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Detroit ... the clear signal that manufactuing is dead in 1st world countries

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July 19, 2013 10:33:05 PM

http://www.telegraph.co.uk/news/worldnews/northamerica/...

http://www.nytimes.com/2013/07/20/us/going-in-uncertain...

Is it simply about the US moving to a free market economy and the cost of wages to manufacture being too high there ... discuss?

July 19, 2013 11:07:01 PM

When your major job project, ( in this case automotives) ceases to exist within your region, you will face the consequences of zero income minus liabilities. You will flee to another metropolitan area where you will find income. Taxation I am not sure about, don't know much about the area. However, I do know that across the river in Canada, their economy is in full swing. Seems strange. They even have the same automotive industry. Yet, theirs is still running?
July 20, 2013 3:25:40 AM

wtf are you saying? Most of that dribble made no sense dude.
July 20, 2013 10:05:18 AM

Specifically what folks? The local, State or Federal?

If the local or State govt made it so hard there but its fine in Carolina what the dickens does that have to to with the Democrats?

Hence why I started this thread ...
July 21, 2013 7:25:09 AM

You have a few bad things that happened. Once upon a time detroit was a large industrial city with plenty of work and a strong urban population. This fell apart due to two main factors... First, due to the rise of globalism, a lot of the industry in Detroit went away as it was outsourced to cheaper locations outside of the US (and, notably, as US automakers lost much ground to foreign automakers). This led to a significant decline in the well paying jobs that built the city.

Secondly, a significant population of the city began to move out of the city and into surrounding suburbs. In most locations this is not a big deal as the city annexes surrounding suburbs. In Detroit, due to some complicated legal/political reasons, they could not do this. The upshot is that much of the population moved to surrounding areas where taxes were now paid to the suburb rather than the city, starving the urban areas for tax revenues.

Starved of money with massive unemployment and many people on welfare, the city lacked funds to maintain critical infrastructure and even emergency services, which led to an increase in crime and lack of maintenance to basic services. We're talking things like not being able to keep street lights lit, slow 911 response times, not enough police or firefighters, crumbling streets, etc etc. This further fed the flight of people out of the city to the suburbs, leaving primarily impoverished people (predominantly black) who could not afford to move as the main urban population. Population declines led to numerous abandoned properties as people were foreclosed on and fled, with no one to take over the homes. Entire neighborhoods ended up abandoned and crumbling. The city went bankrupt and the state had to take over.


Oldmangamer_73 said:
The state of Michigan is doing just fine. It's Detroit that looks like an atomic bomb went off.

This site gave some insight into this.

http://www.foundmichigan.org/wp/2012/04/18/what-the-hel...

Quote:
Well, the key to understanding what’s happening in Detroit as well as all these Rustbelt cities—Cleveland, Detroit, St. Louis, Gary, Flint, all of them—is that we blame white flight and deindustrialization, but essentially what happened after World War II is that all American cities spread out. Sunbelt cities were able to capture that growth through annexation. In 1950, Houston, Texas, for example, was roughly the same size as Detroit: Houston was 160 square miles, Detroit, 139. But today Houston is 600 square miles because it captured all that suburban growth—they annexed all their suburbs as they grew. Detroit and Cleveland and all the other older cities, however, were not allowed to do that for a variety of legal and political reasons. And so even though metro Detroit became much larger geographically, the city itself was trapped behind these rigid municipal boundaries, and the tax base went away to the suburbs. So today the tax base of metropolitan Detroit includes just a tiny part in the city and the vast majority is in the suburbs - See more at: http://www.foundmichigan.org/wp/2012/04/18/what-the-hel...



July 22, 2013 7:54:29 AM

Oldmangamer_73 said:
Much of what you say is true though your premise of all car manufacturing moving out of the country is off. Tons of cars are still made right here in the US, just not in Detroit anymore. I know, my former company serviced many of the plants and we were trying to get more when we parted ways.

You said the businesses moved away to where it was cheaper. Why was cheaper elsewhere? What could the leaders of Detroit have done to entice those businesses to stay?

You said people moved out of the city to the burbs. What could the leaders of Detroit (over the decades) do to entice people to NOT move out of the city to suburbs where taxes are less?

The cities policies drove away business and the residents. That's the truth. I always talk about voting with your feet. Detroit is prime example of just that.

p.s. you left out the impact of the workers union on the businesses.


Since I dont want my absence to be noted.... Ill respond as best I can. Now mind you Ive never been to Detroit and Im certainly not an expert so if anyone else wants to add they are more than welcome.

Banking on cars wasnt sustainable long term. Ive said this before, Americans arent button pushers. Companies like making money, why pay an American 10x what you could pay some Bangladeshi dude to do? You could find cheaper employees and cheaper resources elsewhere. I think this had a greater impact on the job market than you think, there was no way to really fix this problem. Japanese cars started really hitting their stride in the late 70's and 80's putting a big dent in American markets.

Detroit used to be perfectly situated on the Great Lakes to get easy access to coal, iron, timber, vespene gas etc with new transportation methods (Plane, Supertanker) their location was still good just not as great as it used to be.

One of the problems with the burbs and why the City never annexed them is because both the suburban people and the city folk have to agree to the new laws... so of course the suburbs chose to be independent and pay lower taxes instead of joining.

Cutting taxes in the city, taking out loans for the future caught up with them. To keep people in the city they cut taxes and put in cheap housing. So now you had a poor (Uneducated) class working non-union sh*t jobs and making very little money.

July 22, 2013 8:07:35 AM

Reynod said:
http://www.telegraph.co.uk/news/worldnews/northamerica/...

http://www.nytimes.com/2013/07/20/us/going-in-uncertain...

Is it simply about the US moving to a free market economy and the cost of wages to manufacture being too high there ... discuss?



Graduating high school, starting assembly line work was $24/hour. High school or GED required. Many, many friends took that job and never thought twice. No skillset, nothing to help them get another job. Just basic labor. $30/hour a year later, plus your bonuses and raises if you stayed in that position.

Now, starting pay is $14/hour for assembly line, $24/hour after your first year. They claim that labor only added $2-$3k per car produced. I never really looked at car produced vs car sold though.

A lot of movies that are based in Detroit (Three Brothers?) aren't even shot there. The city is considered too run down to make a movie about a run down neighborhood. Michigan, Detroit mainly has been offering filming companies tax breaks or exemptions to get them to come in to film. The jobs pay well for a short period of time.

Manufacturing can exist. As the Big 3 wanted agains the UAW: We'll pay if we can set quotas.

Did you know that the labor force is currently not held to any production quota? How the hell can you have a successful business if you don't have a production quota? That killed manufacturing.
July 22, 2013 10:57:02 AM

Dude, I dont think its criminal, you posed a question I gave an answer. Its really hard to discuss anything with you when you ask questions with an answer already formed.

Just two things.... Could you show me the numbers that the US auto industry didnt take any hits in the 70's and 80's? And what policies did they city implement to drive business away? You seem to be railing against the progressive but havent actually said anything..... Marv makes better points.

I never gave my opinion either way if annexing the suburbs was a good or bad thing, its what the people wanted, but its an important part of the equation.
July 22, 2013 11:26:00 AM

First, what happened in Detroit was really a new concept. Incorporating into city limits when it benefits, great idea at the time. They were going up and up.
I just read there are only ~700,000 people left in Detroit. That's considered a small city when it used to be one of the country's largest. That decline will cause any city to fail.

The businesses were generating enough money to provide for the workers.. all great but when things go down hill like other countries developing vehicles, or streamlining the process, or really for that matter, globalization, all good things come to an end. There was no contingency plan. That's where the problem exists.
July 22, 2013 12:12:26 PM

But HOW are the progressives and liberals at fault for this? as Riser pointed out much of the surrounding area is conservative / republican why didn't businesses just reallocate out of the city?

Im not asking you to give an economics course on Detroit only support your argument that liberals/progressives are to blame.

July 22, 2013 12:48:49 PM

The point I made about leaving Michigan is there is a whole state attached to it.

Alright Im dropping out of this thread but before I go you do realize you just made up the definition of progressive (and dropped liberal?) and never really gave any supporting evidence of why you think the way you do. Also wouldn't you say it was awfully "progressive" of Richmond to diversify lol?


Im leaning a bit more towards globalism and poor planning for the future, I havent heard anything about how republicans or conservatives would have done anything differently.
July 22, 2013 1:37:16 PM

wanamingo said:
But HOW are the progressives and liberals at fault for this? as Riser pointed out much of the surrounding area is conservative / republican why didn't businesses just reallocate out of the city?

Im not asking you to give an economics course on Detroit only support your argument that liberals/progressives are to blame.



The UAW had the power with the local politicans to force all of their distributors and parts markers to have UAW employees. The businesses outside of Detroit aren't Union. Politicians and the Unions can't control white collar jobs. I should mention that the blue collar jobs disappeared, the white collar jobs are still present.

Politicians had a BIG deal in forcing higher pay which we realize now was unsustainable. For example, the UAW has mismanaged their pension plan. Their entire pension plan is a pay as you go.. meaning, workers are paying in and that money goes right out to pensioners. The UAW is barely holding on.. the higher ups are dragging them down forcing the working person to toe the line. Politicians want those votes.. Don't underestimate the power of the Union in Detroit.

!