Looking out for Detroit
Detroit is not alone, although most in that city may feel that way. There are many
cities that have borne the challenge of how to transform to the next
generation when nothing seems to go right. Detroit is an extreme
example, as evident by the estimated 78,000 abandoned properties.
Pittsburgh was in a similar situation beginning in the 1960s and we’re still feeling
the effects. We were the Kings of Steel. But remove the proliferation of
skyscrapers (the WTC was built with Pittsburgh Steel), cut back on
national defense products (tanks, armor) and introduce higher gas prices
(leading to fiberglass and lighter cars) and you have the beginning of a
massive decline. For 4 decades, Allegheny County led the nation in
exporting our youth and we’re only seeing a reversal of that now. What’s
driving our transformation is education, healthcare, technology, natural
resources and robotics – but not steel.
Detroit tried to hold on to the automobile industry, but every industry has a
shelf-life. There are no answers for today, no plans on how to tackle
the $19 billion debt, no visions to rebuild the city once known as the
‘Paris of the West’. And while there is plenty of blame to go around,
what is needed now is assistance from those that can make a difference.
Detroit will rebound, and when it does, as was the case with Pittsburgh, it will be a
stronger city with more potential than can be imagined today. Detroit
and Pittsburgh have a long relationship and together established the
automobile industry and a way of life. But the foundation of Detroit –
as with Pittsburgh or any of the other ‘Rust Belt’ cities that were left
for dead – is not industry, it’s people.
We wish them the best in these times of trouble. Stay strong.
Mark Schuster, Partner
July 25, 2013