Will they be passing the hat around for the city?  http://en.wikipedia.org/wiki/Detroit_bankruptcy  !!!!

Oy, yeah, as one of my Detroit-area friends posted, there's no where to go but up now!  Maker Faire: Detroit is actually at The Henry Ford Museum in Dearborn, MI, which I think has been doing alright as Ford hasn't faltered as much as the other auto makers.  There are parts of Detroit though that I've driven though which shocked me as to just how depressed they were.  A couple of friends from my hackerspace produced this video about Detroit that I think presents evidence that there is reason to think it will rebound eventually:

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"ReMade" screened at Maker Faire Detroit RE: BeagleBone Black workshop at Maker Faire: Detroit next weekend!

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I'll be interested to hear what Southeast Michigan (e.g. Detroit area) residents interested1 and jkridner think about the situation.

cheers,

drew

Aye, encouraging video (although it won't display on E14 for me, but fine on Vimeo).

I wonder why the traditional Detroit auto makers can't change their game.  You'd think that any young automotive engineer would be delighted to design a new low cost range to rival anything from Europe or the far east.

Morgaine Dinova wrote:

 

I wonder why the traditional Detroit auto makers can't change their game.  You'd think that any young automotive engineer would be delighted to design a new low cost range to rival anything from Europe or the far east.

USA profit margins on small, low-cost cars are very small.  Profit margins on large cars, and especially small trucks and SUVs, are huge.  Detroit doesn't want to cannibalize SUV and truck sales by selling small, efficient cars.  As long as USA petrol prices stay low Detroit doesn't have to change its ways.

I doubt young automotive engineers have any say in what is made in Detroit.

I don't follow that.  Isn't it accepted that Detroit is dying because its auto industry is dying?  The bankruptcy of the city is mostly fallout from that, I thought.  If so then it seems likely that sales are on a downward trend even if USA petrol prices remain low, and if that's true then I don't see how Detroit doesn't have to change its ways.

A lot of if's there of course.  Either one or more of these premises must be wrong or else Detroit does have to change its ways or they'll fade into nothingness.

Morgaine Dinova wrote:

 

I don't follow that.  Isn't it accepted that Detroit is dying because its auto industry is dying?  The bankruptcy of the city is mostly fallout from that, I thought.  If so then it seems likely that sales are on a downward trend even if USA petrol prices remain low, and if that's true then I don't see how Detroit doesn't have to change its ways.

 

A lot of if's there of course.  Either one or more of these premises must be wrong or else Detroit does have to change its ways or they'll fade into nothingness.

I haven't seen a good analysis of how Detroit got itself into its mess.  Articles say that this has been a long time coming, but don't go into details.  Anti-union publications blame the unions, especially the unions that represent public workers.  But I tend to give those articles the same credence I give things I read on the Internet.

The main fact is probably that it takes far fewer humans to build a car than it used to.  However, I think a lot of it is car executive attitude.  According to what I've read, in the early days of GM when Sloan and Kettering were running it they were very conscious of the fact that if they paid their workers too little -- and all companies followed suit -- then nobody except the rich would be able to buy their cars, and there are simply not enough rich people to keep large auto makers afloat.  Sloan/Kettering also liked to make sure that when they made changes, the changes should always increase the number of employees so that there would be more customers for GM products.

This all changed with Roger Smith, at least according to Michael Moore's Roger & Me.  The idea became to save costs and put the money into executive salaries and bonuses.  Let other companies' employees buy GM cars.  Unfortunately, this attitude happened all across USA companies.  One of the main culprits IMO was Ronald Reagan's successful push to cut taxes for the rich -- supported by the now-discredited "trickle down [on] theory".  Between FDR and Ford (inclusive), the marginal tax rates on outrageous incomes were very high, so there wasn't any point in cutting worker salaries so you could enrich the executives.  When Reagan lowered taxes on the rich, that all changed.

There's also a story about health care costs, one of the big problems now facing Detroit and large auto-makers.  The story I read is that there was a particularly good labor negotiator who got extremely good health care benefits for GM workers by threatening to strike at a time when GM sales were very strong.  After the contract was settled, he suggested that they go to Washington together and lobby for national health care, like you have in properly developed countries.  The GM leader declined: "we can afford the benefits, and I don't want to get involved with socialized medicine" (paraphrased).

When times were good, a lot of state and local governments had to compete with strong private hiring to get good workers.  Many offered generous pensions and health care, without really worrying about how to pay for them long term.  Detroit is only a very large example of something that's happening all over the USA.  A big problem with this is that the Fed is propping up the economy by reducing interest rates to near zero.  This has caused many bond-based investments to go sour, including many pension funds.

I read today that a big problem with Detroit is "deadbeat banks".  Banks that have foreclosed on properties are supposed to pay property taxes, but some of the banks are ignoring this -- according to what I read.   Also, they're evicting people from their houses but then halting the foreclosure process to save money so that evicted people don't realize they're still stuck with the property tax bill.  This helps keep bank salaries and bonuses high -- and hurts Detroit's revenue.

Ouch, that's a lot of problems you've described there.  It summarizes quite well as the corporate quest for growth and profit being unsustainable when it doesn't plough wealth back into society.  You can only till and harvest the soil for so long before it becomes depleted, and the same is true of society.  Alas the corporate ethos in USA is to maximize corporate profit at all costs and society will take care of itself --- aka. "and magic will happen".  Unfortunately reality refuses to work that way.  Instead of magic happening, the society that is supposed to be the source of profits unravels and slowly breaks apart.

For some reason, CEOs seem unable to understand the dependency between their profits and society's wellbeing.

UPDATE - you can signup for the listed training times at:

http://www.element14.com/community/groups/maker-faire/blog/2013/07/23/maker-faire-detroit--beaglebone-black-training-times

by tweeting #learnwithboris to @element14 to register for one of the timeslots (or contact me if you don't tweet).

You can also enter to win 1 of 4 BeagleBone Blacks at the element14 booth.

thanks,

drew