Detroit could not operate with indefinite budget deficit. Michigan State declared financial emergency of Detroit on March 1 and took over its municipal management. Detroit became the sixth city taken over by state government in the United States.
Detroit is in financial difficulty: the city has long term debts of 14 billion U.S. dollars and budget deficits of 327 million dollars. According to Bloomberg's report, the yield of Detroit municipal bond expires in 2015 rose from 7.5 percent at the end of 2012 to 9 percent at present.
"The difficulties of the city proper of Detroit are typical for rust-belt," said Matthew Gibb, deputy chief of Oakland County.
He said that auto industry in Detroit prospered over 50 years ago. With land and labor cost rising in the city, manufacturing facilities spread to suburbs and outskirts.
Among three American motor companies, only GM's headquarter is located in Detroit. Ford is now headquartered in Dearborn in southwest of Detroit while Chrysler is based in Waterford, the seat of Oakland County -- about 30-minutes to Detroit. Even parts are mainly manufactured in towns north to Detroit.
Many people misunderstand decline of Detroit as problems of U.S. auto industry, Gibb said. In fact, auto industry is in good health in the United States. The 2012 performance of GM, Ford and Chrysler set records for many years while auto industry has been a power driving the economic recovery of the United States. Sales of cars and trucks in 2013 are expected to reach 15.3 million, much higher than in 2012 and approaching the previous record of 16 million in 2007. All this seems to have no relation with the downtown of Detroit.
Exhibition marks 10th anniversary of Leslie Cheung's death
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