But the term Detroit is even more complicated. Geographically speaking, Detroit is both a city and a metropolitan area. Conceptually, it's the one-word designator for the domestic auto industry. Symbolically, it's a byword for urban decline.
Consider: Detroit's (the city's, that is) population has been in steady decline since 1950, suffering a 25 percent drop from 2000 to 2010. More people have left Detroit in the past decade than now live in Orlando. The city's overwhelmingly African-American population is largely impoverished and unemployed; Detroit's 19.2 percent October unemployment rate looks better than the 27 percent the city hit in June 2009 but mainly reflects the fact that an estimated 38,000 people dropped out of Detroit's labor force altogether. The region generally remains grossly segregated—white, wealthy, suburban neighborhoods are separated by canals and freeways from poor, largely minority areas. All neighborhoods have watched property values slide as the foreclosure crisis hit; Motown led the nation in foreclosure rates in 2006 and 2007, and in more recent years, its dismal real estate situation has been blamed by some for dragging down the national housing market.
The formula for Detroit's current status is complicated—a mix of local, regional and national socioeconomic forces that are driven by politics, capitalism and racial dynamics evident throughout the region. But while many hands have shaped the good and bad of today's Detroit, the impact of current federal policy is easy to spot.
For example, the U.S. Department of Transportation recently backed off a pledge of $550 million for a 9-mile light-rail project to connect downtown to the relatively populous and wealthy Oakland County, and might fund high-speed buses instead. Several federal law enforcement agencies are putting resources toward prosecuting gun crimes in the city to help reduce a high crime rate. Homeland Security vehicles are seen patrolling the streets and waterways along the nearby border with Canada. But in recent memory, no federal policy has more directly affected Detroit—and stirred national debate—than the auto bailout.
A Political Target
Historically, the fate of the city and region has been tied to a single industry: car manufacturing. Concentrated in Michigan's southeast corner, the state's motor vehicle manufacturing and motor vehicle parts manufacturing industries employed about 120,000 people in 2010, according to the U.S. Bureau of Labor Statistics. Compare that with the roughly 296,000 that had those jobs in 2001 and the impact of the automobile industry's contraction is obvious.
National election rhetoric for decades has included aspects of Detroit, the industry. Conservatives decry labor's influence, but progressives court it, reflecting the ongoing relevance of the United Auto Workers union. Candidates have debated the wisdom of government mandates for fuel standards and whose fault it is that former U.S.-based manufacturing jobs have moved overseas. More recently, the preferred public investment in alternative energies has entered the fray. All issues directly affect Detroit, the industry.
But it's the controversial federal government loans approved in 2009 by President Obama in his first weeks in office that have sparked debate during this Republican primary season.
"My view with regard to the bailout was whether it was by President Bush or by President Obama, it was the wrong way to go," GOP candidate Mitt Romney—whose father ran an automobile company before serving as Michigan's governor in the 1960s—said during a November debate in the Wolverine State.
He was echoed by another candidate on the stage. "I do agree that this country is never again going to bail out corporations," said Jon Huntsman.
Obama's handling of the automotive industry was one of his first big tasks, and David Bonior had a front-row seat to watch him tackle it. A 13-term congressman from a suburban-Detroit district, Bonior managed John Edwards' 2008 presidential campaign and served on Obama's economic advisory board during the White House transition. He was one of the few left-wing members of that team and part of intense discussions in advance of the auto bailout announcement.
Bonior traveled to Chicago on the Friday after the 2008 election, meeting with nearly two dozen economic, corporate and government leaders who had been assembled by the new president-elect. "The two issues we talked about were the collapsing economy and the banking issue," Bonior recalls. "But Obama started out with the auto piece as part of that."
The panel's majority advocated letting the Big Three fail and proceed through private bankruptcy filings, Bonior says, and he gives Obama credit for pushing the bailout, which provided roughly $80 billion to GM and Chrysler; Ford didn't take the deal. "He stayed with a very strong policy, although it was unpopular," Bonior says. "The fact of the matter is the companies paid back [most of] the money they borrowed. They restructured based on his insistence on standards and mileage, and we get a better product today."
Bill Vlasic remembers that time with a shudder. A longtime auto industry reporter at The Detroit News, Vlasic now reports for The New York Times. His book Once Upon a Car: The Fall and Resurrection of America's Big Three Automakers—GM, Ford, and Chrysler hit bookstores in October. Vlasic weaves a corporate thriller based on interviews done months after the crisis period. He chronicles the failings within the industry—unwieldy egos, too many unprofitable product lines, massive bureaucracies, failure to predict rising fuel prices and respond to consumer demands for more fuel-efficient cars, and an inability to effect rapid change. These flaws seemed to come to a head in a moment that gave much of America and auto industry naysayers a reason to view the corporations with disdain: the three CEOs flew to Washington on private jets to beg for taxpayer money without so much as a chat beforehand to craft an effective message.
The auto execs "were amazed when they got to Washington and how negative it was from every direction: liberals on the environment; Southerners on unions; Republicans who didn't like Detroit's way of doing business," Vlasic says. However, resentment toward the industry and the revulsion at its tone-deaf leaders soon gave way to more practical considerations: "All of a sudden it was ‘My gosh, we could lose this industry, and it will be a lot more painful than swallowing hard and loaning them money.' "