1) Single industry dominance of the auto industry. As someone noted, when the auto industry was king, it helped smooth over a lot of problems that afflicted Detroit. Now that it’s near collapse, there’s nothing left to prop up Detroit.

2) 50 years of suburban sprawl. Detroit’s been sprawling outwards for years, matched by the decline in the city’s population. The metro area doesn’t lack for wealth, it’s just been disbursed across multiple counties.

1. First world markets are nearing saturation. Because today’s cars are better than yesterday’s, they last longer – in the US, it’s twice as long as 20 years ago. This means fewer sales per year.

2. Automation means that the auto industry is less labor-intensive. The cost savings are passed along to the consumer, who enjoys real declines in car prices.

3. Conversely, rising oil prices are making it less economic to own a car. The current oil glut is temporary, and GM is expecting $130/barrel oil and $4/gallon gas to be back by 2013.

4. There are smaller returns to scale than there used to be: unlike in the 1950s, there’s no inherent reason to keep all factories in one place. This makes it easier to offshore. Why pay $70/hour to workers in Detroit or even $45/hour in Huntsville, when you can pay $8/hour in Guangzhou?

5. Third world markets are growing too slowly. To the extent that they’re growing, global warming concerns are causing India and China to spend their resources on building mass transit, not highways. Cities in those countries are trying to look more like Hong Kong and Singapore than like Los Angeles and Houston.

Anon 2:29 – Good idea for INDY. I think there is already exist a large number of companies associated with racing and race tech around the area (not an area I know too much about.) But I do like the idea of INDY becoming the auto technology capital of the U.S. Being between Detroit and Ken/Tenn (with foreign auto manufacturing) could make this doable. For example attracting auto tech start-ups (e.g. high performance hybrid engine design, other components for racing or merely personal cars) to the area.

I neither missed his point nor twisted his remarks.

Some on this board make rather sweeping statements that are not based on reality.

The auto industry is the 2nd largest industry in the world and is likely to remain so until you are able to ‘beam yourself’ to another location.

In case you forget, much of Indy and its environs owe much to the auto industry…at one point Indy actually rivaled Detroit in the manufacture of automobiles. Am not quite sure how/why that mantle eventually passed to Detroit but it did. The Indy 500 is also a symbol of the importance the auto industry played in Indy’s history.

Might suggest that Indy figure out how to capitalize on its historic ties to the auto industry instead of focusing on what some consider future growth (with high risk and lots of competition) where its resources/location etc may not be an advantage.

Sbarkfully – anon

In addition, GE later merged its aerospace division into Martin Marietta…another divestiture.

GM built diesel-electric locomotives in its Electro-Motive Division, and once owned Hughes Electronics (a defense contractor), EDS (they bought it from Ross Perot), and GMAC (consumer lending). Ford once owned Philco-Ford, a consumer electronics brand, and built the renowned Ford Trimotor airplane. I think Chrysler had an aerospace division as well, but I'm a bit fuzzy there. The old American Motors AM General division built tanks, trucks, and Hummers for the military (can't remember if it was spun off before Chrysler bought AMC or after).

GE is one of the FEW success stories in US industrial diversification, mainly because they periodically turn over their portfolio of businesses. They bought RCA, one of the failed examples of multi-companies in the 1970s (records, NBC, tv's, semiconductors, space/satellites), kept NBC and satellites and got rid of the rest. They sold their small-appliance business to Black & Decker, plastics division to the Saudis, etc.

I say this with caution because I would hate to see already struggling companies move into charted waters; but wonder if in a number of years why GM or Ford couldn’t put themselves in a position to manufacture components for HS rail, wind turbines, etc. Certainly this could improve the Detroit economic base.

I am quite sure the garment industry had very few graduate degrees in its hey-day.

If you view the world thru the lens of Michael Moore and Monty Python, I fear the money spent on your graduate degree wudst been better spent…perhaps the publishing world ye are more suited