Detroit’s bankruptcy filing is linked with problems that sent General Motors and Chrysler into their own bankruptcy reorganisations, GM CEO Dan Akerson has said.
“It’s simply a matter of macro-economics. The (auto) industry generally wasn’t doing well. Many jobs were lost as the result of the restructuring, including our own, and the tax base in large measure evaporated.” he said in an interview with USA Today.
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The city’s filing has no immediate impact on automakers “from a financial perspective,” Akerson added, but the stigma could make it harder to attract talent.
“Certainly [it] is something that future prospects will factor into their thinking: ‘Do I want to move to a city that’s bankrupt?’ he said.
Akerson, who took over as GM CEO in 2010, lamented the city’s slide into insolvency and the auto industry’s contribution to the decades of Detroit decline.
“If you go back to the early ’60s, Detroit was the Silicon Valley of America. If you were an engineer, you wanted to be in Detroit,” Akerson said.
But starting in the 1970s and accelerating into the 1980s, the US auto industry that underpinned the [Detroit] area’s economy “had a lot of foreign competition and didn’t react particularly well to it,” he said.
“What that meant for the city was fewer jobs. People moved out and kind of repotted themselves and essentially the tax base dried up.”
