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The New Detroit Era

Page 6

By Sandy Baruah

SandyAgainstCarFor the past few years, the North American International Auto Show has flashed a spotlight on Detroit for a global audience. In years past, there has been an underlying question: Is Detroit’s and its automotive industry’s recovery for real?

That’s not the case this year. The Big Three are thriving and North American vehicle production is exceeding prerecession levels. The city of Detroit is emerging from bankruptcy quicker and more successfully than anyone expected. The Detroit region is poised to lead the nation in connected vehicle technology. It seems a new Detroit era has begun.

While the NAIAS should celebrate this fact, the parallels between the bankruptcies of Detroit and two of its iconic automakers cannot be lost. As the recent success of the automotive companies proved, bankruptcy is a tool to right the fiscal ship, rather than the end goal. Emerging from bankruptcy alone was not enough to address the industry’s challenges, just like it will not serve as the silver bullet for the city.

The near collapse of the domestic automotive industry acted as a galvanizing event across the entire industry supply chain. Jobs were lost and bottom lines decimated as the future of the industry hung in jeopardy. That collective trauma imposed a narrative on the industry’s psyche: Business as usual was not going to cut it, change was a prerequisite for survival.

That collective experience made an impact and created urgency. Emerging from bankruptcy, automotive leadership stripped down the industry to its very essence: creating the highest quality vehicles. They did so with the recognition that their companies needed to be nimble and that cultures needed to change. The output was world-class vehicles, manufactured by leaner, more efficient companies, which are now attracting customers to showrooms based on quality, design and innovation – not discounts.

The city, by way of its bankruptcy, has the opportunity to also refocus on its core function: delivering basic services with a quality that meets the needs of residents and businesses. Doing so will grow the population and re-energize the city – and will require a very similar long-term culture change. The output of the city’s bankruptcy will have to mirror that of the auto companies and provide residents the best possible municipal product. It will also have to lead to a sustainable structure that can meet the unknown challenges of years ahead.

The good news is that the city is well on its way to making the changes needed to capitalize on the opportunity presented by bankruptcy. The city of Detroit benefits from the unprecedented political cohesion between state and city leaders that helped broker the Grand Bargain and kept the bankruptcy process moving with surprising speed. The city now has a clear path to long-term fiscal stability. Currently, Mayor Mike Duggan’s team is working feverishly around the clock, adhering to a results-oriented focus. Things are changing for the better – reduced blight, increased lighting and safer streets.

Now it is time to ensure that the progress made under bankruptcy continues. As NAIAS brings additional buzz to the Motor City, it is time to celebrate the new Detroit era.

Sandy K. Baruah is the president and CEO of the Detroit Regional Chamber.