Detriot: Decline and fall of the Motor City

In the middle decades of 'The American Century', Detroit – the Motor City – was a powerhouse of the American Dream, spewing out rocket-finned Cadillacs as if there were no tomorrow. But, tomorrow came and America rejected the axiom of excess that had been embodied in the gas-guzzlers. Detroit lost business to Japan, workers lost their jobs and, in July 2013, the city finally filed for bankruptcy.

A century earlier, Ford had begun mass-producing the Model T at its Highland Park plant in northern Detroit, a sprawling 120-acre (49ha) complex that was the largest manufacturing facility in the world when it opened in 1910. It was designed by architect Albert Kahn to accommodate the world's first car assembly line, which in 1913 cut production time for the Model T from 12 hours to about 90 minutes, halving the vehicle's sticker price and boosting sales.

Although the plant is registered as a Michigan Historic Site, its boarded-up facade is succumbing slowly to the effects of climbing plants, water penetration and concrete cancer. Nevertheless, it is well preserved compared with the dilapidated Packard Automotive Plant (also designed by Kahn), an icon of urban collapse frequented by graffiti artists, drug addicts and the occasional photographer.

When these plants echoed with the crack of the rivet gun and the crunch of the metal press, the progress of America's car industry must have seemed unstoppable. From April 1960, when Tamla Records became Motown Record Corporation (honouring the 'motor town' nickname of its home city), Detroit also reverberated to the sounds of the Four Tops, Stevie Wonder and the Jackson 5, clocking up more than 100 Top Ten hits in its first decade. Detroit was where it was at. So what happened?

Motor city blues

Located in the Great Lakes region on the border with Canada, Detroit is arguably not the obvious place to launch a motor manufacturing industry. Although Michigan was once rich with natural resources, such as timber, copper and iron, by the time the motor car came to town these had been depleted.

The profits from these early industries were available for reinvestment just when two Michigan residents, Ransom Olds and Henry Ford, needed seed capital for their fledgling automobile companies. Although Ford is widely credited with the invention of the assembly line, the concept was patented by Olds and used in his own car factory in 1901. But it was Ford who perfected the line by incorporating driven conveyor belts.

Ford himself began experimenting with motorised vehicles in 1892 in a one-storey brick structure in downtown Detroit on the site of what is now the Michigan Building. According to a plaque on the building (which once housed the ostentatious Michigan Theatre and is now a parking garage), Ford's "two-cylinder machine, mounted in a light frame geared to bicycle wheels" marked the beginning of the Ford Motor Company, "which played a major part in the automobile industry that changed the face of Michigan and the world".

The assembly line and the mass-produced Model T itself were what we'd call today disruptive technologies, or disruptive innovations, because of their role in creating new products and markets while displacing an earlier technology. The so-called Tin Lizzies may well have disrupted a few horses, but the techniques that produced them were soon adopted by a plethora of industries.

Apart from its own disruptions, caused by wartime and the Great Depression, Detroit grew as a centre of excellence for car production from its formative days until at least the 1950s. In 1929, for example, GM, Ford and Chrysler accounted for three-quarters of US car sales, understandably earning the collective nickname 'Big Three'.

As for the global market, according to figures from the International Organization of Motor Vehicle Manufacturers (OICA), the US produced nearly three-quarters of the 10 million worldwide vehicle sales by 1950. By comparison, for 2013, OICA figures show China in first place with 22 million sales, ahead of America's 11 million, Japan's 10 million and Germany's six million. So, although the US is making 40 per cent more vehicles now than in 1950, its global market share has dropped by around 60 per cent.

This has had a significant and palpable effect on Detroit. So much so that, in 2009, two of the Big Three, GM and Chrysler, declared themselves bankrupt despite receiving government bail-outs.

An empire collapses

Received wisdom has it that the western car industry failed because of an influx of cheaper, more reliable vehicles from Japan. Indeed, the fall of Detroit from its iconic status as the Motor City is considered an allegory for the general decline in western motor manufacturing. However, the truth was far more complicated.

According to Kevin Boyle, professor of history at Northwestern University, Illinois, the international element was certainly a part of the mix. "American auto makers were highly successful into the early 1970s," he confirms, "dominating the domestic auto market, producing huge numbers of cars, turning massive profits. But they'd put together a mix of products that couldn't withstand the oil shocks of the mid-1970s. That opened the US market to a flood of more fuel-efficient imports that devastated the American manufacturers' market share".

But for Detroit, says Boyle, the problems started much earlier. "In the late 1940s, the major manufacturers began moving production out of the city, partly so they could build new, more efficient plants elsewhere, partly to shift production away from what had become a union stronghold." By the late 1950s, even at the point when the US was producing the majority of the world's cars, "Detroit was already experiencing dramatic de-industrialisation", he says, "which strained the city's social fabric in horrific ways". This strain culminated in the infamous 1967 Detroit riot, which caused 43 deaths and the destruction of some 2,000 buildings in a five-day period.

Coleman Young, Detroit's first black mayor, wrote in 1994: "The riot put Detroit on the fast track to economic desolation, mugging the city and making off with incalculable value in jobs, earnings taxes, corporate taxes, retail dollars... development dollars, investment dollars, tourism dollars, and plain damn money". The money, he adds, "was carried out in the pockets of the businesses and the white people who fled as fast as they could" in a 'white exodus' that jumped from 22,000 in 1966 to 67,000 in 1967 and 80,000 in 1968. In fact, the fall of Detroit in population terms alone is staggering: in 1950, it was America's fourth largest city with 1.85 million inhabitants. By 2011 there were just 714,000: the lowest for a century.

Although it's easy to blame Detroit's problems on the decline of the motor industry, there's more to it than that. Most commentators blame a complicated mix of poor political leadership, racial tension and lack of investment. Thomas Sugrue, author of 'The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit', says: "Detroit is an extreme case of problems that have afflicted every major old industrial city in the US. It's been 60-plus years of steady disinvestment, depopulation and an intensive hostility between the city, the suburbs and the rest of the state."

The big question is whether, having stared into the abyss of desolation, depopulation and debt, Detroit can bounce back.

The empire strikes back?

Professor Boyle's analysis is pragmatic: "Detroit is never going to be the industrial centre it once was, and certainly not the auto capital. So it will have to build a new economy. The pivotal question is what that economy will look like."

One vision, explains Boyle, sees the city being "rebuilt from its downtown outward, with high tech driving the transformation". This option is promoted by businessman Dan Gilbert, founder of Quicken Loans, which moved its HQ to downtown Detroit in 2010. Gilbert's Rock Ventures group subsequently purchased more than 60 downtown properties as part of an initiative he calls Detroit 2.0, and his various businesses employ some 11,000 people in the city. According to Boyle, firms such as Google, Twitter, Uber and Microsoft Ventures have rented office space and Starbucks has returned to the city after a six-year absence.

These days, if you search for tourist activities in Detroit, you'll soon come across The Henry Ford Museum and its offshoots (including Greenfield Village, River Rouge factory tour and the inevitable IMAX theatre). There are also tours of the Ford Piquette Plant, which assembled nearly 12,000 Model Ts between 1908 and 1910, before the Highland Park facility opened. While this represents a commendable celebration of Detroit's automotive history, a city cannot live on history alone. Luckily, there are already signs from the motor industry itself that Detroit may recover.

In September, GM announced that it will start building a new Cadillac sedan at its Detroit-Hamtramck plant on the city's east side from 2015. "The objective for this upcoming model is to lift the Cadillac range by entering the elite class of top-level luxury cars," said president Johan de Nysschen. The new Caddy is part of a $384m investment in the assembly plant, which also makes the Opel Ampera, Chevrolet Impala and Cadillac ELR, a luxury version of the hybrid electric Chevrolet Volt.

Michigan's Governor, Rick Snyder, made the most of the announcement: "Michigan takes great pride in being recognised as the automotive capital of the world. GM's choice to build its Cadillac flagship sedan at Detroit Hamtramck is ... another sign of the amazing comeback under way that's building a strong foundation and bright future for all Michiganders."

Earlier the same month, GM revealed that its 2017 Cadillac CTS would feature a "semi-auto pilot mode dubbed Super Cruise" that includes "hands-free lane following, braking and speed control in certain highway driving conditions". It will also use vehicle-to-vehicle communication technology to improve safety and traffic congestion by exchanging basic information such as location, speed and direction of travel between approaching vehicles. This will warn drivers and supplement active safety features, such as forward collision warning, that are already available on many production cars.

Despite activities within the car plants, the streets are where a city makes its image, and there is no denying that Detroit has an image problem. The downtown area still has more than its fair share of 'vacant lots', currently used as car parks, and dilapidated structures surrounded by security fences. Apartment buildings in the once exclusive Palmer Park Historic District, reflecting a melange of architectural styles from Art Deco to Venetian, are boarded up and falling apart. Visitors are discouraged from visiting some of the poorer neighbourhoods.

That said, there are signs of recovery here too. Some Palmer Park apartments have been renovated and 'To Let' signs are going up. The modern business district on the Detroit River is served by the Rosa Parks Transit Center, built in 2009, and a monorail known as the Detroit People Mover. And while it's true that the gleaming towers of the iconic GM Renaissance Center were built in the 1970s, they still look pretty swanky.

There may even be hope for the deteriorating Packard Plant. The site was sold to Peruvian businessman Fernando Palazuelo in January 2014 for $405,000 after competing bids fell through. He is reportedly trying to raise $300-400m for redevelopment. According to Kari Smith, a spokeswoman for Palazuelo's company Arte Express Detroit, the objective is a "phased renovation ... into a mixed-use development including light manufacturing, commercial and residential uses", incorporating the "historic revitalisation of a majority of the structures located on the site". Anyone who has wandered through what remains of the Packard might retort "best of luck with that!" but some unsafe concrete columns have already been demolished, limited security has been installed and an asbestos survey is under way. Smith says the 7-10-year project will start with the renovation of the administrative building and a historic bridge between the north and south sides of the site.

It would be good to return to Detroit in a few years to find electric cars, sold from a showroom in the Packard Plant, gliding through the city streets, perhaps blaring out Motown hits. If this new era of promise helps restore Detroit to its former glory, the wheel will indeed have turned full circle.