Who Killed Detroit? (The Answer Is Obvious)

Cities: Poor Detroit. It hasn't had any good news for decades, and now, despite a $77 billion bailout of the auto industry, its population continues to implode. The No. 1 reason: the United Auto Workers union.

Cities: Poor Detroit. It hasn't had any good news for decades, and now, despite a $77 billion bailout of the auto industry, its population continues to implode. The No. 1 reason: the United Auto Workers union.

Census data released Tuesday show Detroit's population has plunged 25% since 2000 to just 713,777 souls — the same as 100 years ago, before the auto industry's heyday. As recently as the 1970s, Detroit had 1.8 million people.

What's happening is no secret: Detroiters are fleeing an economic disaster, the irreversible decline of the Big Three automakers.

In his now-famous Super Bowl commercial for Chrysler, rapper Eminem drives up to a theater in a sleek new 200 model and says, "This is the Motor City. And this is what we do." But, sadly, that's no longer the case. Detroit's decline has been shocking.

Sure, a lot of the blame goes to a generation of bad management. But the main reason for Detroit's decline is the greed of the industry's main union, the UAW, which priced the Big Three out of the market.

As recently as 2008, GM, Ford and Chrysler paid their employees on average more than $73 an hour in total compensation. The 12 foreign transplants, operating in nonunion states mostly in the South and Midwest, averaged about $42 an hour.

You nailed it. The decline has been going on for a long time.

Detroit received widespread acclaim for its leadership in the program, which attempted to turn a nine-square-mile section of the city (with 134,000 inhabitants) into a "model city." More than $400 million was spent trying to turn inner cities into shining new monuments to government planning. In short, the feds and Democratic city mayors were soon telling people where to live, what to build, and what businesses to open or close. In return, the people received cash, training, education, and health care.
The Model Cities program was a disaster for Detroit. But it did accomplish its real goal: The creation of a state-supported, Democratic political power base. The program also resulted in much higher taxes – which were easy to pitch to poor voters who didn't have to pay them. (Mayor) Cavanagh pushed a new income tax through the state legislature and a "commuter tax" on city workers.
Unfortunately, as with all socialist programs, lots of folks simply don't like being told what to do. Lots of folks don't like being plundered by the government. They don't like losing their jobs because of their race.
In Detroit, they didn't like paying new, large taxes to fund a largely black and Democratic political hegemony. And so, in 1966, more than 22,000 middle- and upper-class residents moved out of the city.
---snip---
And so, you might rightfully ask... after five years of centralized planning, higher taxes, and a fleeing population, what did the government decide to do with its grand experiment, its "Model City"? You'll never guess....
Seeing it had accomplished nothing but failure, the government endeavored to do still more. The Model City program was expanded and enlarged by 1974's Community Development Block Grant Program. Here again, politicians would decide which groups (and even individuals) would receive state funds for various "renewal" schemes. Later, Big Business was brought into the fold. In exchange for various concessions, the Big Three automakers "gave" $488 million to the city for use in still more redevelopment schemes in the mid-1990s.
What happened? Even with all of their power and all of the money, centralized planners couldn't succeed with any of their plans. Nearly all of the upper and middle class left Detroit. The poor fled, too. The Model City area lost 63% of its population and 45% of its housing units from the inception of the program through 1990.

Lot's more at the source.

In the 1960’s when Japanese cars first started to make their appearance in the U.S. Detroit laughed at the junk and said the tiny market share was nothing to worry about, afterall Detroit built what America wanted and sold all it built.
The Japanese studied the American market, slowly improved their quality and expanded market share,
Detroit responded by arrogantly saying they knew America didn't want and wouldn't buy small cars so let the Japanese have that niche market.
The rest is history, the Japanese continually improved their quality, modernized their plants and production methods and moved into other auto markets.

Detroit responded with the Corvair, the Vega, the Pinto and various pieces of Mopar junk. And it was too late.
Detroit caved to the unions to maintain peace and tried to play catch-up in old factories.

The fate of Detroit as The Motor City was sealed.

If your objective is to BUILD CARS you will want to measure production line workhours in terms of the cost to achieve one of those hours.

That's all GM claimed the $73 number was about.

If your objective is to figure out if your company has enough lawyers (as employees or on retainers) you will take a look at their won/loss record, and total net cost per suit.

After all, you can always throw another lawyer on the case and increase your probability of winning ~ but all that happens when you add another production line worker is you get an increase in costs.

It's how you line up the production line people and their machines that improves your bottom line.

At GM all those lawyers and marketing people were, it turns out, overhead and the average cost per production line workhour could have been lowered by firing the lawyers and marketers.

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