(Image: Getty)

• Conrad Murray Believes Jackson Lied About Medical History

Less than a week after Dr. Conrad Murray was found guilty of involuntary manslaughter in the death of pop superstar Michael Jackson, the doctor is claiming he was duped by the late singer. Murray said in an interview broadcast Thursday Jackson lied to him about his medical history and never stated he had an addiction problem.

“I would hate to put blame on Michael as an individual,” Dr. Conrad Murray told the Today show in the interview done days before the doctor’s conviction.

“I only wish maybe in our dealings with each other he would have been more forthcoming and honest,” he said.

The cardiologist said Jackson was deceptive by not disclosing his full medical history. He told interviewer Savannah Guthrie that he “did not have a clue” that Jackson had an addiction problem.

Murray was convicted on Monday for supplying the insomnia-plagued performer with the powerful anesthetic Propofol. He refused to testify at the trial.

Read more at The Grio…

• Wall Street Rebounds After a Tough Day

U.S. stocks rose Thursday after taking a steep plunge the previous day amid news of Europe’s debt crisis.

Merck raised its dividend and Cisco reported strong earnings, reinforcing the view that while problems in Europe were still on investors’ minds, there were signs of strength in corporate America.

Read more at Yahoo! News…

• NAACP Loses a Longtime Hero

The NAACP mourns the loss of longtime civil rights activist and former Detroit NAACP leader Arthur Johnson. He passed away from Parkinson’s disease and was laid to rest on Saturday—his 86^th birthday.

Born in Georgia, Johnson began his fight for civil rights early in his career. The educator was recruited by the NAACP to serve as executive secretary for its Detroit branch, serving in that capacity for nearly 15 years.  Almost two decades later, Johnson returned to a leadership position with that same branch and served as president.

“Arthur Johnson was a true pioneer of the civil rights movement,” said NAACP President and CEO Benjamin Todd Jealous.  ”His contributions to the NAACP and the city of Detroit are immeasurable.  He will be missed.”

Don Barden and Alan Hughes at BE's G&T 2010

I learned of Don Barden’s passing this morning. And while I’d known about his illness for some time, I found myself surprised and saddened by the loss to the Black business community. Though soft-spoken and of average stature, Don seemed like a titan that would endure for many years to come and someone whom I’m proud to have counted among my friends.

I first met Don Barden in 2002 while in Detroit on assignment. I’d heard of the serial entrepreneur who went from being a music promoter to building a multimillion-dollar real estate portfolio and a cable business that ranked among the largest Black-owned businesses before entering the gaming industry. And I really wanted to meet the man. So I called his office a week or so prior to my trip to schedule a lunch meeting.

We met outside of one of his favorite establishments, Sweet Georgia Brown in downtown Detroit. Just prior to entering, Don stopped, bent over, and picked up a dime that was lying on the sidewalk. I couldn’t help but give a little laugh and hoped that I hadn’t offended him. After all, this is the man who sold his cable business for $350 million. He was wealthy, so why stoop to pick up a coin that far less affluent people (including myself) probably wouldn’t bother with? “I’m not too proud,” was what he said when I asked. At that moment, I knew I liked this man.

Over the years, I’ve had the honor of getting to know him better. I’ve dined with him at Fitzgeralds, the Las Vegas casino his company owns; attended his 60^th birthday bash; and (in retrospect I’m ashamed to say) shared a few cigars and drams of scotch with him while talking business, politics, or whatever else came to mind. “Young man” is what the blue-eyed CEO often called me.

Some four years back I conducted a one-on-one interview with Don onstage at our Entrepreneurs Conference. We discussed his life, successes, and failures (he never achieved his goal of operating a casino in his beloved Detroit) before a crowd of a few hundred people. During the Q&A portion of the session, one young fellow put Don on the spot, basically asking him why he didn’t provide money to African Americans looking to start businesses. Don’s response was direct: He made it clear that if the success of the business hinges on playing the black card for financing, it’s not going to succeed. While the public display of tough love ruffled the feathers of the asker, it was valid business advice.

The last time I saw Don in person was during our annual Golf & Tennis Challenge last Labor Day weekend. I’d sat down at an outdoors area of a restaurant overlooking the golf courses at the La Costa Resort & Spa in Carlsbad, California, when I spotted Don and invited him to sit with me. The conversation was pleasant. We discussed business, the recession, the state of his casinos, and, of course, Detroit. I noticed he was a little gaunt and looked tired—though I chalked that up to hard work and possibly a little jet lag. The other difference was that he spoke about his children and the future of his company after he’s gone.

At that time, he knew the seriousness of his cancer, but he was still upbeat. “I’ve got one hell of a fight ahead of me,” I recall him saying. “Take care of yourself and keep up the good work, young man,” was the last thing he said to me before heading off. The funny thing was he left me to pay the bill, but I didn’t mind. The conversation and company was well worth it. But just as I did eight years prior, I had to chuckle.

Inspiration can come from the strangest sources. In middle school, Torya Blanchard got caught shoplifting and received a stern scolding from her mother, who said, “Only good girls go to Paris.” The idle threat worked as the Michigan native had always dreamed of visiting the City of Love. Staying on the straight and narrow, Blanchard’s parents eventually funded their daughter’s first trip to Paris and the experience changed her life. Graduating from Wayne State University, Blanchard went on to teach French at Consortium High School, a Detroit charter school. Then, in 2008, the free spirit had an epiphany; she wanted to bring a bit of Paris to her hometown by opening up a creperie.

“Everyone tried to stop me… Everyone at my job, everyone thought I was nuts. No one thought this was a good idea,” says Blanchard, 32, who made crepes for fun in her spare time. “But you know how you just have these feelings in your gut?”

Blanchard became fixated on opening up her own shop until July 2008 when she quit her teaching job and cashed in her $20,000 401k fund to open Good Girls Go To Paris Crepes. Originally located in a 48 sq. ft. space that once housed a hot dog stand, the business was an immediate hit, garnering word-of-mouth buzz and success within its first year despite being launched during an otherwise crippled Midwest economy. “I knew the first year at best would be a wash,” says Blanchard. “But I tell all of these people starting businesses in Detroit, start small and make an impact.”

That she did. Three years later, Good Girls Go To Paris Crepes is now a full restaurant housed in a 1,000 sq. ft. space with a pleasurable French ambiance. With three staff members under her employ and over 50 different crepe variations on the menu—ranging from meat-filled and flavored cheese to fruity creams—Blanchard is setting the standard for other small businesses in the area to follow. In fact, a second Good Girls Go to Paris location in set to open in the Grosse Pointe Park, a suburban part of Detroit.

“I went into a 48 sq. ft. space with my eyes on this space and other spaces,” says Blanchard. “Detroit is super easy to start and maintain a small business, I know everybody at the Coleman A. Young [Federal] building, everybody knows me. Now in Grosse Pointe, that’s a different animal.”

Detroit's school system is getting a failing grade (Thinkstock)

Detroit is in trouble—again. The city’s public school district continues to grapple with a $327-million budget deficit, resulting in painful cuts for staff and students. If an alternate solution isn’t implemented, the district will be forced to shut down half of its schools by 2014, pushing the average high school class size up to 62 students, run by offsite regional principals.

While decision-makers describe the plan as a draconian solution, time is running out and early stages are already in place as the school system buckles under the deficit. “That’s what the current law requires us to do,” says Steve Wasko, Executive Director of Public Relations for Detroit Public Schools. “We call it Plan A. We have porous boundaries and it would further drive parents away from our school system, but it is the plan to exist.”

In response, Detroit educational leaders are meeting with state officials, scrambling to advocate for at least two alternative plans. “We’ve been generating long term proposals to share with elected officials in Lansing,” Wasko says. One plan under consideration includes a proposal that was submitted for President Obama’s “Race To The Top” initiative, which includes the elimination of teacher seniority. Another plan involves taking existing debt and discarding it, similar to a General Motors style restructuring. Detroit officials have also been looking at models used in New Orleans post-Hurricane Katrina for federal funding to drive academic reforms.

While Detroit residents pay considerably higher property taxes than the surrounding suburbs, the city’s population has decreased significantly in the last decade due to a host of quality of life issues—including the economic downturn, lack of jobs and an increase in crime. The decline in the state’s economy has deepened the problems for the city’s schools, where funding sources have dwindled. In 2000, 180,000 students were enrolled in Detroit Public Schools. That number has since decreased to 74,000. Of the students left, more than 80% are from economically disadvantaged backgrounds, according to the Detroit Free Press. Classrooms are already overcrowded—averaging 35 students from sixth to twelfth grade—so doubling the class size will be a nearly impossible undertaking for teachers to handle effectively.

“What I worry about are people who live in the Detroit district, because of the budget cuts and financial problems, they will have to change schools and go to another district,” says DeWanna Arrington, a local high school senior who will attend Eastern Michigan University in the fall to study nursing. “I’m really worried about students who will give up and drop out. You need a high school education and some type of degree in college in order to get a job. I worry about the teachers that will lose jobs. There are really good teachers here.”

Detroit’s school district has been in a state of turmoil for nearly a decade, when a state takeover was implemented due to mismanagement and constant infighting between the school board and the superintendent. In February 2009, consultant Robert Bobb was appointed as the Emergency Financial Manager. In a November 2009 Black Enterprise article “Can Detroit Be Saved?” Bobb told BE’s Editorial Director Alan Hughes, “the school system must put in place, aggressively and urgently, methods for 21st century teaching and learning.” At the time, he was considering having the city’s school district file for bankruptcy, a proposal that was eventually abandoned.

Bobb’s contract ends this spring, but it’s likely to be extended until the end of the school year. “I don’t know if the state would appoint another financial manager, but it would be hard to imagine it without [one],” Wasko says. Under new state leadership of Republican Governor Rick Snyder, it’s unclear of how the change in governance will affect the city’s plight and what the next steps will be in the process.

Continued on page 2.

A possible future for Detroit's parents, students and teachers (Thinkstock)

Further complicating the advancement of a cohesive plan is an ongoing battle between Bobb and the school board that has played out in court over who controls academic decisions made in the school district. The disagreement is currently focused on who will choose the next school superintendent—the school board or the emergency financial manager.

The matriculation rate for Detroit Public School hovers at 58%, but schools have shown signs of improvement on test scores in recent months. “The academic situation has greatly improved,” Wasko says. In fact, the schools recently instituted a program in which every student from sixth to twelfth grade has access to a laptop.

While some credit Bobb with reining in excess spending, the cuts and decisions have created ire among some community members, parents and teachers. Already, 59 schools have been closed since Bobb was appointed in an effort to harness finances.

Teachers and staff have felt the pinch with forced retirements, layoffs and pay cuts. “We’ve had a brain drain,” says Lisa Mayowa Reynolds, who teaches at the Detroit School of Arts. After only 10 years, she is now among the senior teachers on her high school’s staff. Two of her children have graduated, one is in high school, and her youngest attends a Detroit elementary school.

“I think something has gone really wrong,” Reynolds continues. “I think that public school works. There are districts where they are effectively using their money. Since the state takeover 10 years ago we’ve had access to federal funds. When you try to put a business paradigm on a public institution, it doesn’t work.”

“We have to be innovative with our thinking to offer Brown and Black children the opportunities that touch them holistically that give them a chance at life through public schooling,” Reynolds says. “You have to have everyone who is affected at the table. You have to have people who are doing the work. You have to have students who see gaps. You have to have a team of people who have a vested interested—student, community and teachers.”

Let us know in the comments section what you think it’ll take to turn Detroit’s school system around.

For community members interested in learning more, Bobb will answer questions at an educational breakfast “What Comes in the Next Year and Beyond” on the University of Michigan-Dearborn campus on February 18, hosted by the Michigan Chronicle. To RSVP, contact Ann Lampkin-Williams at lampkin@umd.umich.edu.

Be sure to read these related articles…

• Can Detroit Be Saved?
• Kwame Kilpatrick’s 14 Most Scandalous Moments
• Detroit’s Battles

Detroit is known by many names: The D, Motor City, and Motown, among others. But this once sprawling metropolis of nearly 2 million has over the past few decades become more synonymous with poverty, crime, unemployment, and urban blight. With a population half the size of its glory days, the city now struggles to find a new identity as the auto industry—its economic engine—continues to shrink.

Challenges abound for this struggling city and its mayor. Dave Bing, elected in May to complete Kwame Kilpatrick’s term after the latter resigned amid charges of corruption, is contending with the city’s approximately $300 million deficit and a more immediate budget shortfall that he says could leave Detroit without operating capital by the end of the year.

Despite all the bad news in Detroit—and there has been plenty—hope remains. In fact, one of the keys to revival can be found in TechTown. This 9-year-old nonprofit organization is providing new companies with services, support, and resources needed to grow and thrive. The 100,000-square-foot business incubator facility—Michigan’s largest—was a former car factory built in 1927. Now, it’s home to nearly 90 companies—about 40% of which are African American-owned.

Carla Walker-Miller, one of TechTown’s residents, says the incubator gave her the support she needed to help grow her business. “I wouldn’t be as comfortable in business as I am right now and I wouldn’t be as hopeful,” says the president and CEO of Walker-Miller Energy Services L.L.C., a supplier of electrical equipment and provider of energy optimization services. “TechTown gives us the wherewithal to dream bigger and to accomplish bigger than we would have otherwise.”

Walker-Miller, whose company generated some $4 million last year, has been in TechTown for five years, having taken advantage of its mentoring services, as well as phone support and access to conference rooms to hold meetings.

TechTown helps foster innovation and entrepreneurship —vital components for a new Detroit that can no longer be a one-trick pony banking on the restructuring of a devastated automotive industry. “Instead of having 90 companies today, when you come back in three years’ time, our challenge is to have 500,” says Randal Charlton, TechTown’s executive director. “That’s one new company in Detroit every 2.7 days, from now until 2012, so this is the start of a revolution.”

But a revolution has to be fought on many fronts. The creation of tech jobs is but one battle in a series of wars this city must fight to achieve true revitalization. For a century, Michigan has been the automotive capital of the world, boasting seven times more jobs in this sector than any other state in the nation. The industry has also given birth to some of the largest black-owned businesses—many ranked among the be 100s. But since 2000 the city has lost three-quarters of its automotive jobs, and its unemployment rate has surpassed 15%. Amid this backdrop, black enterprise takes a diagnostic look at this troubled city to see what tools and parts are needed for a successful Motor City overhaul.

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.

By 1973, the city elected its first black mayor, Coleman Young, who inherited an economic mess—a staggering fiscal crisis, municipal employee layoffs, and the threat of plant closings. He brought the city back from the brink of bankruptcy by revitalizing the city’s waterfront and, in the process, bolstered the black entrepreneurial class through his administration’s minority set-aside program.

As the city was being redeveloped, however, the gas crunch of the 1970s helped open the door to competitive pressures from foreign automakers. Models that were smaller, more fuel efficient, and cheaper to make than American muscle cars enabled companies such as Honda and Toyota to grab a foothold in the American marketplace and take market share from the then-reigning Big Three: General Motors, Ford Motor Co., and Chrysler Corp.

By the 1990s, Detroit was enjoying a boom due to the growing economy and a vibrant manufacturing sector. Then-Mayor Dennis Archer presided over a city that was ranked No. 1 by Industry Week magazine on its listing of world-class communities. Black businesses, particularly auto suppliers and car dealers, grew at an exponential rate. By 1998, Michigan had more be 100s companies than any other state in the nation.

“The automotive industry was very good to black entrepreneurs here, but it also made us collectively not as aggressive on our game because it was such a lucrative industry,” says Louis Green, president of the Michigan Minority Business Development Council. “There was no urgency to diversify or explore other options.” And when all-time highs for crude oil combined with the subprime-fueled erosion of the U.S. economy, this perfect storm sent the auto industry into its worst slump ever—and took Detroit with it.

Diagnostic Measures

So the prognosis is simple: Detroit must attract industries outside of the struggling automotive space, wooing both large corporations as well as fostering entrepreneurial growth. Since no single industry can produce the job and wealth creation the auto sector did in its heyday, the city must transform itself into a magnet for as many industries as possible. This renaissance will also be fueled by the development of small businesses and minority-owned enterprises (blacks comprise 81.6% of the city’s population). For instance, automotive suppliers must rethink their business plans. “We’ve got to recognize that new entrepreneurial efforts, startup companies, new companies from overseas, or part of the wind wave—solar, advanced energy storage, battery systems, biomass systems, geothermal systems—are going to be key,” says Keith W. Cooley, president and CEO of NextEnergy, Michigan’s renewable energy industry accelerator.

It’s not like the Motor City doesn’t have its plusses though. After all, the area was a strategic trading post in the 1700s and 1800s because its vast waterways made it accessible. It also has extensive highway and rail systems. In fact, 60% of the U.S. population can be reached overnight from Detroit by land or sea. Then there’s the access to the Canadian market by way of nearby Windsor, Ontario. And it has two college campuses: University of Detroit and Wayne State University. Combined with a willing workforce, low-cost housing,  cheap factory space, and a major international airport, you have a city with the ingredients needed to participate in a 21st century economy.

The Kings see renewable energy as Detroit’s future (Credit: Ara Howrani)

But first there must be a change of culture. “I think Detroit really suffers from a lack of entrepreneurial spirit. It’s mostly a function of the fact that the auto companies have been so successful for so long and they built such a big corporate culture that permeated thinking at all levels of society there,” says Donald Grimes, senior research specialist for the University of Michigan. “You’re on your own more now than you’ve ever been. People have to recognize that. I don’t think they’re going to be able to find big institutions figuring out solutions to their problems.”

Michigan Gov. Jennifer Granholm wants to shift the state’s massive manufacturing capabilities to serve the emerging green economy. “We know that technology associated with the auto industry can be transferred to produce better materials for wind turbines and solar panels. We want to identify the natural strengths we have based upon our traditional base and move them into areas we know are up and coming, like the green economy.”

Today’s Motown Enterprises

Jimmy and Natalie King are among area residents who understand this. They also view renewable energy as being an important element in Detroit’s economic revitalization. As owners of J King Solar Technologies L.L.C., which engineers, designs, and installs solar paneling, primarily for commercial facilities, the husband-and-wife team is hoping to get a piece of the retrofitting pie as city- and state-owned buildings are brought into the 21st century with renewable energy or energy-efficient additions. Based in nearby Southfield, Michigan, the startup company, funded with roughly $180,000 from a combination of the couple’s funds and outside investments, has just one project: installation of a 145 kilowatt solar photovoltaic system in Bordertown, New Jersey. In the fall, J King Solar Technologies will be one of several vendors participating in DTE Energy Co.’s solar pilot program offering rebates to residential and small business clients.

The firm only netted about $10,000, but the Kings remain optimistic about future prospects. Jimmy, 36, a member of the University of Michigan’s famed “Fab Five” basketball team would like to see Detroit capitalize on what many consider a growth industry. “You look at the infrastructure of the city and the state itself; we have a lot of manufacturing capability,” he says. “We’d love to see green-collar jobs come to the city. That was a major factor in our determination to start this business.”

The Kings have tapped into an area where there’s plenty of money to be made. According to the LOHAS Journal, a publication that tracks economic trends, green products and services generate roughly $209 billion a year—a number that’s only expected to grow as more Americans adopt more eco-friendly practices. With its vast manufacturing capability, Detroit can capture a significant portion of these dollars through the development of wind turbines, solar panels, and energy-efficient batteries. That’s where legislation can help. “The state must have strong incentive programs that will make investment in a renewable energy system make sense—that’s when you create jobs,” says Natalie, 35. “Then developers will begin to write solar into their specs since it’ll make economic sense.”

Gov. Granholm hopes Detroit's manufacturing, transportation, and construction capabilities combined with inexpensive housing could lead to renewed interest from large and small businesses in growth industries.

 The New Growth Industries

Beyond the green space, four other industries could provide significant jobs and tax revenues. They are:

Motion Pictures: Even in a brutal economy, the motion picture industry managed to grow 1.7% in 2008 with the domestic box office generating $9.79 billion. Detroit is positioning itself as a major player by making tax incentives available to filmmakers. According to city officials, 68 films were produced in Detroit last year including 12 major motion pictures. Transformers, Dreamgirls, and Gran Torino are among big-name films shot there in recent years. “This was an entertainment city for a long time and you’ve still got a generation or two removed from the great Motown years where we still have a lot of talented young folks here and they don’t want to leave,” says Bing.

Healthcare: The healthcare industry is one of the largest in the U.S. with estimated expenditures (which include prescription drugs) of $2.2 trillion—that’s trillion, not billion. The city is home to Henry Ford Health Care System, Detroit Medical Center, St. John Health System, and Beaumont Hospitals. According to Bing, these facilities have been growing on average more than 10% a year for the past five years and are projected to expand at the same rate over the next five years.

Construction: The Bing administration is working with the federal government to make Detroit a priority in its economic recovery initiative. In June, the federal government approved nearly $125 million in funding for the city to attract jobs and investment through its recovery bond program—funds that can be used to rebuild roads and infrastructure. A proposal to revamp the city’s woeful mass transportation system is under consideration.

Automotive: Auto may be a four-letter word in southeast Michigan, but people are still going to buy cars and Detroit will likely remain the center of the U.S. automotive industry. If American automakers such as General Motors and Ford can turn around their fortunes as smaller, leaner players (and analysts are fairly optimistic they can) then the city should position itself as the place where next generation fuel-efficient technologies are developed. “One of the big bets that we are making is that electric vehicles will be an integral part of the automotive platform and strategy for years to come,” says Rod Gillum, GM’s vice president of corporate responsibility and diversity.

For these industries to take root and thrive, however, it’s imperative that Detroit ensure its business incubators and training and educational programs remain open to produce the next generation of entrepreneurs. This means financing. And believe it or not, Michigan has it. “You go 50 miles down the road to Ann Arbor that God knows is wealthy enough. They’ve got something like 17 venture capital companies of one sort or another in that small town, feeding off the university expertise,” says TechTown’s Charlton, pointing out that there’s just one such firm in  Detroit—Oracle Partners. “Job No. 1: You’ve just got to raise investment funds to invest in these small businesses.”

Surprisingly, Big Tobacco could well lend a hand to Motown’s efforts. In the mid-1990s, Michigan joined 45 other states to sue the tobacco industry seeking compensation for healthcare expenditures for ailments arising from tobacco use. Michigan’s initial payment from the tobacco industry was $104.5 million, to be followed by $279 million to $365 million annually for 24 years. The state securitized those settlement dollars to create a $2 billion fund to invest in alternative energy, advanced manufacturing, homeland security/defense, and life sciences over a 10-year period.

Repairing the School System

As one would imagine, a full economic turnaround is not only decades in the making but also rife with challenges. Perhaps the biggest in the case of Detroit is the poor educational attainment of its residents. Metropolitan areas that succeed tend to have a thriving central city with a highly educated population. In Detroit, roughly 11% of residents 25 years and older have a bachelor’s degree. Grimes says: “If you look at Seattle it’s over 50%; Boston is over 40%. It’s really important to have an educated population in your central city and Detroit does not have that.”

Illustrating this point, an April 2009 study by the EPE Research Center, a division of the nonprofit Editorial Projects in Education Inc., ranks Detroit’s graduation rate 48th out of the 50 largest cities—ahead of only Cleveland and Indianapolis. Some 27% of its students dropped out in 2008, and only a fraction of its high school graduates go on to college or technical school. This is a serious issue for a city whose workforce may not be ready for industries policymakers are hoping to attract. Granholm is trying to address it statewide by offering scholarships to every student in Michigan who graduates from high school. “We’ll give them a $4,000 scholarship to college, which is essentially two years of community college tuition here,” she says. “No matter where you are, no matter where you live, we want to double the number of college graduates, which is part of the strategy to diversify our economy.”

In response to the school system’s projected $259 million budget deficit following years of mismanagement, Granholm appointed Robert C. Bobb as emergency financial manager for the Detroit Public School System earlier this year. He assumes full financial authority for a school district with a sharp decline in student enrollment and poor academic performance. To solve its fiscal problems, Bobb may be forced to file Chapter 9 bankruptcy (the chapter of the Bankruptcy Code providing for reorganization of municipalities). He believes that to resolve long-term financial issues, the school system must “put in place, aggressively and urgently, methods for 21st century teaching and learning.”

Young, encourages Detroit’s youth to pursue careers in the sciences. (Credit: Ara Howrani)

Taking Matters In His Own Hands

Recognizing the shortfalls in the city’s public school system, particularly in the sciences, Keith Young decided to do something about it on his own. As founder and executive adviser for Ecotek, a nonprofit scientific research organization, Young helps develop future global scientists and young inventors. “The goal is to put them in a position, through hands-on work, to be able to compete with other folks around the world,” he says.

There are currently 15 children, ages 10 through 17, in the 5-year-old program, funded through Young’s business consulting service combined with not-for-profit grants. He cites that virtually all Ecotek projects, including the development of biofuels from ingredients such as soybeans, corn, and grape seed oil, originate with United Nations member countries. He asserts: “The expectation is that through my experience and background and access to resources, it will create opportunities for our kids to work and develop as global leaders.” His goal: open up as many research laboratories as possible in the United States and abroad while ensuring student scientists are able to develop inventions and gain recognition—not only in the form of scholarships—but also notoriety in their fields.

Young believes the sciences are critical to Detroit’s future. “If we do not bite into this apple called scientific research and get on the cutting edge of biotech, biomaterials, geospacial technology, and all the different technologies that drive location-based knowledge, we’re finished, it’s over,” he says. “We won’t be able to sell enough cars to recover what we have lost.”

Pittsburgh Primer

Overhauling a city is a dauntingly complex task—one fraught with thousands of potential missteps that could derail any potential progress. Once the nation’s eighth largest city and producer of nearly half of America’s steel, Pittsburgh hit rock bottom in the 1980s when competitive pressures from Germany and Japan led to a decline in the U.S. steel industry. Eerily reminiscent of Detroit’s situation, Steel City was battered by widespread layoffs (unemployment reached a staggering 18.2% in January 1983), mill closures, and mass departure of nearly half of its population, from approximately 600,000 residents to some 360,000 by 1990.

However, the city administrators shifted its economic base by attracting new industries and offering incentives to a range of corporations. “We’ve reinvented ourselves since the downsizing of the steel industry and some of our other industries in the 1980s,” says Andy Masich, president and CEO of the Senator John Heinz History Center. “That has allowed us to diversify into things like high-tech industries, robotics, healthcare, nuclear engineering, financial services, and education.” In addition, foundations and corporations endowed many of the city’s arts institutions, contributing to a higher quality of life.

While struggling with many issues urban centers are facing in today’s brutal economy, Pittsburgh’s unemployment rate (as of July) was 7.8 % vs. 9.7% for the entire U.S. And while the city’s poverty levels are high at 20.1% (the most recent figures available), it remains substantially below Detroit’s 33.8%. “I think Pittsburgh is actually doing better than the rest of the country,” says Masich. Underscoring this, Pittsburgh was named most livable city in the U.S. by The Economist earlier this year.

TechTown’s executive director is positive the same miracle can happen in his city—partially due to its prime location next to the country’s most heavily populated areas, which is desirable for international businesses looking to move products throughout the U.S. “I think we are going to be the gateway to America,” says Charlton. “We are going to be the place where the rest of the world comes into because it’s low cost and because the rest of the world wants to get into the biggest market of the world.”

Detroit has a rich history as the birthplace for scores of successful black entrepreneurs—from Berry Gordy of Motown, which was the nation’s largest black-owned business for more than 20 years, to Don Barden, CEO of Barden Cos. Inc. (No. 10 on the be industrial/service companies list with $455 million in revenues). A revitalized Motor City would not only provide jobs and business opportunities for this predominantly black city, but also serve as the primer for future urban revitalization projects to follow.

Can Detroit be saved? Given time and through great effort, absolutely. But only if policymakers, powerbrokers, and residents make the necessary changes, sacrifices, and successfully navigate the scores of obstacles that stand in the way.

This article appeared in the November 2009 issue of Black Enterprise magazine.

The woes of the auto industry have dominated business headlines all year – which has had and will continue to have a devastating toll on African American suppliers. “We had some projections going in that we might lose 50% of the black automotive suppliers. Now, with having a better sense of some additional data, it may be closer to 75%,” says Louis Green, president of the Michigan Minority Business Development Council. “They are probably responsible, just that group that might go away, they’re probably responsible for 38 to 45,000 employees. They provide a lot of opportunities to the black accountants, black IT firms, black marketing the trash and trinkets.”

This industry will most likely remain inextricably linked to Detroit and will continue to have an impact on the future of this city – even as the former Detroit Three struggle to regain their footing and market share. “One of the big bets that we are making is that electric vehicles will be an integral part of the automotive platform and strategy for years to come,” says Rod Gillum, vice president of corporate responsibility and diversity. “So we start talking about the Chevrolet Volt, with plug-in technology, we think we’re ahead of the game, we’re going to be the leader of the pack, and we’re going to bring out the vehicle next year.”

Should this vehicle – and others like it – succeed, this creates yet another opportunity in Motown. No infrastructure is currently in place to equip traditional gas stations with plug in ports for electric vehicles. “You have to put those in garages, you have to put those in carports, you have to locate those around cultural institutions. There will be hardware that will be required for that technology,” says Gillum. “Someone has to install that, someone has to manufacture the hardware, someone has to put it in commercial locations. So we fully expect that there will be a robust industry built around all the requirements associated with it.”

While General Motors places part of its hopes on electric powered vehicles (which have failed in the past), one thing is certain: the automobile isn’t going away and the automakers will continue to have an impact on the city in which they’ve operated for the last century. “GM is on good, solid footing. I don’t buy all of their rosy outlook regarding floating stock next year and being able to pay back the government real quick,” points out George Magliano, who heads US auto analysis for Global Insight, a provider of financial analysis, forecasting and market intelligence. “I think it’s going to take them awhile but they’re definitely going to survive. The Chrysler Fiat deal has a lot more risk involved but I think at the end of the day, they’re still going to be there. Ford is on good footing. They’ve ridden to the top of the heap right now.”

Magliano remains cautiously optimistic about the industry but sees the landscape continuing to evolve in Detroit. “The industry has been shifting all along. It’s not new. We’ve gone from the Big 3 to the Detroit 3 to the Big 6 and with this bankruptcy reorganization, you’re going to have different people in this business,” he says. “It’s a whole gamut of different things we’re going to be living with for awhile. The whole face of this industry has changed where Detroit controlled it and felt it was born into this business and this is the way it operated and it’s not that way anymore.”

Further Reading:

Can Detroit Be Saved?

Tourism Holds Prime Opportunities

Aerotropolis Is Expected to Help Revive Detroit’s Economy

Transforming an airport into an economic driver – or Aerotropolis – involves creating a hub that would attract airline-related industries as time-sensitive manufacturing, e-commerce fulfillment, telecommunications, warehousing and logistics). According to Robert Ficano, Wayne County’s executive and chair of the Executive Committee for the Detroit Region Aerotropolis, this project could lead to the creation of more than 60,000 jobs and an $11 billion in economic impact – and generate tax revenues that can fund city schools.

In 2009, each of the nine communities surrounding the Detroit Metro Airport agreed to set aside land that’s designated Aerotropolis property and all the permits, zoning and such will be done within 60 days of application. The revenue generated by the Aerotropolis is shared between the communities. The executive committee is pushing for legislation that would create tax incentives for businesses that set up shop on these properties. Thus far, some $5 million to 6 million has been invested into the project. This model has been successful overseas. “Right now if you go to Dubai and say I want to do a development around the airport, they’ll get you all your permits, they’ll zone all your properties and they’ll build you an airport in 30 days,” says Ficano. “So it’s not about us competing against New York or Chicago. It’s about us competing against the world.”

The warehousing and logistics industries are a good fit for the city. The Metro Detroit area is crisscrossed by several major Interstate highways and freeways including I-75, I-94, I-96, I-275 and I-696. About 60% of the U.S. population can be reached overnight from Detroit. “We are potentially, I believe, one of the best logistics, warehousing, freight forwarding hubs in America. More trade goes through this city than America does with the whole of Japan.” points out Randal Charlton. “We’re on the border of another country, Canada, and 30% of all of America’s trade with Canada goes under the Detroit River or over the Ambassador Bridge.”

An overview of the aerotropolis area. (Source: DBusiness)

Further Reading:

Can Detroit Be Saved?

Tourism Holds Prime Opportunities

Automakers Optimistic About Constant Progression