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Chrysler, Ford and General Motors have thrown their support behind Detroit after the automotive industry hub known as ‘Motor City’ filed the largest municipal bankruptcy case in US history.

Michigan Governor Rick Snyder last night authorised the city, which is more than US$18 billion ($19.6 billion) in debt, to file for Chapter 9 bankruptcy protection.

The city’s emergency manager, Kevyn Orr, said Detroit would be “unable to break the cycle of damaging cutbacks in municipal services and investments [without] significant restructuring of its debt”.

General Motors, which was forced into and emerged from Chapter 11 bankruptcy along with Chrysler in 2009, says it is hopeful Detroit can rebound and come back a stronger city.

“GM is proud to call Detroit home and today’s bankruptcy declaration is a day that we and others hoped would not come,” the car maker said in a statement.

“We believe, however, that today also can mark a clean start for the city.”

GM employs approximately 4000 people at its Detroit-Hamtramck assembly plant and Renaissance Centre in downtown Detroit, but says it does not expect the bankruptcy to impact its operations or future outlook.

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Chrysler, which employs close to 6000 people across the city, says it too is committed to standing by Detroit.

“We not only continue to invest in the city and its residents by adding to our presence in Detroit, we also are committed to playing a positive role in its revitalisation,” the car maker said in a statement.

Ford, which was founded in nearby Dearborn and has never been based in Detroit and avoided bankruptcy following the global financial crisis, is hopeful the restructuring can help re-energise the city.

“We believe a strong Detroit is critical for a strong Michigan and our industry,” Ford said in a statement.

“The city has a difficult job ahead, and we are optimistic that governmental leaders will be successful in strengthening the community.”

US census data reveals Detroit’s population has fallen seven per cent since 2010, and as of 2011 more than one third of the city’s residents were living in poverty.

  • Jfjskeb

    Illinois, Calif, Michigan, Nevada, NY, NJ, Maryland,…DC,…all bankrupt with HORRIBLE educ systems. WHAT is common to all states?

    All run by hippie bleeding heart Democrats.

    • guest

      you sir are a genius.

    • marc

      ..and Qld state govt is in debt 80 billion (same per cap as Detroit) by previous left leaning govt of 15 years. Some just don’t get it.

      • Matt

        Have you actually read news articles about this? The main problem is aged pension payments… The lack of a superannuation system, and lack of pension support in retirement like we have here, it all seems to fractured in the us, to many gov organisations and private company’s trying to providing retirement ‘benefits’, it’s inefficient, evidently. Please Marc realise we are a state, not a city, and I think the 80 billion dollar figure is bait misleading, I mean, it has to be considering the polices here want a 57,000k a year pay rise… Geddit

        • Sheldon

          Superannuation system in America is 401K. So, there is one. Detroit is bankrupt bec there was a time when avg salary was $74/ hr. plus generous retirement benefits not just for workers but their families as well, inclu health and educ.

          It all sounds good. But the business infrastructure cdnt support it anymore and had to cut corners with the PRODUCT – American cars started declining in quality and value – from being the BEST to being WORSE than Korean cars.

  • F1orce

    $19.6 bullion doesn’t seem too much for a entire city?

    I’m not surprised, the U.S. should learn more from Oz, remunerate the bottom & middle class equally. Too much economic inequality. Better distribution of wealth is important. But that’s not the way America is going.

    • Sumpguard

      Yes you’d think they might have learnt from the GFC but if they have they are very slow to react.

      I remember as a kid Detroit was the centre of the universe where automobiles were concerned. Even 15 years ago it was a symbol of wealth. How times have changed.

      • Sheldon

        Detroit put out the BEST cars. Cadillacs were ppreferred by Kings and Presidents over Mercedes Benzes. the best of anything was called “the Cadillac of…” (ie, lawn mowers, pens, refrigerators, tvs, etc) because Cadillac was superlative. then, rThe UAW – United Auto Workers – the most powerful union in the world started demanding outrageous salaries, bonuses, huge pensions and health pkgs, etc…. Suddenly, GM , Ford, and Chrysler were spending 80% of a car’s cost on labor and puttig in 20% worth of engineering. American cars started losing quality, reliability, desirability…the Cadillac Broughams of 1957 turned into laughable Cadillac Cimmarons and the iconic Ford mustang of 64 became a Ssangyong Mustang by 74. Detroit priced themselves out of the market – their workers killed the goose that laid the golden egg.

        • Sumpguard

          Yes very true. Sad isn’t it.

    • Karl Sass

      It’s a huge amount of debt for a city of that size IMO, smaller than Adelaide.
      I agree with you, some redistribution is not only necessary for a social standpoint, but an economic one as well.

      • Matt

        Lol but the Americans call that socialism, and that, is not allowed…. Because unadulterated capitalism has worked so well.

        • The Donald

          I have tried rich. I have tried poor. I like RICH better. :)

          Hooray for capitalism!!!

    • MisterZed

      The system you describe is socialism. America is a capitalist country.

    • Sheldon

      Sadly, it is Aus who is adopting Americas corporate culture of greed. Not the other way around. Aus is now also killing LOCAL jobs just so CEOs make 8 figure salaries EVERY YR. the gap between rich and poor in Aus will soon be widening, just like in America, unfortunately….unless DRASTIC CHANGES happen soon.

    • Matt

      20 billion is a lot for only 700,000 tax payers, 1.8 million people lived there in detroits peak, now 1.1 million tax payers have disappeared leaving a ratio of 1 tax payer for 2 retires, economically unsustainable, it’s we’re Japan and most of china are heading, will be interesting to see how they Handel it.

  • Azz

    They sell all essential service’s to private companies. What do they expect is going to happen?
    The yanks have bought this upon themselves with stupid policy. They believe that they are only in power to goven. Many states are trying to buy back utilities to regain some cash but are finding it tough with signed 99yr leases.
    Guess what’s starting to happen in Aus? That’s right, electricity sell off, water very soon.
    We’ll be following the leader in yrs to come :(

    • Matt

      Yeah, essential services should always stay in the people’s hands, and something profitable… Like say Queensland rail or Telstra, there should be legislation preventing the sale if its earning money for the country.

  • Doc

    America shot its own foot when it made China rich. Assuming there is a finite amount of money in circulation, if one ENTITY suddenly GAINS a lot of money, THIS money has to come from SOMEWHERE. Guess where all this wealth MIGRATED FROM? —The First World: USA, Aus, Europe, Japan….

    • Sheldon

      Or should we say, The Soon-to-be-Third World: USA, Aus, Europe, Japan…..? Just look, we are SENDING our jobs offshore and TAKING in their illegals. These countries get JOBS and they get to DUMP on us their UNEDUCATED, their SICK, their CRIMINALS with thr HELP of Australian bleeding heart hippies.

      I say these countries are SMART… And we are IDIOTS!

      • Matt

        Hmmm, I agree on the point the money has to come from somewhere doc, but, while it does come from somewhere, 3.5 billion people in only 3 country’s alone, ( Africa, china, India) are trying to move themselves to the standard we are now, yes, it takes trillions of dollars, sucking the global economy dry pretty much.

        Sheldon, I’m not gunna bother that’s wrong on so many levels. Don’t forget both our country’s (I think your the yank) are ripping apart some of the country’s where these people are trying to get out of.

        • Doc

          Correct, Matt. The Third World is industrialising. It is a cycle. Before the mid-1800s, the financial center of gravity was Paris, thrn London, then America got rich and built factories and world fin capital became NY, now it is Shanghai. Money is travelling EASTward. It cannot be stopped. Once Asia becomes THE first world after the demise of the CURRENT First World (Aus included unfort), it will be Africas turn to indistrialise while Asia drclines. The Asian Century has begun and the American Century is in its twilight.

  • Doc

    Rudd will borrow $100,000,000s more to build schools, hosps, roads, in PNG and foreign employ police, doctors and nurses to TAKE CARE of illegal immigs there.

    Meanwhile, he is CUTTING spending on Aust schools, hosps, jobs, etc. all to SATISFY maybe 20 asylum advocates. Hey , Greens – if you want to HELP these people, ADOPT them, spend for their educ and health. The REST OF AUST would like to look after FELLOW AUSSIES!!!! HOWARD 2013!!!!!

    • Brayden Cresswell

      Would you just shut up.

      • Doc

        Instead of shutting down intellectual discourse, as we do in a democracy, how about you DEFEND your argument? Australians are intelligent. I am sure if you can come up with a VALID REASON, people will support further foreign invasion a as you espouse. But asking people to “just shut up” is just typical hippie bleeding heart mentality. I would label you LIBERAL left winger but that would be an OXYMORON. Preventing intelligent DISCUSSION is NOT being liberal at all, is it? Cheers.

        • Matt

          How is the gonski plan cutting costs when it’s billions more? And you speak of intellectual discourse ? Wow complete hypocrite, grats your worse then golfmother. Intelligent discussion would tell you the world economy is in the tank, we have to cut back somewhere. There is more then enough middle class welfare to get rid of to bring our economy back into perspective, without creating false demand (fringe benefits tax anyone) along with baby bonuses, school kids bonus, family tax benefit A through 26Z. The list is endless, far more goes to you, me and your family and friends doc then the apparent ‘waste’ u speak of…. If you reply think of the current Detroit mess, vote buying waste from all political party’s that really need to move on and go the way of the Edsel.

          • Doc

            I never mentioned gonski. And i DO agree with most of what u r saying. U must confuse me with someone else.

        • Brayden Cresswell

          For starters this is a Car website if we were on letstalkpolitics.com im sure there will be many people who might want to argue the point with you. And I have to say I don’t enjoy looking through comments to see some dribble about politics slapped all over it its just plain annoying keep it in parliament.

          • Doc

            I see your point. Id rather discuss cars as well. However, THIS particular story is about Detroit going bankrupt due to bad politics – thr same politics thats hurting Aust workers, with the same hippie mentality. Try hard as we might, you cannot divorce politics feom the discussion. But i apprec you explaining instead of just telling me to shut up. Cheers.

    • Jfskkfneof

      Rudds plan is an EXPENSIVE failure. Asylum seekers that settle in PNG will eventually become PNG citizens – who are NOT BARRED in Aust. So, after SPENDING TONS OF $$$$$ on PNG, these boat people will STILL GET TO AUST as PNG citizens!!!! Duh!!!

      Kevin Dud is assuming the boat people WILL STAY in PNG. WHY? They have already used several countries as stepping stones to get to Aus. WHY STOP NOW????? A quick acquisition of PNG visa and they are in Aus.

      Just bring HOWARD BACK and fix this Labor mess once and for all!

  • Tone

    I just read the comments relating to this article. That’s two minutes of my life I’ll never get back.

    The stupid, it burns.

  • Brayden Cresswell

    Dunno how I’m bogan but what ever helps you sleep at night.

  • Brayden Cresswell

    good one.