplier, Visteon Corp. Cutbacks at Visteon and Delphi would in turn hammer hundreds of smaller Midwest companies that would have to reduce costs.

"Now we are going to see pattern bargaining in reverse," said University of Michigan economist Donald Grimes. He expects Delphi's drive to lower wages and benefits to play out quickly; smaller suppliers will be forced to seek similar concessions from employees or face becoming extinct.

Similarly, Grimes said he would be "shocked" if GM and Ford did not push for major concessions in their contract talks with the UAW in 2007.

DELPHI INSTABILITY

To Harley Shaiken, a labor expert at the University of California Berkeley, GM's moves threaten to further undermine an already fragile and weakening Rust Belt economy.

"We are seeing terrific pressure on wages that built a solid middle class in the Midwest and the communities that grew up because of it," Shaiken said.

The UAW, which has led the way for other unions in the confrontation with Delphi, has steadily rejected the company's demands, leading the way to possible strikes or a wide-scale shutdown of factories by the company in January.

That is when a federal bankruptcy judge is expected to consider Delphi's success in overcoming the problems that plunged it into bankruptcy last month. If Delphi does not have an agreement in hand from the unions, it might ask the judge to set aside existing contracts.

Shaiken and others say what's taking place now is only a speed-up of a scenario that began a few decades ago. Since then the domestic automakers have faced a relentless capture of their market by foreign manufacturers.

The question for GM and others, says Dana Johnson, chief economist at Comerica Bank in Detroit, is whether the domestic automakers have cut back enough.

"What GM and the others are doing is downsizing their companies to a more realistic share of the market they now have," he said. "But so far, it is not clear that they have stopped the erosion in the market."

MIDWEST EXODUS

What especially hurts the Midwest, says Thomas Klier, an economist with the Federal Reserve Bank in Chicago, is a redistribution of the auto industry's resources away from Michigan, Indiana and Ohio — states that once formed its core.

As the auto industry moves from the Midwest to South and mid-South, it has been taking along with it a large number of auto parts industry jobs that are often overlooked in the count of lost jobs, but matter in dozens of large and small communities across the region.

For every auto production job there are usually at least three in the auto parts industry, he said.

While the future may today seem "dire" for the region, Sam Kahan, an economist at the Federal Reserve Bank's office in Detroit, suggested that the Midwest's current economic woes could also lead to a reversal of its fate.

If wages come down and businesses become more competitive in the Midwest, that might attract investors eager to take advantage of the region's skills and resources, Kahan said.

But for the time being, workers still wedded to auto manufacturing may have to pay a price, he said. And that would be lower wages, and fewer opportunities, he said.