Detroit Automakers: City's Bankruptcy Won't Affect Our Operations

Today, Detroit became the largest municipality in U.S. history to file for bankruptcy. The move came as the city faces $18 billion in debt. The Detroit News reports the city reached a deal with some creditors that gives Detroit $11 million a month in casino tax revenue to run essential city services during the bankruptcy proceedings. Those services are skeletal: Dial 911 in Detroit and the city’s police are likely to respond in 58 minutes on average, the newspaper said.

Detroit’s three automakers — GM, Chrysler and Ford — say the city’s bankruptcy won’t affect their operations.

“Chrysler Group believes in the city of Detroit and its people,” the automaker said in a statement. “We not only continue to invest in the city and its residents by adding to our presence in Detroit, we also are committed to playing a positive role in its revitalization. We do not anticipate any effect on our day-to-day operations.”

Ford, whose headquarters are in the Detroit suburb of Dearborn, followed: “We believe a strong Detroit is critical for a strong Michigan and our industry. The city has a difficult job ahead, and we are optimistic that governmental leaders will be successful in strengthening the community.”

GM, whose Renaissance Center headquarters mark a major piece of Detroit’s skyline, did not immediately respond for comment. But the automaker told the Detroit News that it didn’t expect the city’s filing to affect operations at its headquarters or assembly plants.

“GM is proud to call Detroit home and today’s bankruptcy declaration is a day that we and others hoped would not come,” GM told the newspaper. “We believe, however, that today also can mark a clean start for the city.”

Detroit’s woes are well-documented. Between 2000 and 2010, the city’s population declined 25% — from 951,270 to 713,777, according to U.S. Census data. In 2012, Detroit approved an advisory board partly appointed by the state of Michigan to oversee its overburdened financial contracts. In March 2013, Michigan officials appointed Chrysler bankruptcy lawyer Kevyn Orr as the city’s emergency operations manager. The same month, former Detroit mayor Kwame Kilpatrick was found guilty of racketeering, extortion and scores of other charges — two dozen in all.

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