Detroit's Issues Have Statewide Implications

July 5, 2005
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What makes a world-class city? The best hints come from the visitors and convention guests — if they're asked. Crain's Detroit Business bravely did such a thing in June, after the national conference of business editors and publishers in the Alliance of Area Business Publications departed the MotorCity. Those candid assessments offer this community some insight, but it is also important to understand that what is reflected in Detroit casts a perception on the rest of Michigan, and that city's struggle has shore-to-shore implications.

The Federal Deposit Insurance Corp.'s most recent economic assessment of the state of Michigan was not rosy. FDIC noted Michigan had the highest unemployment rate in the country; that it was the only state to have year-over-year job losses in the first quarter of 2005; that continued job losses in auto and auto parts manufacturing outpaced smaller employment gains; that additional job losses have already been announced by Steelcase, Electrolux and General Motors; and that Michigan posted the lowest year-over-year personal income growth in the country during every quarter of 2004. FDIC commented, "Weakness in the auto industry, as evidenced by the recent downgrade of GM and Ford debt to below investment grade status, may dampen other areas of the state's economy as the automakers cut expenses in such things as advertising, health care, supplies and services."

But the agency also noted: Grand Rapids-Wyoming, Muskegon-NortonShores, and Battle Creek were the only metro areas in Michigan that posted year-over-year job growth of more than 1 percent in first quarter 2005. The concern is that it may be short-lived with anticipated regional layoffs.

What has this to do with editors and publishers who commented on Detroit? To a person, the journalists from Los Angeles to Charleston were "hopeful" that Detroit is a city with a glass half-full, ready to rebound. They were surprised by the friendliness of Detroiters, and equally surprised that businesses in the downtown were closed on a Friday or Saturday night and incredulous that shops in the Renaissance Center also closed on Saturdays; that there is no "place" to hear or dance to the city's famous Motown sound; that there is no concentrated entertainment district, no urban housing renaissance. The publisher of Charleston Regional Business Journal stated in Crain's this week, "The city needs to put a full-court press on getting people to live downtown again."

In fact, every concern for "Super Bowl" city would have drawn an opposite opinion in Grand Rapids. Urban housing options (deemed to be a central issue by those visiting editors and publishers), entertainment districts, better weekend shopping options (though still too few) — all are apparent in Michigan's second largest city. And so, too, in Grand Haven, Muskegon and Rockford.

Continued growth in this metro area may indeed bring "favored" status in the future, and though airline connections continue to be an issue, Grand Rapids is a growing city — while Detroit is losing population (the most of any U.S. city). As a growing city, Grand Rapids may indeed become Michigan's largest.

Paying heed to the FDIC report, however, the ripple effect from Detroit's Big Three will reach this area, which is already working through solutions to the continued manufacturing downsizing. Such is a call to arms for continued critical and creative thinking and refusal to rest on the metro area's laurels. 

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