Can Detroit Be Saved?

The Motor City struggles to rise from the ashes of economic depression and reinvent itself as a center for entrepreneurship and industry

Troubleshooting

It’s easy to spot Detroit’s myriad problems. Roughly one-third of its residents live below the poverty level. It has a crumbling  infrastructure, a bankrupt school system, and a housing climate so abysmal that the median price for a home stood at around $6,500 in June. Charlton sums up Detroit’s status in stark terms: “You’re in the economic equivalent of Stalingrad in the last war. We are on the front line of the recession.”

On the political front, Detroit has suffered severe blows in recent years, with corruption scandals leading to the ouster of Kilpatrick as well as City Councilwoman Monica Conyers pleading guilty to bribery and conspiracy charges for her vote on a sludge fund contract. Trust must be restored in city government—one of the many challenges for Bing, the former basketball superstar and founder of The Bing Group (No. 33 on the be industrial/service companies list with $130 million in revenues). Bing’s plan to address the budget shortfall through furloughs for city employees and proposed service cuts to bus lines  has drawn the ire of city residents and the loss of support from the American Federation of State, County and Municipal Employees (AFSCME), the city’s largest labor union.

AFSCME leaders contend that a disproportionate number of union workers are being affected by the cuts. “We’re saying that everybody needs to share in this equation, that nobody should go unscathed,” says Albert Garrett, president of Michigan Council 25 of AFSCME. All told, the city is attempting to remedy an $80 million cash shortfall this year. Meanwhile, if Bing wishes to keep his job (his term expires this month), he must fend off challenger Tom Barrow, who gained the support of AFSCME.

One might think Detroit’s challenges began with the recent crisis. But residents and other observers say otherwise. The fact is Detroit wasn’t always a one-industry town. At the beginning of the 20th century it was a major producer of ships, stoves, and tobacco. But the wildly successful Ford Model T led to an automobile frenzy that at its peak had some 300 auto manufacturers competing in Motor City. By the 1920s its economy boomed, manufacturing more than 60% of the nation’s cars. After World War II when the population began to shift to suburbia, Henry Ford and other entrepreneurs decided to build factories outside of Detroit. By the 1950s, despite being the country’s fifth largest municipality with about 1.8 million people, there were virtually no new factories built within city limits. “The idea of the modern American city was the suburban lifestyle. It was not living in the inner cities because they were considered dirty and dusty and old,” says Janese Chapman, a city planner and historic preservationist for Detroit’s Historic Designation Advisory Board.

Thus, Detroit went from one of the wealthiest cities in the country to becoming victim of a gradual exodus that lasted decades. Between 1947 and 1963, it lost 134,000 manufacturing jobs; as a result, more than half of the residents left over the next few decades. The greatest shift took place during the 1967 civil disturbance, which escalated “white flight,” further eroding the  city’s tax base and industrial activity.

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  • http://www.mbmtinternationale.com Winston Shines

    Dear Mr. Alan Hughes,

    I just wanted to say that I really enjoyed your article on Can Detroit Be Saved? The thing I liked best was how you featured the pivotal role that many members of the BE 100 have played in the role of Detroit, the role of Tech Town, and the role entrepreneurs like Jimmy King. The funny thing about Detroit is that though Detroit has always had numerous companies listed in the BE 100 year after year, they are invisible in the hometown media like the Detroit Free Press and Detroit News because they are hostile to to black businesses and politicians like Mayor Kilpatrick who though he had his faults brought the city a Superbowl, and a major shipping port that will be opening this coming summer behind GM’s international HQ, the Ren Cen. Great story and keep up the great work!

    Sincerely,

    Mr. Winston Shines
    Principal Consultant
    Maximillian Bryan & Marcell Technologies Internationale LLC
    Detroit, MI

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