Excitement over Detroit car show exposes Michigan troubles

“Car sales are soaring, carmakers are hiring thousands of workers, and memories of the recent bankruptcies of two of Detroit’s “big three” companies already seem like distant memories – even though fewer than four years have passed since the crisis. So it is a buoyant industry that is gathering at the Detroit motor show, which is scheduled to feature the unveiling of more than 50 new cars,” Jorn Madslien wrote in a BBC online article earlier this week. Madslien continued, “‘I think in Detroit you see things of an international nature that you don’t necessarily see at other shows,’ Mark Reuss, president of General Motors North America, tells BBC News. But with light trucks – both pick-ups and sports utility vehicles (SUVs) – remaining central to GM’s success, there will also be models on show that will be sold mainly in the US market, such as the upgraded Chevrolet Silverado and GMC Sierra models, according to Mr Reuss. Ford’s F-150, the best-selling vehicle in the US for decades, is set to be the chief rival… …But as 2013 gets under way, it is clear that the industry’s revival is not reflected by the economic health of the city that hosts the show.

For years, Detroit has been a depressed city in a recession-hit state Detroit has long been struggling to tackle a £327m budget deficit and it appears to be constantly on the verge of running out of cash.

The situation is so serious that the State of Michigan government is considering intervening by appointing an emergency manager to take charge of the city’s finances. Measures such as job cuts, pay cuts and changes to benefits for city employees are currently being pushed through to prevent this, as it is seen as a step only just short of bankruptcy,” the article continued. Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS

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