The fate of Detroit

Updated: Saturday, August 3, 2013
The fate of Detroit story image
KALAMAZOO, Mich. (NEWSCHANNEL 3) - On Wednesday, one week after it declared itself bankruptcy, the City of Detroit celebrated its 312th birthday.

Tonight, in Tom's Corner, Tom Van Howe says Detroit's troubles, decades in the making, are only just beginning.


I'd like to be a rah-rah guy for our state's largest city. But the truth is, no matter how I twist it and turn it and shape it...I Just can't.

The City of Detroit is the result of a train-wreck 50 years in the making. We all watched it happen, one slow-motion, hair-raising leg at a time.

How many times have you seen someone shake his head and say, helplessly, "well...that's Detroit."

And there are so many things to blame it on. Blame it on incompetent or corrupt leadership. Blame it on an auto industry that seemed unable to compete with the rest of the world. Blame it on unfunded pensions.

Blame it on NAFTA that did take hundreds of thousands of jobs south. Blame it on OSHA, which required companies to spend millions to make workplaces safer. Blame it on the cost of oil from the Persian Gulf. Blame it on white flight.

Blame it on loss of tax revenue.

Blame it on what or whomever you please.

The fact is, Detroit is a gigantic mess. It is a failed city.

In 1960 it was the fifth largest, and richest, per capita, city in the country with a population of nearly two million.

Now, with a population of just 700-thousand, 60 percent of its children live in poverty. Unemployment plods along at nearly 20 percent.

Some 30-thousand current and retired city workers are wondering if they'll have any of the pension they helped pay for.

A full third of Detroit's 140-square miles—an area the size of Grand Rapids—is now vacant or desolate.

It's a city that finds it difficult to even maintain street lights.

In the city itself, there is anger and outrage at the predicament people are finding themselves if they believed the city could go on borrowing and running up bills that it never intended to pay. That day is now over.

I thought the defiant column by Mitch Albom, the celebrated Free Press writer, was terrific.

"Yeah, we're broke," he wrote, "But we got up this morning and had breakfast. Yeah we're broke. But we'll carry on...We'll still be here. We're not going anywhere."

It's nice and its easy to be defiant. But its not going to pay any bills. Its not going to bring back people who've already left. It's not going to raise tax revenues. Its not going to make leaders anymore honest.

For the record...Stockton, California, declared bankruptcy 13 months ago. And its parks are reportedly populated with drug dealers, its courts with lawsuits, its business districts with boarded up windows—with little relief in sight.

Are there positive signs in Detroit? Yes.

The Tigers are in first place. Consumer Reports says the new Chevy Malibu is hands down the best car on the road in just about any price range. Private developers want to build a new soccer stadium downtown. The state has agreed to issue $450 million in bonds to help develop a new Red Wings hockey stadium—and $200 million more to help develop 45 blocks near downtown.

So yeah...some things have the patina of progress.

But bright spots aren't enough.  Detroit is in for a long painful recovery. If, in fact, its up for it. There will be no bailouts.

We know that now.

So, in a very real way, Detroit is a new frontier—an urban frontier—waiting for courageous and creative private investment to mold something new from the rubble.

We have our fingers crossed. In the meantime...Happy birthday.

In this corner...I'm Tom Van Howe.

Business News

Last Update on October 06, 2015 17:15 GMT


WASHINGTON (AP) -- The U.S. trade deficit jumped sharply in August as exports fell to the lowest level in nearly three years while imports increased, led by a surge in shipments of cell phones from China.

The Commerce Department says the deficit increased 15.6 percent to $48.3 billion, the biggest deficit since March. Exports of goods and services dropped 2 percent to $185.1 billion, the lowest level since October 2012, while imports rose 1.2 percent to $233.4 billion.

Exports have been hurt this year by the rising value of the dollar, which makes U.S. goods less competitive on overseas markets, and weaker economic growth in China and other major export markets. Economists say these trends will combine to push the deficit higher and make trade a drag on overall growth this year.


WASHINGTON (AP) -- President Barack Obama is touting a new trade agreement between the U.S. and 11 other countries, saying it will provide American businesses and workers with access to new, fast-growing markets.

He says the deal will provide a fair shot and level the playing field.

But the pact still has to clear Congress.

A vote isn't expected until next year. Opponents will have plenty of time to lobby against an accord that Obama says will eliminate some 18,000 taxes on U.S. goods.

Labor unions represent the biggest obstacle Obama must overcome. Many Democratic lawmakers are also against the Trans-Pacific Partnership, while Republicans generally are more supportive.

The president spoke to reporters at the Agriculture Department, where he met with agriculture and business leaders.


WASHINGTON (AP) -- The International Monetary Fund is downgrading its forecast for global economic growth and says falling commodity prices and jumpy financial markets have raised global risks.

The IMF says the world economy will grow 3.1 percent this year, down from a July forecast of 3.3 percent and the slowest pace since the recession year 2009. The report is being released in advance of the IMF-World Bank annual meetings this week in Lima, Peru.

The report predicts the United States will grow 2.6 percent this year, up from a July forecast of 2.5 percent. Emerging market economies, hurt by tumbling raw materials prices, will grow 4 percent.

The IMF left unchanged its forecasts for growth in the 19 countries that share the euro currency (1.5 percent) and China (6.8 percent).


LUXEMBOURG (AP) -- The European Union's 28 finance ministers have agreed to share details of tax deals their countries reach with big multinational companies, in a move they hope will clamp down on aggressive tax avoidance.

Pierre Gramegna, the finance minister of Luxembourg, which is currently chairing the EU, said Tuesday that the political agreement means the European Commission can get a directive ready by the end of the year. The rule would be enacted across the 28 member states by the start of 2017.

He hoped the deal will mean companies pay their fair share of taxes.

Many companies, such as Amazon and Starbucks, have struck deals with certain European countries in recent years that have allowed them to pay little tax.


DETROIT (AP) -- The United Auto Workers union is threatening to go on strike against Fiat Chrysler.

The company says in a statement that it received a strike notice from the union and it continues to work toward reaching an agreement.

A letter to Fiat Chrysler that was posted on the UAW website says the union is terminating its contract with FCA at 11:59 p.m. Wednesday.

Union members overwhelmingly rejected a tentative contract agreement with the company last week. Union leadership said they would go back to the bargaining table.

The union's four-year contract with FCA expired on Sept. 14 but workers have remained on the job under a contract extension.

A message was left Tuesday for a UAW spokesman.


WOLFSBURG, Germany (AP) -- Volkswagen's chief employee representative says that the emissions-rigging scandal won't have an effect on jobs for the time being.

Bernd Osterloh says it's not possible to say today "whether and how this wrongdoing could affect our jobs in the medium and long term." But he said for now there will be "no consequences for jobs," including those of temporary workers.

Osterloh acknowledges that recovering from the scandal won't be painless. But he says the employee council "will watch carefully that this crisis, which was caused by a circle of managers, is not settled on the backs of employees."

He adds that, "for reasons of decency," it's assumed the management board's bonus will fall "in the same way as the workforce's bonus."


CHARLESTON, W.Va. (AP) -- Patriot Coal says it expects to lay off more than 2,000 workers in West Virginia.

Patriot issued layoff warning notices in the counties of Boone and Kanawha this week.

Kanawha County Commission President Kent Carper says 1,065 workers in his county will lose their jobs. There will be 483 layoffs at Speed Mining LLC in Dawes, 288 at Wildcat Energy in Eskdale, 161 at Midland Trail Energy, 118 at Remington LLC in Eskdale and six at Little Creek Dock in Charleston.

Assistant Boone County administrator Pam White says 970 workers in her county will be affected.

Patriot filed for Chapter 11 bankruptcy in May.

Patriot says the warning notices are conditional because it doesn't yet know who will purchase its assets or what the purchaser's hiring plans will be.


WASHINGTON (AP) -- The government is proposing a record $1.9 million fine against an aerial photography company for flying drones in crowded New York and Chicago airspace without permission.

The Federal Aviation Administration says SkyPan International Inc. of Chicago operated 65 unauthorized flights between March 2012 and December 2014 in some of the nation's most congested airspace.

More than half the flights took place in heavily restricted areas of New York airspace without air traffic control clearance. Also, the drones weren't equipped with two-way radio, transponder and altitude-reporting equipment required of manned aircraft.

SkyPan has 30 days to respond to the FAA.

The fine announcement comes one day before an FAA official is expected to be face tough questioning at a House Transportation and Infrastructure Committee hearing on safety hazards created by drones.


HONG KONG (AP) -- A clothing and footwear industry group is calling for the U.S. government to put Chinese e-commerce giant Alibaba's Taobao site back on its list of "Notorious Markets" for counterfeit goods.

The American Apparel and Footwear Association said in a statement Tuesday that "counterfeits remain rampant" on Taobao three years after it was taken off the list.

The group urged the U.S. Trade Representative to return Alibaba to the list of online and physical marketplaces that reportedly engage in or facilitate substantial copyright piracy and trademark counterfeiting.

Fakes have been a long-running problem for Alibaba. Taobao was first added to the list in 2011 and removed a year later after the company worked with trademark owners to clean up the site.


PURCHASE, N.Y. (AP) -- PepsiCo has topped Wall Street expectations with its third-quarter profit.

The Purchase, New York-based company said it had a net income of $533 million or 36 cents per share. After adjustments, earnings were $1.35 per share, 9 cents better than analyst forecasts.

Higher prices and increasing volume pushed up snack sales for PepsiCo's North America division by 2 percent. The maker of Frito-Lay chips has been increasing options on sizes, offering Lay's potato chips in a bag that is two ounces smaller than the traditional 10-ounce bag.

PepsiCo's North American drinks business, which includes Gatorade and Aquafina water, saw volume rise 3 percent, while higher pricing pushed up revenue by 5 percent.

Soda sales continued to decline, reflecting a shift in the beverage industry toward non-carbonated drinks. CEO Indra Nooyi says focusing on just carbonated soft drinks has become "a thing of the past."


NEW YORK (AP) -- Cybercrime costs are climbing for companies both in the U.S. and overseas amid a slew of high-profile breaches.

A sixth-annual study conducted by the Ponemon Institute pegged the average annual cost of cybercrime per large U.S. company at $15 million. That's up 19 percent from $12.7 million a year ago.

It also represents an 82 percent jump from Ponemon's inaugural study six years ago.

The study examines the total cost of responding to cybercrime incidents, along with after-the-fact expenses designed to prevent additional costs stemming from the potential loss of business or customers.

The study, sponsored by HP Enterprise Security, looked at a sample of 58 large U.S. companies. Globally, the study analyzed data from 252 companies in seven countries.

Washington Times