Detroit garnered headlines around the world in mid-July when it signed on for the largest municipal bankruptcy in the United States. The Chapter 9 bankruptcy application followed years of fiscal mismanagement, political shenanigans, rich labor contracts, and an entitlement mentality.
At least that’s what the vast majority of the international media would have us believe. Yes, there were race riots, mortgage redlining, poor urban planning, and, at times, a plodding U.S. auto industry to blame, but Detroit’s road to bankruptcy actually began 75 years ago. In 1938, the automakers and their suppliers started filling military contracts to help arm Britain, France, and other Allied nations against the emerging Axis powers.
A year later, Hitler invaded Poland, the Japanese bombed Pearl Harbor in December 1941, and America entered World War II. Unable to sell new cars, General Motors, Ford, Chrysler, Packard, and other OEMs retooled their factories to build tanks, trucks, weapons, airplanes, and amphibious vehicles. That’s why only a few 1942 model year cars are in existence today. And no cars were produced between 1943 and 1945.
GM led the way when it came to retooling, converting every inch of its vast manufacturing network (much of it in Detroit) to produce 850,000 trucks and amphibious vehicles, 2 million machine guns, 3 million carbines, 40 million cartridge cases, and 100 million artillery shells.
Ford, Chrysler, Studebaker, Hudson, and other manufacturers contributed similar armaments. As demand for military hardware increased, more and more factories were built in the Detroit neighborhoods where the workers lived. At the same time, the first freeways were being built to speed the delivery of war parts across the city and region.
When the war ended, Detroit started producing cars again, but it wasn’t an easy road. A number of factories were converted back to auto production facilities, but more than 50 percent of the manufacturing space built to support the war effort was left empty. The trouble is, many of those abandoned factories remain standing.
When the economy finally recovered, beginning in the 1950s, many Detroiters started leaving the city for the suburbs. Few people wanted to live next to, or near, a plant. And who would disagree?
The city’s aging collection of empty factories was compounded by a price war initiated by Henry Ford II in 1953, in a bid
to restore his grandfather’s company as the leading automaker. GM and Chrysler went toe-to-toe with Ford, but the remaining automakers found it difficult to compete.
The following year, Nash merged with Hudson and was renamed American Motors Corp. George Romney, who would become a three-time governor of Michigan, oversaw the operation. Following the Nash-Hudson merger, Packard acquired Studebaker (Packard ceased production in 1958, while Studebaker quit the market in 1966).
Despite all the various events that followed, the root cause of Detroit’s bankruptcy is the inability to find new uses for all of the factories built to support the war effort. No other city gave up more to save the country from certain tyranny. It’s time the private sector, working with government leaders, develops a Marshall Plan for Detroit to finally clean up what long ago served a useful purpose. db
bR.J. King
brjking@dbusiness.com
