Bloomberg News

Detroit’s Devotion to the Car Paved Way for Its Undoing

August 05, 2013

Detroit’s Devotion to the Automobile Paved Way for Its Undoing

The General Motors Co. headquarters building is seen in the distance past a run down building in Detroit, Michigan, on April 1, 2013. Photographer: Jeff Kowalsky/Bloomberg

In the Detroit Historical Museum, a Cadillac body is lowered again and again onto a chassis. Mannequins represent workers. Nearby murals show bustling streetscapes that have long since disappeared.

Among the institution’s collection of about 65 classic cars are a 1924 Hupmobile Roadster, a 1950 Packard Deluxe Eight and a 1963 pre-production Ford Mustang. Their future is now in doubt: The vehicles are among assets that may be sold to pay creditors in the largest U.S. municipal bankruptcy.

Just as Detroit may not be able to keep the symbols of its proud past, it also must overcome their legacy. The auto business, which by 1950 made Detroit the fourth-largest U.S. city, also enabled its destruction and depopulation. It created a place larger than San Francisco, Boston and Manhattan combined that today is impossible to maintain. The car allowed jobs to migrate out of the city itself, and even discouraged creation of a regional transit system that would have let workers follow.

“It has provided so much for us, and it is still today a deep part of who we are,” Dan Kinkead, executive director for Detroit Future City, a nonprofit recovery project, said in a telephone interview. “On the other hand, it has contributed to some of the biggest challenges that we face right now.”

Wheel Love

Detroit filed an $18 billion bankruptcy July 18 and may sell assets, including its parking garages, and lease its Belle Isle Park to the state. While Emergency Manager Kevyn Orr has said he has no plans to unload holdings such as the car collection and the paintings in the Detroit Institute of Arts, there are no assurances that a judge will protect them, said Mike Smith, a former curator at the Detroit Historical Museum.

The car collection, valued as much as $15 million, should be preserved for history’s sake, said Smith, now archivist at the Walter P. Reuther Library at Wayne State University.

“This is the Motor City,” Smith said. “We follow cars, we love our cars, we live in our cars, and you drive everywhere.”

Detroit grew to 139 square miles (360 square kilometers) in part because of the cars that workers could afford with factory wages and company discounts, said Robin Boyle, chairman of the Urban Studies and Planning Department at Wayne State.

Outward Bound

Such mobility in turn encouraged road construction and a boom in single-family homes, especially after World War II, that spread first across Detroit and then into the suburbs as businesses and families left, Boyle said.

The Northland Center, a shopping mall in Southfield just north of the city that was the world’s largest when it opened in 1954, “heralded the beginning of the end for downtown Detroit’s shopping district,” according to the Detroit Historical Society’s website.

Today, Detroit’s 5,055 people per square mile make it the 11th densest among the 25 most populous cities. Chicago has 11,953 per square mile.

Almost 67 percent of Detroit dwellings are single-family houses, the most of any U.S. city with more than 300,000 units, according to the Census Bureau. Detroit has almost 150,000 vacant and abandoned parcels, and its 20 square miles of vacant land is about the size of Manhattan, according to the Detroit Future City report.

That sparsity has made maintaining services a Sisyphean task, especially when Detroit’s tax base dwindled as it lost more than 1 million residents since 1950, Boyle said.

Balky Buses

Police take an hour on average to answer calls. A fire station on the west side must cover almost 50 square miles. There are thousands of broken streetlamps, and repairing, modernizing and reducing the system’s footprint would cost $140 million to $200 million, according to a 2010 study by McKinsey & Co., a consulting firm.

Detroit’s east-west border with its northern suburbs stretches 18 miles. The city’s freeways allow fast access in and out of suburbs by car, though traversing the city by surface roads can be arduous.

Driving the length of Detroit by car using freeways takes about 40 minutes, southeast to northwest, barring traffic jams. The journey takes at least two hours by bus -- if it shows up.

Some riders report waiting two hours or more for buses that should run every 15 minutes, said Megan Owens, executive director of the Transportation Riders United, a nonprofit watchdog organization for mass transit.

Easy Living

It wasn’t always thus.

Starting in 1914 with Henry Ford paying workers $5 a day to reduce turnover and sell more Model Ts, the car industry brought people and prosperity to Detroit, said Charlie Hyde, a professor emeritus at Wayne State who has written and taught about the history of Detroit and the auto industry. It also drove out other companies and industries that couldn’t afford to pay the same wages, making the Motor City essentially a one-industry town, Hyde said.

That was fine when what are now General Motors Co. (GM:US), Ford Motor Co. and Chrysler Group LLC were booming. When foreign competition and other pressures led to a decline that culminated in the 2009 GM and Chrysler bankruptcies and a restructuring at Ford, the impact was devastating, he said.

The metropolitan area lost more than 435,000 jobs between 2000 and 2010, according to federal data, and Michigan ranked last among U.S. states in employment growth in the Bloomberg Economic Evaluation of States from the first quarter of 1995 through the first quarter of this year.

Like Phoenixes

Automobiles also contributed to the Detroit area’s not having a work force as educated as those in other regions, Hyde said. For decades, one could get a job at a car plant that paid enough to raise a family and still afford a summer cottage in northern Michigan -- all without a college degree, he said.

“The auto industry’s success in Detroit was really a blessing and a curse,” Hyde said.

Meanwhile, the companies, relieved of debt in restructuring, thrive. Shares (F:US) of Ford, headquartered in Dearborn, have risen 35 percent this year, compared with about 20 percent for the Standard & Poor’s 500 index.

The auto business, and racial segregation that was exacerbated as people left for the suburbs, even contributed to the Detroit region not having a coordinated mass-transit system, Charles Ballard, an economics professor at Michigan State University, said by phone.

As a result, those who couldn’t afford a car had trouble getting jobs, especially as factories relocated to the suburbs, said Saunteel Jenkins, president of Detroit’s city council. There is one job for every four Detroit residents, according to Detroit Future City, and the city “would be much better off today” with regional transit, Jenkins said.

Hitting Bricks

Almost 24 percent of Detroit households now have no vehicle available, the eighth highest among cities with at least 200,000 households and behind cities such as New York, Washington and Boston with robust transit systems, according to Census data.

Hundreds of millions of federal dollars available under former presidents Gerald Ford and Jimmy Carter weren’t tapped because the city and suburbs couldn’t agree on what system should be built, said Paul Hillegonds, a former Michigan House of Representatives speaker.

“The inability of a spread-out region to come together on some regional projects like transit, I think has been a decades-long challenge,” said Hillegonds, a Republican.

Village City

That might finally be changing. The legislature voted last year to create a Regional Transit Authority for southeastern Michigan to study and implement a transit system. Republican Governor Rick Snyder in January named Hillegonds its chairman.

Detroit Future City has produced a plan that includes an integrated regional public transportation system by 2030 with a stabilized city population of between 600,000 and 800,000.

The group envisions a “massive demolition/deconstruction program” and repurposing vacant land, including with urban farms. Services would be reconfigured, such as by reducing the number of street lights by about half and using solar power for lamps in high-vacancy areas. Neighborhoods would be clustered within a half-mile of schools like villages.

No matter how the region evolves, autos shaped it, which is why the car collection should be preserved, said Bob Sadler, director of marketing at the Historical Society.

Wandering through the display with his 8-year-old granddaughter, Matthew Scott, 59, a Detroit maintenance worker, said he hopes the city doesn’t sell the vehicles because he wants a younger generation of Detroiters to know their heritage.

“Why take something that’s positive and turn it into a negative?” Scott said.

To contact the reporter on this story: Mark Niquette in Columbus at mniquette@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • GM
    (General Motors Co)
    • $33.73 USD
    • 0.30
    • 0.89%
  • F
    (Ford Motor Co)
    • $15.45 USD
    • 0.15
    • 0.97%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus