Howes: It's a season for hope in new Detroit

In 1914, Henry Ford introduced the $5 day, a gateway to the middle class and a rising standard of living that changed the face of Detroit and its auto industry for the better part of a century.

In 1937, the United Auto Workers reached its first contracts with General Motors Corp. and Chrysler Corp. In the early days of 1942, Detroit began transforming itself into the Arsenal of Democracy, the engine that helped win World War II. In 1973, the first oil shocks exposed potentially fatal weaknesses of that powerhouse.

But 2009, drawing to a blessed close, will go down as the year that changed everything for Detroit, its home state and the bellwether industry that has defined for nearly a century its economic expectations and political life. Without direct intervention by the federal government, a bedrock industry of the U.S. economy would have collapsed into liquidation.

"I don't think in our wildest dreams anyone would have predicted a year like the last year," Bill Ford Jr., executive chairman of Ford Motor Co., said in a recent interview.

On one level, he's certainly right. The conditions that coalesced in the second half of 2008 -- skyrocketing oil prices, the global economic implosion, plunging consumer confidence, frozen credit markets -- to push GM and Chrysler into a White House-directed bankruptcy in mid-'09 were not easily foreseen by many.

Yet on a deeper level the unraveling of '09 was at least a decade in the making, a long, slow slide from the heady days of 1999 when Ford paid $6.4 billion for Volvo Cars of Sweden (but now is selling it to the Chinese for much less); when GM bought the remaining 50 percent of Saab Automobile (and now is closing it down) and when GM blew billions on a chunk of Fiat SpA.

That's when Ford was poised to earn record profits, in 2000; when Chrysler was still delivering fat checks to its new German owner; when the boom from selling pickups and gas-guzzling SUVs into a market fueled by cheap gas delivered earnings, big bonuses and a collective lethargy that made the fall of the last 12 months all the more painful.

As much as things came apart this year -- or felt each week as if they were -- the fissures began appearing long ago. In the automakers, their suppliers, their unions and their unsustainable business model. In the corrupt, self-absorbed politics of the city of Detroit, epitomized by the scandals that took down the former mayor, Kwame Kilpatrick, and a former City Council president, Monica Conyers.

This year exposed the rotting core of the city's public schools, still dangerously close to financial collapse. It revealed the backward-looking politics of Lansing, the clinging to the status quo, the hand-wringing over funding (or not) of local schools and government even while refusing to broach the entitlement time-bombs.

Yes, this year is when the water drained from the metaphorical bathtub that is Detroit and Michigan, uncovering an infrastructure of expectation and expense that cannot be supported by a smaller auto industry with fewer employees, by a smaller population earning less per capita, by legislators making promises they know they cannot keep.

Hopeless? No, especially not now, in this season of renewal. There is hope in a new, slimmer GM shorn of its also-ran brands, crushing debt loads and now run by a fresh leadership team that is not the sum total of the company's past 30 years.

There is hope in a fiscal vise that will force compromise and change on a Legislature predisposed to neither. There is hope for a Detroit Public Schools led by a financial realist empowered by a governor finally awakening to her responsibility to the city's kids.

There is hope in a mayor of Detroit, Dave Bing, who has the character to work for something larger than himself, the courage to tell the public what needs to change and the muscle to do it. There is hope a new City Council will be part of Detroit's solutions, not the source of more needless and silly problems.

There is hope because the change has already come.

dchowes@detnews.com">dchowes@detnews.com (313) 222-2106 Daniel Howes' column runs Tuesdays, Thursdays and Fridays.