Detroit: A Warning For the World's Cities

n 1950 Detroit was America's fourth largest city, with a population of nearly two million. The population is now less than 900,000, 82 per cent of which is Afro-American.

This exodus of people and commerce to the suburbs resulted in a massive shift of capital, and a declining tax-base in the inner-city. While Oakland County, the wealthy suburb to the north, is one of the most affluent areas in America, Detroit itself is the country's most impoverished city - not only a synonym for urban decay, but a repository of all of America's most intractable problems: the decline of manufacturing and the threat of competition from overseas; racial tensions; a housing market decimated by the subprime mortgage crisis. More than a third of Detroit's residents live at or below the federal poverty line. Ironically, in the city that gave America the automobile, more than a fifth of households do not own a car.

The woes of Detroit have been inextricably linked to the woes of the car industry. Forty years ago, Detroit's 'Big Three' - General Motors, Ford and Chrysler - manufactured 75 per cent of all the cars sold in America. Fifty per cent were built by GM alone; now the Big Three cannot achieve that figure between them. GM has 23.5 per cent of the market, Ford less than 15 per cent. Sales and jobs have, quite literally, gone south - to Toyota, Honda and Hyundai plants in Tennessee, South Carolina, Alabama and elsewhere. Since 1999 Michigan has lost more than 120,000 jobs in the auto industry with manufacturers attempting to 'right-size' (in the preferred euphemism) their workforce and parts suppliers cutting back or going bankrupt.

Last year, GM posted a record loss of $38.7 billion - roughly equivalent to the gross domestic product of Bulgaria. It would be inconceivable for the US government to allow GM to go out of business, not least because of the enormous healthcare and pension funds - known as legacy costs - for former employees wrapped up in the company. Ford lost $12.7 billion and was obliged to mortgage its assets to stay in business.

More.

NVDL: Lots of people think this has suddenly happened? it's been happening all along, for a long time. We've only noticed urban decay now that suburban decay is on the cards. We will see Tent Villages and ghettos transforming neighborhoods in ways we previously wouldn't have thought possible.