Un-Merry Christmas: Detroit Is Running Out of Money, Thousands of Layoffs Imminent Next Month (video)
Posted By Vicki McClure Davidson on November 18, 2011
Decay of a once-great city: With more than 3 million square feet of abandoned, unpatrolled factory space, the Packard Plant in Detroit -- designed by the great architect Albert Kahn -- is perhaps the single most-photographed "ruin" in all of Detroit. Situated on more than 35 acres of land, the plant was notable not only for its titanic size, but, when it opened in 1903, as the site of the first use of reinforced concrete for industrial construction in Detroit. It was, when it began operations, the most advanced automobile plant in the world. This is what it looks like today. | Life magazine, February 2010
The once-great, once-prosperous city of Detroit has been in ruins for decades — it looks like it will be running out of money (again) in just a few weeks. Thousands of workers may be laid off soon after Thanksgiving.
This also means no People Mover, no government paychecks, no hopenchange for Detroit.
A very un-merry Christmas is in store for the citizens of the Motor City.
Reported by MLive, Gary Brown: Detroit could run out of cash in December, plan must include layoffs:
With Detroit Mayor Dave Bing preparing to explain the city’s fiscal crisis tonight in a rare televised address, Council President Pro Tem Gary Brown says the situation is even worse than anyone has let on.
Bing is expected to discuss a confidential Ernst & Young report obtained by the Detroit Free Press that suggests Detroit could run out of cash by April without steep cuts to staff and public services.
That’s a grim prognosis, but according to Brown, the city actually could be unable to make payroll “as early as December.”
“I know the report says April, but there are certain risk assumptions that when you take those into consideration, worst case scenario you could run out (of cash) in December,” Brown said this morning on WJR-AM 760.
In his speech tonight, Bing is expected to propose privatizing the city’s public bus system and lighting departments, both of which have have been failing residents but reportedly cost them $100 million a year in subsidies.
Brown supports that long-term plan, but he is hoping the mayor will couple it with a short-term strategy to lay off up to 2,300 city workers if unions fail to agree to long-discussed concessions.
If Bing doesn’t, City Council will.
This was reported in late October by Crain’s Detroit Business — People Mover will stop moving in December unless it finds funds:
The Detroit People Mover will cease operations in December — a month before the North American International Auto Show at Cobo Center, which generates a lot of the system’s ridership — unless new funding can be found or restored to pay for the system’s operations.
Gerald Poisson, Oakland County’s chief deputy executive, sits on the People Mover board of directors and said the system’s managers told him that it wouldn’t have enough funds to operate by the end of the year.
“That’s what they told us,” he said.
Management is scrambling to find funding quickly.
“We’re still working to pursue our options. It’s our hope that the current funding scenario can be resolved in a few weeks,” said Ericka Alexander, marketing specialist for the Detroit Transportation Co., which operates the system as a public corporate body rather than a city department. “It’s not like we will be open one day and closed the next without notice.”
The People Mover’s annual budget is $12 million but is facing a funding crisis fueled by Detroit’s cutbacks.
In July the Detroit City Council slashed the system’s $4.4 million annual subsidy by $1 million, leaving the People Mover without enough cash to meet the matching-funds requirement for its $2.6 million in annual transit funding.
Alexander said the system has been trimming expenses, reducing staff to 77 from 84 at the start of the year.
To raise money, the system will raise its fares to 75 cents from 50 cents next month.
“We’re hoping that patrons will stick with us,” Alexander said, adding that it’s also hoped that the influx of new downtown employees will offset any ridership lost by the fare increase.
City Council President Charles Pugh defended the subsidy cut but also said he didn’t think shutting it down was a practical option.
“Right now, if we were to restore that $1 million, that means we would have to get that $1 million from somewhere else — snow removal, grass cutting, police, fire, EMS, our recreation department,” he said. “We had to cut everybody. We had to cut the police, we had to cut fire.”
He said he will suggest that Mayor Dave Bing seek emergency funding from the U.S. Department of Transportation.
Video encore… previously posted video produced in 2009 by Steven Crowder about Detroit’s mounting economic problems.
This is a grim, eye-opening video that offers historical evidence and explanations as to why Detroit, a city that once was so vibrant, is struggling and stagnating much more now than other major US cities.
Detroit in RUINS! (Crowder goes Ghetto) | December 21, 2009
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