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  #1  
Old 03-10-2014, 12:05 AM
macdoe
 
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What caused Detroit to go bankrupt?

Just as the title asks....educate me on this subject.

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  #2  
Old 03-10-2014, 12:08 AM
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I think this belongs on Open Discussion, not Diesel....
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  #3  
Old 03-10-2014, 12:09 AM
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The root cause was because of Federal and State Government engineering for too many decades.
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  #4  
Old 03-10-2014, 12:11 AM
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Quote:
Originally Posted by Zacharias View Post
I think this belongs on Open Discussion, not Diesel....
Methinks post in wrong forum = time to go to bed . G'night, Mac!
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  #5  
Old 03-10-2014, 12:16 AM
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Probably would take a book to list all the reasons. For certain they were never able to cope with the loss or downsizing of the operations of the big three car makers. Yet this even if it was the major factor is not the total answer.

I suspect there may be a reluctance to really get into this in some areas. The smarter ones moved out before the massive failure of the city hit bottom. One troubling aspect is if this is the real bottom yet?
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  #6  
Old 03-10-2014, 12:36 AM
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Hubris.
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  #7  
Old 03-10-2014, 01:17 AM
macdoe
 
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Yes, sorry....put it in the wrong place. I will try to move it.
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  #8  
Old 03-10-2014, 05:59 AM
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Its never one or two things( you can usually tell someones agenda by what they believe the cause was).

I was in Detroit 25 years ago and I remember how destroyed it was. I had never seen anything like it on that scale. I grew up in a "urban community" on the south-side of Chicago, so I had a point of reference. I remember telling my friends to get the f out of here but that was their home and they wanted to do what they could.

Eventually, they moved on. Urban pioneering is a young person game.

PS. in before the move
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  #9  
Old 03-10-2014, 09:28 AM
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You take a city that's built to sustain a population of 1.2 million or so, all the roads, police, firehouses, and assorted infrastructure, that needs to be kept up and maintained, but you cut the population in half, and then half of the rest aren't working or are underworking, there you have the perfect storm. Next you add a mayor who is currently serving time for the fraud he commitment, siphon funds away, and reward your friends and relatives with lucrative contracts and jobs...and you have a double whammy. Finally, you have a city that really doesn't care much, and takes very little pride in city, when I first visited Detroit in 1990 I told friends they might was well hang a sign at the airport "Welcome to Detroit, We Don't Give a Damn". It was at every level, the service you received at hotels (I supposed the rats running the halls at the RenCen were a good thing?) even the airport itself at that time was just abysmal (long since corrected, and now a great airport, though the terminals are an inconsistently timed bus ride apart).

What's really sad is when you look at the skyline of Detroit from the Windsor side of the river, you really see a city that was beautiful, with great architecture.
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  #10  
Old 03-10-2014, 09:48 AM
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Quote:
Originally Posted by crazy4diesel View Post
You take a city that's built to sustain a population of 1.2 million or so, all the roads, police, firehouses, and assorted infrastructure, that needs to be kept up and maintained, but you cut the population in half, and then half of the rest aren't working or are underworking, there you have the perfect storm. Next you add a mayor who is currently serving time for the fraud he commitment, siphon funds away, and reward your friends and relatives with lucrative contracts and jobs...and you have a double whammy. Finally, you have a city that really doesn't care much, and takes very little pride in city, when I first visited Detroit in 1990 I told friends they might was well hang a sign at the airport "Welcome to Detroit, We Don't Give a Damn". It was at every level, the service you received at hotels (I supposed the rats running the halls at the RenCen were a good thing?) even the airport itself at that time was just abysmal (long since corrected, and now a great airport, though the terminals are an inconsistently timed bus ride apart).

What's really sad is when you look at the skyline of Detroit from the Windsor side of the river, you really see a city that was beautiful, with great architecture.
X2, and a one party system used to buying votes with other peoples money. The patronage system where you bring me a few votes and I give you a job in the real world that pays $15/hr minimal benefits but you will get $24/hr pension after 20/yr service Cadillac health plan, and so on hello Chicago. Whether it is local or national you do not hear many leaders saying that the problem is that we spend to much, but what you always hear is that we are not taking enough from them.
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  #11  
Old 03-10-2014, 10:25 AM
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On a simplistic level it's because all the tax payers moved out of the city. Detroits population peaked in the late 1950s at 1.8M people. It is currently at 700K. There simply isn't enough revenue to sustain the operations and debt previously incurred. I think the bankruptcy has been inevitable for a good 15 years, though the various administrations delayed it by borrowing to fund ongoing operations.

Why did people leave? Two main reasons in my opinion. Detroit always had significant racial tensions; there were race riots in the late 1940s and 1960s, and there were many, many lesser incidents that would not make the national news.

The second reason is the city services just absolutely stunk. For example, Detroit never plowed side streets, they did not have enough plows and personnel. The schools are as bad as any big city anywhere, and of course the crime rate in the 1970s was legendary. Because of this everyone fled. Mostly whites first, then blacks.

IMHO pensions and pay for city union employees isn't a big factor. The area was so heavily democrat leaning that elected officials did not need to buy off city employees with absurd compensation packages to stay in office. That said, the heavy union favoritism in south-east Michigan largely insured the area was unable to attract any business investment to replace the automotive sector as it went into decline.

My opinions only. I grew up in the area, though left immediately upon graduating from university - due to a lack of economic opportunity.
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  #12  
Old 03-10-2014, 10:59 AM
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1. The big three never thought far enough ahead to really combat the reliable fuel effecient imports.
2. Automation cut the need for workers at the same time, causing unemployment to become monstous.

perfect storm.
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  #13  
Old 03-10-2014, 12:09 PM
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Tom -

I don't disagree with your point #1, but I think the story is a bit more complex as well. The so-called transplant automakers (Honda in Ohio, Toyota in Kentucky, Mitsubishi and Subaru in Indiana, etc.) were all non-union and did not have any of the legacy costs of the Big 3 automakers. Legacy costs consist of the pension and medical benefits supplied to autoworkers and their dependents. My recall is that GM had legacy costs of $1500 per vehicle in the early 2000s. These costs restricted the ability of the Detroit automakers to invest in product development, and they meant that small cars (with correspondingly small margins) could not be produced profitably. Given these constraints, Detroit did the rational thing - it went after the SUV market. It didn't work out, but every other decision would have been worse.

Being unionized, the Big3 did not have the labor flexibility of the imports. The UAW contract did not give the Detroit automakers the ability to adopt higher quality and more efficient manufacturing processes; they were stuck doing business the old way. There were also some remarkable expenses - recall the jobs bank?
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  #14  
Old 03-10-2014, 02:53 PM
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This brings to mind the SUPERBOWL CRYSLER commercial WITH raper MM, invisioned a coming back to Detroit, it led one to believe the new 300 was going to be a shot in the arm that Detriot so sorely needed , a foreshadowing new vision to rebuild the lost city ,any action on that coming true for Ds work force?
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  #15  
Old 03-10-2014, 03:15 PM
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Originally Posted by chasinthesun View Post
This brings to mind the SUPERBOWL CRYSLER commercial WITH raper MM, invisioned a coming back to Detroit, it led one to believe the new 300 was going to be a shot in the arm that Detriot so sorely needed , a foreshadowing new vision to rebuild the lost city ,any action on that coming true for Ds work force?
It's marketing more than fact. There are only two assembly plants within the city of Detroit - Chrysler Jefferson North and GM Poletown. And Poletown is partially outside the city limits. There are additional plants in the Detroit metro area, but outside the city limits. Ford River Rouge and Chrysler Sterling Heights assembly come to mind. But for the most part, assembly plants are scattered all across the U.S. Only GM has headquarters in Detroit, Ford and Chrysler are in the suburbs.


Conveniently enough, Wikipedia has a list of all the auto assembly plants in the U.S.: List of automotive assembly plants in the United States - Wikipedia, the free encyclopedia

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