Auto show aids Detroit's revitalization

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Posted: Tuesday, January 14, 2014 12:00 am | Updated: 11:09 am, Tue Mar 25, 2014.

DETROIT — Ever since Detroit filed for bankruptcy six months ago, political and business leaders here have insisted that the city's long-awaited comeback has begun.

This week is their chance to prove it, as thousands of automotive executives and suppliers descend on downtown for the annual North American International Auto Show, which opened for news media previews Monday.

The auto show has historically been a financial boon to the city, and this year is no exception. Organizers estimate that it will contribute $365 million to the local economy in wages and other spending.

Yet with the city mired in Chapter 9 bankruptcy, the event has taken on added importance. With Detroit's worldwide reputation as shaky as its finances, it desperately needs a successful show to improve its battered image.

“My hope is that the show will give visitors an understanding of the real changes happening in the city, and that they're not just cosmetic,” said Arthur Liebler, a former marketing executive with Chrysler and Ford.

While Detroit's neighborhoods are deeply troubled by crime, abandonment and substandard city services, its downtown is benefiting from a wave of investment and corporate expansion.

As recently as 2006, work crews prepped the city to host the Super Bowl by painting over graffiti and putting pictures of flower pots and curtains on the windows of empty buildings.

Now dozens of structures are in various stages of rehabilitation, and companies like mortgage firm Quicken Loans have filled up much of the vacant office space. Streets that were once desolate are slowly coming to life as young professionals move into restored lofts and apartments.

City leaders are quick to point out other early signs of a broader revival, such as a nascent technology sector, new restaurants and retail stores, and the revamped Cobo Center convention facility, where the auto show is taking place.

Detroit still faces huge challenges as it grapples with an estimated $18 billion in debt in U.S. Bankruptcy Court and tries to upgrade basic services like police protection, street lighting and garbage removal.

But the glamour and glitz of the auto show is a welcome relief from negative news, and an opportunity for Detroit to put on its best face for industry executives and other attendees from around the world.

“It is very important for the auto show to go off without a hitch,” said Jeffrey Stoltman, a business professor at Wayne State University in Detroit. “This is a compelling story that the whole world is following.”

This year's show has attracted 17 major auto companies, headlined by the hometown carmakers General Motors, Ford and Chrysler. More than 50 new vehicles will be unveiled at press conferences this week before the show opens to the public Saturday.

For the manufacturers, the Detroit show is a bellwether of an industry that has come back strong after bottoming out during the recession. Automakers sold 15.6 million vehicles in the United States last year, a 7.6 percent increase from the previous year and the industry's best overall performance since 2007.

The big sales have translated into healthy profits for GM, Ford and Chrysler. In GM's case, this year's auto show is an exclamation point on its unlikely turnaround from the dark days of 2009, when the company went bankrupt and needed a $49.5 billion government bailout to survive.

And as the only car company with headquarters in the city, GM is emphasizing its Detroit roots during the auto show. The company chose to reveal a new version of its GMC Canyon pickup Sunday night at the Russell Industrial Center, a hulking former auto plant north of downtown that has been converted into studio space for artists.

“It is rustic, but it's symbolic of the revitalization of Detroit,” said David Barnas, a GM spokesman. “It is important for us to have showcase events in locations like this.”

The excitement surrounding the show has, however, been tempered by the harsh reality of Detroit's financial collapse.

After the city filed for Chapter 9 in July, some auto executives in Europe raised concerns to the show's organizers, the Detroit Auto Dealers Association, about public safety in the city.

“There were a few comments about whether we'd even be having the show this year,” said Joe Rohatynski, a spokesman for the dealer group. “We had to come up with a statement that this show is not going anywhere.”

Last week, Detroit's new mayor, Michael Duggan, toured the auto-show floor as workers hustled to finish the elaborate stages and exhibits for the new cars.

Duggan said the auto show had the potential to send a powerful message to out-of-town visitors and suburbanites that Detroit could thrive again.

“Cobo has never looked better, and I don't think the auto show has ever looked better,” he said.

The larger question is whether the show will be simply a brief respite from the pain of bankruptcy, or a milestone in Detroit's turnaround.

Liebler, for one, says he is convinced the building blocks are in place.

After retiring from Chrysler, he bought the iconic Whitney restaurant on Woodward Avenue, one of the city's main thoroughfares. For several years, the business struggled. But the fledgling recovery downtown has brought in new customers — and a measure of hope for Detroit.

“Once the bankruptcy issues are resolved, I truly believe there will be no stopping us,” he said.

“And after 45 years living in this town and watching it spiral downward, I'm more than ready for the change.”

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