City of Detroit Files For Ch. 9 Bankruptcy

[FirefightnRick]

Largest community to ever do so.

http://www.freep.com/article/20130718/NEWS01/307180107/Detroit-prepares-file-bankruptcy-soon-Friday

The City of Detroit filed this afternoon for Chapter 9 bankruptcy protection in federal court, laying the groundwork for a historic effort to bail out a major U.S. city that is sinking under billions of dollars in debt and decades of mismanagement, population flight and loss of tax revenue.

Now THAT's fundamental change.

Rick

[UNTFan23]

I wonder if this is the opportunity the Omni Consumer Products (OCP) company is looking for to buy a city.

Edited July 18, 2013 by UNTFan23

[GreenMachine]

I wonder if this is the opportunity the Omni Consumer Products (OCP) company is looking for to buy a city.

Can you imagine how much more efficient a company owned city would operate than govt run?

[SCREAMING EAGLE-66]

Can you imagine how much more efficient a company owned city would operate than govt run?

..

--- Let's compare... how many major companies have gone bankrupt in past 50 years [ don't forget bank bailouts too... ran by the financially "smart" people ]...vs. ... how many major cities. The big problem in Detroit is the auto COMPANIES leaving town and the declining population and tax base.

--- States are a different matter, not so locally run.... and the National debt was barely moving up (less than 2% per year during the eight years prior to 2001) until the "conservative" people took over the next eight years and doubled it (not financially conservative though) .. still not under control ... tough to stop landslides and avalanches too....

Edited July 20, 2013 by SCREAMING EAGLE-66

[UNT90]

..

--- Let's compare... how many major companies have gone bankrupt in past 50 years [ don't forget bank bailouts too... ran by the financially "smart" people ]...vs. ... how many major cities. The big problem in Detroit is the auto COMPANIES leaving town and the declining population and tax base.

--- States are a different matter, not so locally run.... and the National debt was barely moving up (less than 2% per year during the eight years prior to 2001) until the "conservative" people took over the next eight years and doubled it (not financially conservative though) .. still not under control ... tough to stop landslides and avalanches too....

Could it be because cities have a constant, involuntary revenue source from which to operate?

You got to really screw the pooch to go bankrupt as a government entity.

Problem is, Detroit's mix of crime and high taxes caused businesses to GTFO.

But Democrats have proven time and again that they'll hit that dog as often as possible.

Edited July 20, 2013 by UNT90

[DeepGreen]

Hasn't Detroit been run by Democrats for the past 50-60 years, and home to multiple(40+) unions?

[UNTexas]

Can you imagine how much more efficient a company owned city would operate than govt run?

In theory that would work. The readers digest version is the local unions would run it into the ground, forcing the management company to take business elsewhere, and force everyone to move looking for better opportunities. I also doubt a corporation would compensate people for doing nothing from birth until death. Government is the only one dumb enough to do that.

[Army of Dad]

I wonder if this is the opportunity the Omni Consumer Products (OCP) company is looking for to buy a city.

We have a winner!

[FirefightnRick]

Hasn't Detroit been run by Democrats for the past 50-60 years, and home to multiple(40+) unions?

Yes, and there are two unions who have filed suit against the city as of right now, thinking they will get more blood out of that turnip.

Rick

[gksmith]

Don't make this into a political battle. It is a matter of being diverse.

Before the 1980's Dallas was considered an "oil town." That was the business of Dallas. In the 1980's there was an oil bust and Dallas along with the rest of the country suffered. I know - I was there - just out of college (UNT, or NTSU at the time) and paralegal school and had a hard time getting a job...because of the decline in oil.

Today, Dallas also has real estate, technology and two major airlines to go with the oil. As far as technology, Dallas is thriving.

Pittsburgh was a steel town. They now have technology to go with the steel. Pittsburgh is thriving (I saw it on "How the States Get Their Shapes").

I'm not from Detroit, but my understanding is they have and always have had the auto industry and...??? No idea what else. The slow decline and bust of the auto industry has lead to the decline of Detroit. Detroit is a one trick pony.

[KRAM1]

Don't make this into a political battle. It is a matter of being diverse.

Before the 1980's Dallas was considered an "oil town." That was the business of Dallas. In the 1980's there was an oil bust and Dallas along with the rest of the country suffered. I know - I was there - just out of college (UNT, or NTSU at the time) and paralegal school and had a hard time getting a job...because of the decline in oil.

Today, Dallas also has real estate, technology and two major airlines to go with the oil. As far as technology, Dallas is thriving.

Pittsburgh was a steel town. They now have technology to go with the steel. Pittsburgh is thriving (I saw it on "How the States Get Their Shapes").

I'm not from Detroit, but my understanding is they have and always have had the auto industry and...??? No idea what else. The slow decline and bust of the auto industry has lead to the decline of Detroit. Detroit is a one trick pony.

Agree with you here...but also a history of corruption in local politics...not a good mix! Problem is..when they had a chance to do something about it to avoid bankruptcy, the unions opposed them every step of the way, and some local political cronies blocked every attempt to streamline city government, departments, taxes, employment levels, etc., etc. unfortunately...the one trick pony economy ( the same one getting billions and billions in stimulus dollars) along with the "politics" of Detroit doomed it to bankruptcy. Unfortunately, you cannot take politics out of this...which certainly did not have to happen. But the tough decisions were not made. Result....bankruptcy!

[SCREAMING EAGLE-66]

--- Detroit has been dying for decades.... even in the early 70's it had more homes reprocessed than any city in America... Foreign cars in the late 60's begin to make headway into the market... In the 50's nearly all cars in America were American made...(also remember Japan and Europe had just finished a destructive war industrially and we sold cars there as well in the 50's.) Volkswagens made headway in the 60's and others slowly moved in. A lot of American cars in the 70's were pretty bad quality wise. . Cars are made better now, don't change looks much, and last longer meaning fewer cars are sold annually compared to the population that exists. No doubt unions do get some blame but not entirely. When I was a kid any car over 5 years old was considered old and looked dated... that is not the case now. Politics is a very small part of this issue.... declining population size and car companies moving out of Detroit is ... also foreign imports which don't manufacture in Detroit...

Edited July 22, 2013 by SCREAMING EAGLE-66

[meangreendork]

Detroit is a product of a handful of major problems:

1.) Unions with really unreasonable demands. Like, I get the concept of a union - to balance out the power of the guys at the top, right? But there's a point where some unions demand more than what a company can pay for. That also hamstrung decisionmaking. It probably kept companies like GM from cutting away labels that they couldn't support in the long term.

2.) Local corruption. Tie that with badly run unions and you can bet the city was spending more than it could take in. It probably also kept other companies from other industries from moving, too.

3.) Being a one-trick pony as mentioned before. Breeding in weakness, right?

4.) And being a one-trick pony that's really bad at that one trick. Many cars made in Detroit were outclassed by cars made in other places by craftsmanship, design, and innovation. Some of that is due to union interference, some of that is due to poor management and complacency.

[forevereagle]

I didn't think that Robocop would be prophetic, but here we are.

[FirefightnRick]

I didn't think that Robocop would be prophetic, but here we are.

LOL.. Thinking the same thing.

Rick

[glick1980]

Could it be because cities have a constant, involuntary revenue source from which to operate?

You got to really screw the pooch to go bankrupt as a government entity.

Problem is, Detroit's mix of crime and high taxes caused businesses to GTFO.

But Democrats have proven time and again that they'll hit that dog as often as possible.

Any citizen or business that operates within a city's limits is voluntarily agreeing to be taxed by said city to receive city services.

You are correct, it is really hard to go bankrupt as a government entity. Detroit does, however, have the perfect mix of a revenue base that has been declining for over 50 years (almost 50% of manufacturing jobs in Michigan were lost between 2000 and 2010) and a huge service area (140+ square miles).

[FirefightnRick]

This is a 5 minute clip of a great documentary that came out last year, and I think it was even updated last week after the announcement.

One working fire is the equivilent to a 2 1/2 hour football practice in August during two-a-days, at least it is to me. Notice in the doc the one guy mentions 10 working fires in a shift. I've never had more than 3. And even though it was 111 degrees that day, I can't imagine 10? No freaking way.

Crazy.

Rick

[FirefightnRick]

Official trailer..

http://youtu.be/9tHMdbMQEH4

Rick

[gksmith]

1.) Unions with really unreasonable demands.

We all know the story of Jimmy Hoffa and Teamsters and corruption. The "tyranny of the union" is a thing of the past and there is very little corruption. Remember the survival of the union and members depends on the survival of the company. Unions want a fair price for their profession. In negotiations, the two sides can't be too far apart or they will never strike a deal. The union is not out to bankrupt the company. They want to get a fair wage for their members, and protection for the more senior members if it comes time for layoffs.

[GreenMachine]

We all know the story of Jimmy Hoffa and Teamsters and corruption. The "tyranny of the union" is a thing of the

past and there is very little corruption. Remember the survival of the union and members depends on the survival of the company. Unions want a fair price for their profession. In negotiations, the two sides can't be too far apart or they will never strike a deal. The union is not out to bankrupt the company. They want to get a fair wage for their members, and protection for the more senior members if it comes time for layoffs.

The SF rail workers union was going on strike because the workers had to pay $92 per month, not paycheck, but month, for their portion of medical, dental, and vision insurance and the union thought that was way too high. That demand is absolutely outrageous. Edited July 29, 2013 by GreenMachine

[THOR]

I hate unions...strike if you don't get what you want...whine....many folks don't get what they want but the still do their jobs...

[FirefightnRick]

We all know the story of Jimmy Hoffa and Teamsters and corruption. The "tyranny of the union" is a thing of the past and there is very little corruption. Remember the survival of the union and members depends on the survival of the company. Unions want a fair price for their profession. In negotiations, the two sides can't be too far apart or they will never strike a deal. The union is not out to bankrupt the company. They want to get a fair wage for their members, and protection for the more senior members if it comes time for layoffs.

I know that is what a lot of unions are like, and what others are working for, but not all of them. I'll cite the machinists union strike on Lockheed two years ago and the Hostiss Tweenkies Union a year ago as examples.

And BTW, Detroit currently has 47 active unions inside the city. They are not the reason Detroit went broke but they didnt help either.

If you'll watch the documentary for Burn, and it's currently available on Amazon, not Netflix, they tell how poorly their equipment repair and replacement system is due to funding because 98% of the fire department's budget goes to payroll, with two percent for everything else? How did their pay contract get that way? I'll give you one guess.

Rick

[FirefightnRick]

House in Detroit up for sale for $1,... And has been listed for over 500 days.

http://www.dailymail.co.uk/news/article-2381283/Going-going-going-Detroit-family-home-sale-519-days-despite-market-just-1.html

Rick

[KRAM1]

We all know the story of Jimmy Hoffa and Teamsters and corruption. The "tyranny of the union" is a thing of the past and there is very little corruption. Remember the survival of the union and members depends on the survival of the company. Unions want a fair price for their profession. In negotiations, the two sides can't be too far apart or they will never strike a deal. The union is not out to bankrupt the company. They want to get a fair wage for their members, and protection for the more senior members if it comes time for layoffs.

Thanks for a good laugh.

[CMJ]

It'll be a long comeback, but I actually think Detroit will be back. I mean it'll never be the industrial giant that it was when it basically defeated Nazi Germany (weapons made in Detroit were used not only by us in WWII, but all of our allies), but I do think the city will recover. The seeds of the recovery are already there. Dan Gilbert is remaking downtown with all of his investment. That is opening up neighborhoods slightly outside of the core as people are slowly moving outside of the central portion of the city. A lot of artists are moving to Detroit because it's so damn cheap right now. I have seen with my own eyes in Los Angeles what artists can do for downtrodden areas. People like to make fun of them (myself included sometimes), but they really do clean up crappy places (you should have seen downtown LA ten years ago versus today for instance), and make them "cool" and "hip" to live. That eventually brings in business.

It's gonna take 25-35 years, but yes I do think the city will be back. Remember about that long ago, things were so bad in New York City, imagining the city as a burned out jail was a freaking sci-fi film plot.

Edited July 31, 2013 by CMJ