Chrysler Corp.’s “Imported from Detroit” campaign has wowed the advertising world and helped to revive its brand. But Chrysler is taking some license with the slogan. It departed Detroit — Highland Park, actually — in the 1980s for Auburn Hills, a 45-minute drive from downtown.
Today, the former pastures around the Chrysler headquarters are covered by a forest of office buildings, most of them housing auto-related companies. Imagine if even half those towers had been built in downtown Detroit.
Chrysler chose the suburbs for the same reasons thousands of other businesses did over the past 50 years: Better services, a safer environment, less hassle and lower taxes. Since the 1950s, Detroit has lost roughly 90 percent of its manufacturing jobs; in just the decade between 2001 and 2011, 140,000 jobs of all types evaporated from the city.
It has been a long and relentless erosion, and yet Detroit’s leaders never made stopping it a priority. Few policies were adopted over that six-decade period to effectively retain jobs or to attract new ones.
And the conditions that helped accelerate the loss — high taxes, oppressive red tape and inadequate city services — have only worsened. Rebuilding an employment base is essential to creating a healthy and self-sustaining Detroit post-bankruptcy.
Build off downtown
The new-found excitement for downtown and midtown Detroit provides a jumping-off point.
“We have momentum in the city,” says Doug Rothwell, chief executive of Business Leaders for Michigan. “Now we have to build on it.”
The city must lift its focus into the neighborhoods, which are riddled with long-deserted commercial strips and vacant industrial tracts. Attracting jobs to those areas depends on the same factors, in part, as hanging onto and enticing residents to the neighborhoods. It starts with the basics.
Detroit must quickly and dramatically improve city services, particularly public safety. No amount of incentives a city can offer will convince a business to locate in an environment in which its employees don’t feel safe. It also needs a transportation system that reliably gets workers to jobs.
Jobs for Detroiters
Detroit is unlikely to attract a major manufacturing plant in the near term. So it must figure out what sort of other industries might be interested in the city.
Rothwell suggests concentrating on warehousing, call centers and low-tech manufacturing, all of which could provide jobs for Detroit’s low-skilled population. The high-tech firms that are landing downtown are a great benefit to the city, but they’re not much help to Detroit’s unemployed workforce that is roughly 47 percent illiterate and only 10 percent college educated.
Detroit needs jobs Detroiters can do right now. Rothwell suggests what he calls “just-in-time worker training.”
“If a business wants to come here and needs 200 workers for very specific jobs, we should be able to rapidly train those workers so they’re ready when the business opens,” he says.
Rothwell suggests seeking out companies that want a higher profile for their corporate commitment. “Companies with a social mission should be interested in Detroit,” he says.
Cut the red tape
Detroit has been talking for decades about a one-stop shop for helping businesses through the permitting process, but it never gets done. Oakland County has one and is able to move a business from permit application to opening in less than half the time it takes in Detroit.
“Within 48 hours of someone expressing interest in opening a business here, he has all of the necessary paperwork in his hands,” Patterson says.
So why hasn’t Detroit streamlined a permitting process that is so cumbersome many businesses just go ahead and open before getting approval from the city? “There’s never been a leader who’s said, ‘I’m going to do whatever it takes to make it happen,’” says George Jackson, head of the Detroit Economic Growth Corporation.
Jackson would like to see more permitting done via the Internet, which would require a major upgrade of the city’s archaic computer systems, and cross-department teams that would do all necessary inspections in a single visit. Property taxes on businesses raise just 12 percent of the city’s revenue. Jackson believes these taxes should be eliminated to compensate for the ultra-high insurance costs in Detroit, a byproduct of the crime rates.
As Detroit repopulates its neighborhoods, the city also should seek grant money to upgrade the shuttered commercial districts along its major arteries.
Detroit has attempted in the past to create development hotspots with tax-free zones. Developers have had limited success, largely because they weren’t supported with improved city services. This time, targeted tax incentives should be paired with service improvements.
Detroiters need jobs, and an aggressive strategy should be put in place to attract new employers — and keep them here.