Magic Time

Can Magic Johnson and Dozens of other venture capitalists seed and mentor enough entrepreneurs to fill downtown Detroit?


Published:

(page 1 of 7)

 Detroit was the Silicon Valley of its day. The automotive, aviation, film, and medical industries complemented a landscape rich with engineers, scientists, inventors, and researchers. There seemingly was nothing the city couldn’t manufacture on a global scale.

Prior to V-E Day, Detroit produced more cars, planes, parts, machinery, film, and drugs than any other place on the planet. But in the summer of 1945, with the official end of World War II, the city’s mercurial growth streak succumbed to the economic laws of supply and demand.

Detroit, the “Arsenal of Democracy,” was left with too many factories, too many workers, and not enough jobs. Compounding the problem was the fact that the plants that had generated hundreds of thousands of planes, tanks, trucks, weapons, and ammunition occupied large swaths of land within residential neighborhoods. During the war, smart urban planning had taken a backseat to arming soldiers on the front line.   

After the war ended, Ford Motor Co., the world’s largest producer of aircraft, quickly withdrew from the aviation sector. The automaker was nearly on life support, due to mismanagement — Henry Ford’s security chief, Harry Bennett, was effectively running the company, while the patriarch’s grandson, Henry Ford II, had yet to prove he could assemble a team to realign the conglomerate’s prodigious manufacturing operations to the production of cars and trucks.

General Motors, Chrysler, Packard, and the other automakers quickly followed suit. The aviation industry soon consolidated on the West Coast. The pattern was repeated with the film industry (automakers no longer sought to create their own commercials) and drug manufacturers (bigger players took over). Parke Davis in Detroit, which developed the modern medical laboratory and produced millions of pills and medications, was eventually folded into Pfizer Inc.  

In hindsight, the city and region should have done more to maintain economic diversity, but demand for consumer goods didn’t perk up until the 1950s. As time went on, rising family wealth, combined with racial tensions exaggerated by real estate agents, saw the great migration of Detroit residents to the suburbs. Left behind were empty factories, empty homes, empty stores, and a fairly unskilled workforce. Some say Detroit went from 1.0 to 0.0.

Edit Module
Edit Module Edit Module
Edit ModuleShow Tags

Related Articles

Roll 'Em

The film industry in metro Detroit, which is very much alive despite the end of sizeable state incentives that were designed to attract top-flight actors and directors, can draw big-budget production companies like Disney and Warner Bros. by building up a creative infrastructure.

Q&A: Chris Thomas

Chris Thomas is a co-founder of Fontinalis Partners, a venture capital firm in downtown Detroit focused exclusively on investing in technology companies that improve next-generation mobility.

Line of Flight

A longer runway at Cherry Capital Airport in Traverse City, new golf courses and wineries, upgraded resorts, and revamped marketing campaigns are attracting more tourism in northern Michigan.

Integrating Circuits

Not since Detroit absorbed California hot-rod culture have the Motor City and the Golden State embraced each other so tight. The quest to perfect self-driving cars and find innovative mobility solutions made it happen. Is this the biggest story in American business?

2018 Champions of the New Economy

For the ninth straight year, DBusiness has selected five regional executives who are driving growth in the technology sector.
Edit ModuleShow Tags

Most Popular

  1. Birmingham’s Ford-Peabody Mansion to House Japanese-inspired Restaurant
    Adachi, a Japanese-inspired restaurant, is slated to open for dinner in the restored Ford...
  2. West Bloomfield Township’s Planterra Conservatory to Expand
    Planterra Conservancy in West Bloomfield Township today announced construction plans have been...
  3. Report: Detroit’s Home Prices Have Second-highest Growth in U.S., Grand Rapids Homes Sell the Quickest
    Metro Detroit home prices have increased by 15 percent year-over-year in July, the second highest...
  4. Massive $510M Dairy Campus to Open in 2020 North of Lansing
    Glanbia plc, a global nutrition group with a presence in 32 countries; Select Milk Producers...
  5. Bloomfield Hills’ O’Keefe Announces New Managing Director, Director
    O’Keefe, a Bloomfield Hills-based financial and strategic advisory firm, has announced Violeta...
  6. Annual Fash Bash to be Held on August 16 at the Detroit Institute of Arts
    The Founders Junior Council, the young professionals’ auxiliary of the Detroit Institute of...