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Devastating blow for America's motor city
Robert Mendick, Chief Reporter12.12.08
HENRY FORD will be turning in his grave. A little over a century after the industrialist and inventor set up his motor car company in Detroit, the city that was once a global powerhouse is on the verge of economic collapse.
The refusal of the US Senate last night to agree on a motor industry bailout leaves Chrysler and General Motors, also with headquarters in Detroit, on the brink of bankruptcy. Ford may not be far behind.
Henry Ford was the revolutionary thinker who transformed the way cars were made. He invented the modern assembly line, allowing him to make mass-produced cars cheaper than his rivals. In 1908, the first of the Model T Fords - the car that "put America on wheels" - rolled off the assembly line. Americans have been buying their cars en masse from Detroit since.
At the peak of their powers, Ford, GM and Chrysler dominated the world's motor industry. Collectively known as the Big Three, their global reach and influence was enormous, responsible for millions of jobs in Michigan - the state of which Detroit is the largest city - and around the world. GM, founded in Detroit in 1908, rose to become the biggest of them all and still employs around a quarter of a million people globally. GM owns such diverse - and famous - motoring names as Cadillac, Chevrolet and Pontiac in the US, as well as Vauxhall in the UK, Opel in Germany and Saab in Sweden.
It seems incredible that GM and Chrysler could now be facing bankruptcy. Except that their decline has been well plotted and their sorry demise a symptom of the companies' failure to adapt to a changing world and an inability to control costs. The rot set in during the Seventies when oil prices rocketed. The US manufacturers continued to make huge, unattractive gas guzzlers while its rivals in Japan were making innovative, cheaper and more reliable cars that began to sell by the bucket load. By last year, Toyota, now well established as the world's largest car manufacturer, was even outselling Ford in the US, a concept unthinkable even a few years ago.
The prospect of bankruptcy for the Big Three can only be devastating for Detroit, the city that gave us Motown music - a contraction of motor and town. Its citizens will be waking up today to the realisation that their way of living could be wiped out by the collapse of the bailout plan.
The Detroit Free Press lamented today: "Michigan knows the pain of hard times in the auto industry: the related businesses that go under, the stores and restaurants that die, the families who... leave the state."
