A Letter From Detroit

By Guy Bird for Blueprint, Feb 2009

There’s not a city in the world more closely associated with the car, but ‘Motor City’ is fighting for its economic heart. Guy Bird went to the North American International Auto Show in Detroit to gauge the mood of an industry under siege

When it gets cold in Detroit you know about it. With Canada just across the Detroit River, it’s not unusual for deep snow and seriously sub-zero temperatures. But this January – visiting the annual the North American International Auto Show (NAIAS), better known as the ‘Detroit Auto Show’ – it’s way colder than usual, up to minus 20º C degrees on some nights.

Driving from the airport only three of the four-lane highway is recognisable and the other three are covered in compacted snow pinstriped by uneven black tarmac tracks. The traction available from the old school 4x4 Mercedes G-Wagen taking our press group downtown is reassuring and entirely appropriate for the conditions.

Like the carmakers, Detroit has had its fair share of ups and downs too. The city’s architecture reflects that from the Detroit Institute of Arts to the famous 8 Mile road

Unfortunately there’s less political traction available for the US’s ‘Big Three’ carmakers – Ford, General Motors and Chrysler. The latter two almost went bankrupt at the end of 2008 under the triple whammy of the global credit crunch (most car purchases are financed after all), sky-high fuel prices coupled with an all too often fuel-hungry product range plus ongoing massive historic healthcare and pension liabilities. And even as lower fuel prices have returned, available credit and customers confident enough to buy a ‘big-ticket’ item like a car haven’t.

GM alone is reportedly losing $33 million a month. Chrysler – taken on by private equity firm Cerberus in May 2007 after an unhappy marriage with Germany’s Daimler – is not much better off. Although the private equity firm has already started its ‘rightsizing’ – American speak for cutting model lines, plants, output and workers’ jobs to better reflect demand – its HQ is still the second biggest building in the US after the Pentagon and employs 5000 staff there alone.Both GM and Chrysler sought and secured low cost loans over the Christmas period equalling $17.4 billion from the US Treasury Department – after Congress voted against the bailout. Both firms must file detailed restructuring plans in February and show significant progress by March 31 or the loans could be recalled.

That will probably mean selling off some of their brands – Swedish carmaker Volvo is already ‘under review’ by Ford, huge 4x4 brand Hummer is up for sale by GM and experts believe Saab, Pontiac and Saturn could all follow – sold or if no buyer found, scrapped. Signs that the requisite ‘progress’ is being made were visible at the Detroit auto show though. The usual over the top motorshow marketing razzamatazz had been considerably toned down, and a new emphasis on environmental concerns, in particular vehicles featuring more fuel-efficient part (hybrid) or full-electric powertrains, was evident on almost all stands. The ‘Big Three’ all offered alternative power solutions, most notably the eye-catching Cadillac Converj concept car – designed by the Coventry, UK-based Simon Cox – but all makers were trumped by more distinctive cars from non-US makers that in many cases are available now or this year.

The poster boy for green private transport, the iconic petrol/electric hybrid Toyota Prius was unveiled in its third generation guise as was its new – and now very similar-looking – rival, the Honda Insight. Even emerging Chinese carmaker BYD Auto (Build Your Dreams) showed a full electric five-seater called the e6 that will launch in China in 2009 and in the US and Europe in 2011.

But the established US American brands and the annual Detroit auto event that promotes them aren’t history yet. There’s a pride and significance to the show and its location that is evident well beyond its heritage dating back to 1907 when a certain Ford Model T became the first car to be shown there. GM does have at least one potential ‘game-changing’ product: the ‘plug-in’ extended range Chevrolet Volt – that can run 40 miles on pure electric power and boost that range to at least 300 miles through a small onboard engine who’s sole use is to generate power to extend battery’s power for the electric motor. It will launch globally in 2010.

All of a sudden a large woman, not dressed for the elements, started dancing in the middle of the road to a car alarm siren’s ‘rhythm’, all the while laughing her head off. Part madness, part unyielding optimism, the more I think about it, maybe Detroit is a bit like her

Chrysler now owns a small electric vehicle company that it is drawing on for expertise and Ford has many hybrid and EV projects in the pipeline. Will they last long enough to realise them? It’s a tough call. One of the three could still go. Much of the car business works on six-year product cycles so cars due to launch this year will have been put in place way years before the recent dramatic economic downturn. Changing course will take more than a few months.

Like the carmakers, Detroit has had its fair share of ups and downs too. The city’s architecture reflects that acutely from the highs of the superb Detroit Institute of Arts building featuring a massive (and quietly subversive) mural by Diego Rivera commissioned by Ford in the 1930s to new developments around the Detroit Tigers’ baseball ground at Comerica Park opened in 2000.

The lows are equally compelling, with numerous burnt-out large private houses, massive deserted factories and decaying shop fronts still littering the area between downtown and the famous 8 Mile road revealing a city that has suffered major decline too. Driving back from a restaurant downtown late at night one vivid memory remains of Detroit. With snow falling hard and steam rising from the many road manhole covers, I saw and heard the flash and bleep of an incessant car alarm by the road. All of a sudden a car loaded with people parked up behind it and a large young woman, not dressed for the elements, got out and started dancing in the middle of the road to its harsh siren’s ‘rhythm’, all the while laughing her head off. Part madness, part unyielding optimism, the more I think about it, maybe Detroit is a bit like her.

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