Page last updated at 05:40 GMT, Saturday, 13 December 2008

US city of cars feels global chill

By Matthew Price
BBC News, Detroit

Detroit street with GM headquarters in the background
For many in Detroit, the streets are no longer paved with gold

When you drive round Detroit there are reminders everywhere. Reminders of the city's vibrant past, and of its relentless and sometimes seemingly terminal decline.

They come in the sound of the engines passing you on the streets. The Chevy cruising by. Or the gas guzzling Cadillac. Or just a large Ford, with the deep growl of its motor.

Stop at the huge General Motors HQ and you can visit a museum to Detroit's heritage.

Inside, old vintage models gleam proudly, their chrome bumpers reflecting your smitten gaze right back at you. A 1955 Buick Century, white with a bright red roof. A 1962 Chevrolet Bel Air. Think Route 66 and all that.

Three deadly letters

Opposite those models though linger the newer cars. The 2009 crowd. Proudly - or perhaps not - displaying the three letters which have helped destroy the motor industry here.

M. P. G.

Just 14 miles per gallon in the city on many models - and an astonishingly low 20 on the motorway.

Bumper sticker on Chevrolet in Detroit
Detroit's Big Three have been losing out to foreign competition
For years Detroit's big car makers have resisted calls to improve fuel consumption. They felt the market didn't want that. They were wrong, to their cost, and now to the entire country's.

Just down the road, in the city once endearingly called Motor Town - or Motown - is the Motown Diner. It's pretty gloomy these days - and not just because of the snow and ice outside.

They make a warming chicken noodle soup though, and in-between mouthfuls you realize you don't need to find a car worker here to tap into the breadth of discontent.

"Everybody makes complaints," the manager Bona says. "No money, no job."

In the corner, the local television station breaks into the afternoon soap opera to bring a live press conference from the governor of Michigan.

Jennifer Granholm says the car industry "has been extended a lifeline" thanks to George W Bush.

The president stepped in at the last minute, after the Senate failed to ratify a bill that would have secured emergency funding for the car makers. Without his pledge not to allow the companies to fail, Detroit would have been finished.

Interconnected

The customers stopped eating, and listened intently to the governor. Two smartly dressed business-women stood and watched as they got ready to leave.

Unsold Chrysler cars
Too many US-made cars are chasing too few buyers
One, Shan Norman, said Detroit feels abandoned by Washington.

"My business isn't directly tied into the automotive industry, but my clients in some form or shape receive their income from the auto industry. I'm a little concerned as a small business owner."

What does she do? "I'm a graphic artist." Even an artist is not immune to Detroit's problems? "Absolutely, absolutely. Understand that in this city we're all interconnected, sure, it's going to affect my income."

The Big Three's critics say they have themselves to blame, that by refusing to produce more fuel efficient cars for instance they eroded their own sales base.

Others however point out that they had been in the process of changing their business models just as the credit crisis hit and rendered restructuring impossible.

Global dimension

That is why many - including local car journalist Peter di Lorenzo - believe there must be significant investment in the industry.

US flag at GM headquarters in Detroit
The Big Three are a key part of US life - but for how much longer?
"It's absolutely essential that the investment is made now because I think the American companies are on the precipice of coming back and being technically advanced and offering fuel efficient vehicles. I think it would be beneficial to the country that they get this money and go forward."

Here they know that any money they get now will simply help keep them going until Barack Obama takes over the presidency.

He supports the funding, and also a longer-term (government supervised) overhaul of the industry. The US is living through not just economic change - but a seismic cultural and political one as well.

"I think the global economy has forced the United States to be more realistic," says Mr di Lorenzo.

"The free market ideals are still there, but the realities and the pressures of the global market are forcing the government to act when they in the past wouldn't have."

Back at the General Motors museum though, surrounded by the gleaming celebration of a bygone era, it's abundantly clear that government help alone may not be enough in the long run.

The Detroit Three had it easy when they were the only players in town. Globalisation has changed all that.



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