New Hope and Old Woes as Detroit Exits Bankruptcy

  • After the largest municipal bankruptcy in U.S. history, Detroit hopes outsiders see its potential and not its history of racial conflict, financial crisis and dramatic population loss.
  • The city, founded as a small French fort on the Detroit River that grew to be a hub of the global auto industry, emerged from bankruptcy last month after shedding almost $7 billion of its roughly $18 billion debt.
  • Under the bankruptcy provisions, city workers made concessions and the healthcare coverage of pensioners was reduced
  • But the pensions themselves remained largely intact.
  • In a boost to remaining civic pride, the Detroit Institute of Arts’ famous collection, with paintings by Vincent van Gogh and Brueghel, remained intact thanks to donations by foundations and private individuals.
  • Detroit’s housing stock, mostly built during the first half of the 20th century, continues to melt away under the pressure of de-population.
  • The outward migration has left thousands of houses vacant and open to vandals and “scrappers”, who tear out the plumbing and electrical wiring and sell it.
  • The city’s public transit system, despite the construction of the new rail line, is generally considered one of the worst of any major city in the United States.
  • Detroit’s well-deserved reputation for violence hasn’t been curbed.