auto

Don't blame Detroit's woes on car industry

What does Detroit have to do to get back on its feet? What role can the auto industry play in helping to turn the city around?

Detroit will not be able to get back on its feet without help from its many constituents. In a major step toward stabilizing and rebuilding Detroit and the Detroit Institute of the Arts, a "grand bargain" has been struck.

General Motors (and the) General Motors trust fund each contributed $5 million to this effort. Fiat Chrysler Automobiles contributed $6 million and Ford Motor Company has contributed $10 million. The Detroit Three, along with the GM trust fund, have contributed $26 million to help in this process. The state of Michigan -- in an unusual show of solidarity -- also contributed $194.8 million to assist in this effort.

The grand bargain is designed to raise as much as $894 million to spin off the Detroit Institute of the Arts into a private entity and use the proceeds to fund retiree pension and benefit obligations. The UAW (United Automobile Workers) has also pledged support in raising funds for this effort. Individual retirees are scheduled to vote on their agreement to this plan and make some sacrifice in benefits as well. Creative solutions and joint sacrifice are keys to rebuilding Detroit.

Investors and entrepreneurs have begun placing both faith and dollars into rebuilding Detroit. It has become an incubator for creative and environmentally friendly small-business owners and artists. Detroit will require many great small successes to bring prosperity to the neighborhoods.

Just a few years ago, it appeared Detroit's automobile manufacturers were on the verge of collapse. In your opinion, what is the state of the U.S. auto industry -- in Detroit and elsewhere -- today? What does the future likely hold?

The state of the U.S. auto industry is quite profitable at the moment. Sales that plummeted to less than 10 million new vehicles per year in 2009 have bounced back to the 15-million-vehicle range.

Chrysler has had a remarkable turnaround with new ownership with Fiat. Jeep is doing extremely well and Ram pickup sales threaten to overtake Chevrolet Silverado sales in what would be a stunning development.

Chrysler has added two shifts at the Jefferson North Assembly plant -- adding 2,200 jobs -- and plans about 400 jobs in other Detroit facilities. Chrysler has actually saved Fiat in their time of need in the European market.

Ford, under the One Ford policy, has rebuilt itself into a profitable and well-respected maker of cars and trucks. Ford has been making quality trucks for generations; the success on the car and SUV business has helped create a more sustainable company on the global stage.

General Motors is currently under fire for a series of recalls and bad corporate behavior related to a faulty ignition switch. Fortunately for GM, it has rebounded under bankruptcy restructuring and has added over 600 salaried and 430 hourly workers in Detroit. General Motors is doing extremely well in other countries such as China and is developing much better vehicles.

Even new car companies have had success in the U.S. auto industry. Elon Musk has built a surprisingly competitive electric car company in Tesla, and a new three-wheel company has begun in the former Hummer plant. Elio Motors has taken over the Shreveport, Louisiana plant and is building a new three-wheel vehicle estimated to cost about $6,700 and get 84 mpg.

The future for the U.S. auto industry looks bright and appears strong enough to sustain itself in case the economy stutters.

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