Mass exodus from Michigan as wheels come off US car industry

Jan 20, 2010, 14:50 GMT

Detroit - Chris Jaszczak took a gamble when he bought a theatre in the heart of Detroit in 1987, at a time when the steady decline of the US car industry was prompting many to flee a region that was once the pride of US manufacturing.

'My friends all thought I was nuts,' said Jasczczak, owner of 1515 Broadway. 'In the '80s, people were abandoning buildings, not buying them.'

Yet Jaszczak, whose father spent 44 years in the car industry as an interior designer for Fisher Body, has managed to keep his business afloat as Detroit and the state of Michigan seemed to fall apart around him. That gave him a more optimistic sense of the city's future.

'Detroit's not going anywhere. My intention is to be here for the reformation of it,' Jaszczak said.

Detroit was looking for such a rebound as it hosted the annual North American International Auto Show this week. The nine-day Detroit show, a trendsetter for the wider industry, is expected to attract about 700,000 visitors through Sunday, bringing in more than 300 million dollars for the local economy.

With a new focus on smaller and cleaner cars, the US auto industry is hoping it has turned a corner after decades of decline. Michigan officials are hoping that the reorganization of the industry marks the start of an effort to return people to the state.

Michigan has been suffering from a mass exodus over the last few years, the result of a steadily declining auto industry that has been the state's main employer for the last century.

In 2009, Michigan's population fell below 10 million for the first time since 2000, according to the US Census Bureau. The state has lost more than 100,000 people just since 2005.

'We will at some point have a major 'Come home to Michigan' campaign, but we're not there yet,' Governor Jennifer Granholm conceded during the auto show.

That campaign is unlikely to be launched before the end of her term in January 2011, she said.

For those left behind, the bottom fell out over the last two years as the United States entered its worst recession in seven decades, bringing the car industry to its knees.

At about 15 per cent, Michigan has by far the highest unemployment rate in the country. Its largest city, Detroit, is in even more dire straits, with more than a quarter of its population out of work.

Detroit has long ridden the highs and lows of the US car industry, putting it on a path toward decline since the 1960s. Foreign carmakers for decades have steadily gnawed into the market share of General Motors, Ford and Chrysler, Detroit's once-proud 'Big Three.'

GM and Chrysler entered bankruptcy in spring 2009 and have slashed their workforces to stay afloat. Foreign carmakers operating in the United States have chosen to build their plants in southern states including Tennessee and Alabama, which have cheaper worker costs, cultures less open to labour organizing and less government red tape.

'It's still going to be a couple of tough years for us,' said Beth Chappell, head of the Detroit Economic Club. 'We are not in any way, shape or form out of the woods yet.'

Artefacts of the city's once-bustling lifestyle are everywhere. Detroit once boasted more theatre seats than any other city in the United States, built to accommodate a population that is now half of what it was in the 1950s.

Downtown buildings have stood empty for so long that they spawned a new art form - graffiti painted from the inside of windows.

Abandoned auto plants have become an attraction unto themselves: The DetroitYes Project has been running a tour - 'The Fabulous Ruins of Detroit' - for more than 10 years. Local residents rummage through remains of the old Packard plant, which closed in 1956, hoping to find a souvenir from Detroit's past.

'People go to Italy to see the Coliseum. Here in Detroit, they want to see the ruins,' said Jaszczak.

Detroit's population peaked at nearly 1.85 million in 1950, making it the fourth-largest US city. It has since slipped to about 900,000. Jaszczak reckons the bleeding won't stop until the city hits 500,000 people.

Echoing local politicians, Jaszczak suggested the wider state could make more use of its fresh-water resources. The state borders three of North America's chain of Great Lakes: 'Michigan is the Saudi Arabia of water.'

Politicians now recognize the desperate need to diversify the state's economy. But with the car industry as the engine of prosperity in Michigan for most the 20th century, the prospects for a turnaround are uncertain.

'I don't think there is any one industry,' Chappell said, 'that will ever replace the auto industry as we have known it in Michigan over the last 100 years.'