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Howes: As 2017 winds down, Detroit proves it has a “sense of purpose once again”

Detroit People Mover
Sönke Biehl
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"These companies are facing probably the most fundamental change to the auto industry since Henry Ford and the moving assembly line, and General Motors and Ford particularly are demonstrating that they can play," Howes said about Ford and GM.

 

 

Daniel Howes, Detroit News business columnist, joined Stateside to look at Detroit's year in review. He shared his takeaways about Detroit's progress post-bankruptcy and what to look forward to in Detroit's future from the auto industry and its neighborhoods.

Listen above for the full conversation, or catch highlights below.

 

On Detroit's progress

 

I think what's happening in the city of Detroit is remarkable, and if you look at over the space of time, it's only three years ago this month that Detroit exited the biggest municipal bankruptcy in American history. You wouldn't know it by looking at the city, by looking at the energy, the things that are opening, the District Detroit development from the Ilitch family, Dan Gilbert this month has said we're going to finally build on the Hudson's site after 20 years of it being vacant. But the energy ... in the city is pretty remarkable. And Mayor Duggan has won reelection. I think a lot of people expected that to happen and it did, and clearly he is delivering balanced budgets, which he has to do, but there is a sense of alignment and everybody's kind of moving in the same direction. You saw that with the Amazon bid, putting that together earlier this year, business and political leadership, city and suburban coming together, so it's not just about the city, I think it's about the sense of purpose once again that, to borrow a phrase the president likes, that Detroit's winning again. Its car companies are seeing some of the most profitable times they've ever seen in their history, so there's a lot of possibility here. For a place that's been down and given up for dead for so long, the way it feels to me is very optimistic."

 

On putting the spotlight on Detroit's neighborhoods

 

This is a process and a lot of the success is starting to radiate out. You see foundations and other areas that are starting to focus on neighborhoods, certainly Mayor Duggan in the run up to the election for reasons that should be fairly obvious, was focusing a lot of City Hall's attention on neighborhoods. And why was he doing that? Because of the electoral advantage that that might give him in the election. But I think you're seeing more and more of that. You're going to see developments in places like around Marygrove College, which is recently dropping its undergraduate education, but there's going to be some reinvestment in and around that neighborhood, and you're going to see more of that as time goes forward. I think everybody understands that a lot of this development does need to happen in the neighborhoods, and certainly, rhetorically, you're hearing that from a lot of leadership. The proof is going to be in what actually happens, and I think we'll see that starting in '18 and into '19."

 

On the auto industry's future

 

"[This year] has proven in a sense that they can compete in an all new kind of industry. I mean it's referred to by other people, and me to some extent, as 'Auto 2.0.' These companies are facing probably the most fundamental change to the auto industry since Henry Ford and the moving assembly line, and General Motors and Ford particularly are demonstrating that they can play, and that they can play against the best, the most highly capitalized companies in the world, certainly in the United States and coming out of Silicon Valley.

 

They're essentially having to walk and chew gum at the same time, meaning they are putting enormous amounts of investment into mobility space, into autonomy, and in traditional trucks and SUVs, so they're having to do both at the same time. And, really, if you can't get your core business fixed and really running optimally, you're not going to have enough resources to invest in the next generation technologies, so one of the real stories I think going into next year in terms of Detroit auto companies is going to be who's going to be able to optimize their business the most, and I think right now, going into the new year, you'd have the say that's General Motors, that they are optimizing their core business in a better way than Ford is, and Ford, people are looking for them to make some big, game-changing decisions I think as early as the first quarter under new CEO Jim Hackett, and if they don't, I think a lot of people are going to say Ford is really going to start falling further behind. I don't expect that to necessarily happen because I think the pressure for them to move is going to be so great, that they are going to make some tough decisions on product, and getting rid of some product that really just isn't meeting the targets that they need to hit, and reinvesting in some others."

 

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