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  1. #21  
    Power CUer NJCardFan's Avatar
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    Quote Originally Posted by Artois View Post
    That question is certainly misleading, not all subscribe to the notion that the unions were responsible for your assertion that the auto industry in Detroit is dead. Or that the auto industry in Detroit is dead for that matter.
    So the fact that the dying auto industry is having a symbiotic affect on the city not to mention that 2 of the big 3 needed a huge bailout from the gubment is something I got from a dream? Um, if you say so.
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  2. #22  
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    Quote Originally Posted by NJCardFan View Post
    So the fact that the dying auto industry is having a symbiotic affect on the city not to mention that 2 of the big 3 needed a huge bailout from the gubment is something I got from a dream? Um, if you say so.
    Again, how is the auto industry dead or dying, since you've changed that? It seems to be alive and well from what I experience.
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    Quote Originally Posted by Artois View Post
    Ah, my apologies. Not to deviate further, but the white flight that Detroit experienced has been studied extensively and been well documented. I certainly wouldn't cast blame on the white's who fled Detroit for it's downfall, it was a more than reasonable move for most. However, the effect certainly exasperated the problems which Detroit suffered.

    My parents were part of that flight, although before 1967. And, they went further than most Detroiters of their generation-we moved around a few times, but settled in Grand Rapids. My parents constantly told us when we were growing up how lucky we were to grow up in such a nice place. They didn't even want to live in the Detroit suburbs. Yet, they both had great childhoods in Detroit.
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  4. #24  
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    Quote Originally Posted by Artois View Post
    Again, how is the auto industry dead or dying, since you've changed that? It seems to be alive and well from what I experience.
    It certainly isn't thriving. Unless you think needing billions of tax payer dollars thriving. Detroit depended on the auto industry like certain parts of the country rely on the coal mining industry. When the jobs leave, the people leave. Just ask Camden.
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  5. #25  
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    Quote Originally Posted by NJCardFan View Post
    It certainly isn't thriving. Unless you think needing billions of tax payer dollars thriving. Detroit depended on the auto industry like certain parts of the country rely on the coal mining industry. When the jobs leave, the people leave. Just ask Camden.
    I'd certainly disagree about your assessment of the current health of the Metro-Detroit auto industry. They're selling certain vehicles of their more profitable segments, as fast as they can build them. I know first hand that Chrysler and Fords have both been in massive hiring sprees that haven't been seen in over a decade. They're adding shifts, increasing lines, and seem to have their books fairly well in order at this point. Especially when taken in light of our economy for the past few years and in comparison to their rivals.

    As for the city of Detroit it's self. Outside of GM's headquarters and a handful of plants, the bulk of Detroit does not depend on the auto industry. Especially when you also consider that the bulk of the workers at those locations do not reside within the city limits.

    The Detroit-Metro region certainly is heavily centered around the auto-industry, which is still a strong vibrant player in that region. However it's also far more diversified than many people realize. The region is certainly not a single industry driven like a coal town. Granted, the sheer size of the auto-industry will always have it being a juggernaut of the area.
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    Quote Originally Posted by Artois View Post
    Again, how is the auto industry dead or dying, since you've changed that? It seems to be alive and well from what I experience.
    Well, for one thing, GM's stock valuations are poor, because it remains structurally unsound. From Forbes:

    Right now (summer 2012), the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.

    Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.

    It’s doubtful that the Obama administration would attempt to sell off the government’s massive position in GM while the stock price is falling. It would be too embarrassing politically. Accordingly, if GM shares continue to decline, it is likely that Obama would ride the stock down to zero.
    Today, the company's stock is selling at $36.62 per share, which is better than it was last year, and a slight improvement over their IPO, but still well below the break-even point for the fed's holdings.


    Quote Originally Posted by Artois View Post
    I'd certainly disagree about your assessment of the current health of the Metro-Detroit auto industry. They're selling certain vehicles of their more profitable segments, as fast as they can build them. I know first hand that Chrysler and Fords have both been in massive hiring sprees that haven't been seen in over a decade. They're adding shifts, increasing lines, and seem to have their books fairly well in order at this point. Especially when taken in light of our economy for the past few years and in comparison to their rivals.
    From the same article:

    In the 1960s, GM averaged a 48.3% share of the U.S. car and truck market. For the first 7 months of 2012, their market share was 18.0%, down from 20.0% for the same period in 2011. With a loss of market share comes a loss of relative cost-competitiveness. There is only so much market share that GM can lose before it would no longer have the resources to attempt to recover.


    Quote Originally Posted by Artois View Post
    As for the city of Detroit it's self. Outside of GM's headquarters and a handful of plants, the bulk of Detroit does not depend on the auto industry. Especially when you also consider that the bulk of the workers at those locations do not reside within the city limits.

    The Detroit-Metro region certainly is heavily centered around the auto-industry, which is still a strong vibrant player in that region. However it's also far more diversified than many people realize. The region is certainly not a single industry driven like a coal town. Granted, the sheer size of the auto-industry will always have it being a juggernaut of the area.
    Arguing that Detroit has a strong vibrant economy is imaginative, but hardly supportable. The Detroit-Metro area has lost 90% of its manufacturing jobs since the 1960s, and more besides — from 1950 to 2012, the population fell from 1.85 million to 700,000, a loss of 64% of the population. Given that loss, Detroit's continually high unemployment numbers demonstrate that there are not sufficient jobs to support that fraction of the city's population. It was so bad that in 2010, the Mayor proposed bulldozing nearly one-fourth of the city. From Business Insider:

    “Faced with a $300 million budget deficit and a rapidly dwindling tax base, Detroit finds itself having to make some really hard choices. . . . The true unemployment rate for those still living in Detroit is estimated to be somewhere around 45 to 50 percent, and poverty and desperation have become entrenched everywhere. In many areas of the city, only one or two houses remain occupied on an entire city block. . . . And yes, it is true that there are actually some houses in Detroit that you can buy for just one dollar. According to one recent estimate, Detroit has 33,500 empty houses and 91,000 vacant residential lots.”
    Does that sound like a strong, vibrant economy to you?
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  7. #27  
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    Quote Originally Posted by Odysseus View Post
    Well, for one thing, GM's stock valuations are poor, because it remains structurally unsound.
    If you read above, I referenced Ford and Chrysler's operations.

    From Forbes: Right now (summer 2012), the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.

    Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.
    The Treasury is certainly faced with difficulties, after having taken stock in lieu of cash for the repayment of bailout loans. Unfortunately, that has little bearing on GM's financial health. The historical trends in the auto industry also don't always correspond with the trends on Wall Street, hence it's somewhat disingenuous to compare them unless you're a short term investor.

    In the 1960s, GM averaged a 48.3% share of the U.S. car and truck market. For the first 7 months of 2012, their market share was 18.0%, down from 20.0% for the same period in 2011. With a loss of market share comes a loss of relative cost-competitiveness. There is only so much market share that GM can lose before it would no longer have the resources to attempt to recover.
    In the 1960's there was hardly any foreign or domestic competition. Now there are major German, Japanese, Korean, Indian, and even new domestic competitors. Of course they'd lose some market share, but market share is mostly prestige, what matters is volume... which they're doing well in. Of course, profitable volume matters even more, and with their truck sales as they are... they're making excellent progress. It should also be noted, that every auto manufacturer in the world received government loans or grants during this past economic crisis. It wasn't "just" the one's historically from Metro-Detroit. Toyota is even blaming the loss of their government subsidies for being why GM once again led the industry in sales volume. Not only have they topped the volume game, they've also finalized their fleet engineering for this years lineup to give them the newest fleet in the industry, pretty spectacular. Additionally, trying to intertwine 1960's statistics to make GM appear to poorly, is disingenuous at best, or an outright attempt at making a scarecrow.

    Arguing that Detroit has a strong vibrant economy is imaginative, but hardly supportable.
    What is also imaginative, is that I said Detroit has a strong vibrant economy. I never said that.

    The Detroit-Metro area has lost 90% of its manufacturing jobs since the 1960s, and more besides — from 1950 to 2012, the population fell from 1.85 million to 700,000, a loss of 64% of the population. Given that loss, Detroit's continually high unemployment numbers demonstrate that there are not sufficient jobs to support that fraction of the city's population.
    I'm sorry. You're apparently not grasping the difference between the City of Detroit and the Metro-Detroit Region. Perhaps it's understandable though, as you're possibly just falling in line with the article you selectively Googled.

    That article was in error...

    They started off speaking about Metro-Detroit, but than gave population and manufacturing job statistics on the City of Detroit. Completely different entities.

    The City of Detroit experienced drastic population declines since the 1960s.

    The Metro-Detroit population exceeds 4.2 million and has essentially maintained the same population since the 1960s.

    The City of Detroit has experienced, perhaps historically unfathomable manufacturing job losses. Guess where many of them went too.... the suburbs of Metro-Detroit.

    It was so bad that in 2010, the Mayor proposed bulldozing nearly one-fourth of the city. From Business Insider:

    “Faced with a $300 million budget deficit and a rapidly dwindling tax base, Detroit finds itself having to make some really hard choices. . . . The true unemployment rate for those still living in Detroit is estimated to be somewhere around 45 to 50 percent, and poverty and desperation have become entrenched everywhere. In many areas of the city, only one or two houses remain occupied on an entire city block. . . . And yes, it is true that there are actually some houses in Detroit that you can buy for just one dollar. According to one recent estimate, Detroit has 33,500 empty houses and 91,000 vacant residential lots.”
    Indeed, I even supported that measure. The City of Detroit has more land than Boston, Manhattan, and San Francisco combined! It's simply too large of a land area, with too few resources, to remain in it's current state in my view.

    Does that sound like a strong, vibrant economy to you?
    Again, while you've made a strong scarecrow to bash with your imaginary argument... I never said the City of Detroit has a strong vibrant economy. If anything, my freely shared thoughts with people I've known here for over a decade should reveal that I've argued quite the contrary.
    Last edited by Artois; 07-26-2013 at 05:19 PM.
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