PATCHWORK NATION -- July 22, 2010 at 2:02 PM ET
A Tough Road Ahead for Detroit, Other Industrial Metropolises
Detroit skyline. Photo by Spencer Platt/Getty Images
DETROIT | It's long been said that when the U.S. economy gets a cold, this city, with its reliance on the auto industry, gets pneumonia.
The last few years have raised the question of what happens here when the economy at large gets pneumonia -- or at least walking pneumonia. The answer: it's not pretty. This city and the surrounding area are hurting badly.
Wayne County, which holds Detroit, is termed an Industrial Metropolis in Patchwork Nation and, on the whole, those places have taken a beating in the recession. They currently have the highest foreclosure rate out of our 12 county types, 2.31 per 1,000 homes, and they have an unemployment rate of 10 percent.
But Wayne County has had an especially hard time. One out of every 142 homes is in some state of foreclosure and the unemployment rate is north of 15 percent. And listen to the radio or talk to the locals and you quickly see the troubles here run much deeper than even those numbers suggest.
People here sense the world has changed and they are not sure how this place will fit into where the economy is going.
What Everyone Is Talking About
On a Saturday night sitting at a rooftop bar overlooking Woodward Avenue, Detroit's main thoroughfare, one local explained the problems in very personal terms. He bought a riverfront condominium in the city in the mid 1990s for just under $100,000. A good friend of Patchwork Nation and life-long area resident, he talked of how it seemed like a good investment at the time and when he refinanced a few years later it appraised at $124,000.
But it has been on the market now for four years and he has marked it down to the fire sale price of $19,500. There's not a number missing there -- he's trying to sell it for less than what many cars cost. And even if he gets a buyer, his mortgage holder is going to have to approve of a short sale, or one that falls short of the balance of the mortgage loan.
His wife got a new job across the country and while he has never talked seriously about leaving metro Detroit, it now seems inevitable.
The problems in the area don't stop at the Detroit city line. Suburbs more than 15 miles from the city center are full of strip malls that were once full of bustling stores but now sit empty -- victims of overbuilding combined with the economic crash.
And on a Canadian radio station (you can listen to a lot of Canadian radio here), CKUE 95.1, the morning rock-and-roll DJs on Tuesday morning wound up getting into a serious discussion of the decline of the manufacturing sector and what it means for all of southern Ontario, the area just across the river from Detroit. This was from a station that has a Web site featuring, among other things, a picture of a comely woman under a link to "Rock Babes" and gag bios for on-air personalities.
Life in the 21st Century
The conversation is a common one here. The manufacturing sector has been in decline for decades, but people in and around this city have always hoped for some kind of a turnaround. But now, after the government bailouts for the auto companies and the seemingly endless hard times, Detroit, at least as it currently exists, seems more a part of the past than a part of the future.
Visit the Ford Motor Co.'s massive Rouge Factory in nearby Dearborn and staffers point out the historical landmark plaque on the grounds -- it was built in 1917. Ford takes great pride in the fact that the plant has been refurbished and "greened" to be vital again. It now churns out F-150 pickup trucks.
And it is a wonder to see the Rouge in full swing and to look back at the pictures when it cranked out Jeeps and military planes in World War II.
But the Rouge itself is a sign of how much the world has changed. There are hundreds of robots on the assembly line now -- installing windshields, welding -- and fewer people, about 2,000 where there were once tens of thousands.
We call counties like Wayne the "Industrial Metropolis" in Patchwork Nation, and there is still manufacturing in those places, but much less than there once was. And scenes like the one at the Rouge show how even in good times how much will never be the same. The Industrial Metropolis name is more a memory of what these counties were than what they are now.
Many Industrial Metropolis counties have already left their industrial past behind. Philadelphia, for instance, has moved toward health care -- though there is still a massive urban core, vestiges of what the city once was, that needs serious help.
For Industrial Metros like Wayne County and Detroit, the next few years figure to be difficult, even after the recession, as the last strongholds of American manufacturing retool or, in worse cases, move. The downturn has hit these places very hard, but they face larger problems about an economy in transition. And those problems ripple far beyond the factory doors.