Last Friday was a good news day for Detroit. No, I’m not talking about President Bush’s loan package. That wasn’t so much good news as a stay of execution, with a case on appeal. And it wasn’t shadenfreude. What joy can anyone in the auto biz take from the reports that previously invincible Honda is losing money and cutting production? Or that Prius sales are down 50 percent, Toyota has suspended work on their proposed Prius plant in Mississippi, and the company will have a loss this fiscal year, the first in 71 years? No, the good news came, from all places, The Michigan legislature.
The august body passed legislation funding projects that could help the city of Detroit recover economically. What got the most attention, both from the general media and from car folks: a $288m dollar plan between the state, the city of Detroit and Wayne, Oakland Macomb counties. The partnership will improve and expand Cobo Hall (by 166k sq. ft.) to provide more space for exhibitors and allow Detroit to keep the North American International Auto Show (NAIAS). The refreshed and enlarged Cobo will join the newly renovated Book Cadillac hotel in the effort to increase Detroit’s convention business.
The legislature also funded a 3.5 mile light rail transit system to link the New Center area and downtown. This will also help convention business, as well as nurturing the nascent development along the Woodward corridor in recent years.
Otherwise, meanwhile, let’s face it, it hasn’t been a good year for the Detroit auto show. Nissan/Infiniti and Mitsubishi dropped their factory displays. Porsche, Land Rover, Ferrari and Rolls Royce pulled out entirely, That’s notwithstanding the success of last year’s “Gallery” program, which gave hundreds of well-heeled guests from around the country a private showing. A marketing event that racked-up a reported $3m worth of luxury car sales.
In a speech to the Detroit Economic Club, NAIAS’ senior co-chairman acknowledged the “dire times” facing the auto industry. Joe Serra sold the silver lining, asserting that the departing manufacturers had opened the door to other companies who wanted in. In fact, Serra said the total number of exhibitors on both floors will increase by two, and there will be more world premieres this year than last.
Still, this year’s NAIAS will be a low-key event. The New York Times reckons you can tell how the domestic auto industry is doing by the size of the shrimp at the Detroit auto show media preview. This year, swag shrimp of any size will be few and far between. Chrysler will forgo their usual showbiz introductions; all the manufacturers will have simpler displays. They’ll be fewer pretty girls, less glitz and more focus on product and business plans.
That said, the incrementally increased number of exhibitors will be displaying cars of particular interest to enthusiasts. The Bugatti Veyron will make its first ever NAIAS appearance. Lotus will have its first factory NAIAS display.
The success of the Elise and derivatives, as well as Lotus’ involvement in the development of Chrysler’s EV sports car, makes a NAIAS booth for Lotus a natural idea. Technology partner and electric car pioneer Tesla will have also have its first Detroit auto show factory booth, hawking their lithium-ion-powered Roadster. Self-appointed Tesla CEO Elon Musk will be speaking to the Society of Automotive Analysts at a NAIAS related event on January 13.
Also on the electric car front, Chinese automaker BYD plans to use the NAIAS to introduce a serial hybrid with a 60-mile batteries-only range. BYD produces about 25 percent of the world’s cell phone batteries, so they may have a leg up on other manufacturers’ electric plans. China’s Brilliance Auto will display for the first time. Along with BYD, Brilliance will be the first Chinese manufacturers to display on the main floor in Detroit.
Meanwhile, there’s other game afoot. To keep Michigan in the running for tomorrow’s battery technology, the state legislature approved a tax credit package intended to make the state a national center for the development of batteries for transportation. The bill will provide up to $335m in tax credits from 2001 to 2016.
Legislators and Gov. Granholm hope that the tax credits will help Michigan businesses access the $1b that Uncle Sam’s investing in battery research. While it would be better if the news was about private sector investment instead of government funding, it’s nice to see the state and federal government offerring local industry and innovation a helping hand.
Legislators passing bills and ‘funding’ a project is one thing.
Actually executing it, and, heavens forfend, paying for it? Whole ‘nother kettle-o-fish.
Good news for the ‘faithful’. For those of us who actually pay attention to what state governments ‘fund’ v. what actually happens?
I’ll believe when it’s 90% finished.
In a state that is going to be borrowing a bunch of money from the Fed in 2009 just to pay it’s unemployment bill, I don’t see it happening.
I guess DET koolaid really is more powerful than LSD.
I am unfortunately a resident of Michigan. The taxpayers take a back row seat to Detroit, the auto companies and the UAW. Our horrible roads are legendary. Detroit is a science fiction set, MDOT has cut plowing to save money. The schools are in financial ruin. The entire state is a financial basket case. Now they are going to improve COBO hall to the tune of 248 million dollars? The best politicians money can rent. Disgusting
Hmmm, $288 million for improvements, give it the usual 10% fraud/kickback premium for Detroit and looks like a $28.8 million stimulus for corrupt Detroit politicians! God I love this country . . .
L. Brooks and his Oakland County cronies will do anything in their power to strip Detroit (City) of the NAIAS. If Patterson had it his way, they would be building a convention center in Troy someplace. Hell, the NAIAS’s main office is over on big beaver near Somerset.
I will admit, however, that the union employees at Cobo are absolutely useless. I have heard nightmare stories about these lazy-asses using every trick in the book…they take an extra 6 hours to set up display that would normally take 2. These assholes would then stretch out their day as long as they could so that they could get any overtime by doing repetitive work and fake busy-work. Want a light bulb put in? You gotta make about 6 phone calls. Want a ladder moved? You are lucky if it gets done by Friday.
Downtown is looking pretty good though with the addition of the Fort Shelby Hotel as well as the Book Cadillac Hotel. I fully expect the posters on TTAC to say nasty remarks and basically slander the city on this thread.
“They’ll be fewer pretty girls, less glitz and more focus on product…”
Well, if they’re going to be like THAT, I’ll certainly not be going. Sheesh! Did they think we actually looked at the cars?
Detroit has sprawling, massive problems. A convention center and a few tax credits just aren’t going to cut it.
To fix it would take a lot of work, time, patience and money. There would need to be a viable job base, a good deal less urban blight and a decent public school system. Tourist and convention appeal would be a plus, but you need a lot more than a convention center to have conventioneer appeal.
There comes a point when hard choices need to be made. Decisions need to be made about whether some things are worth defending. Detroit may be one of those cities where, at the very least, certain sections of it should be condemned, demolished and effectively abandoned so that the city resources can be concentrated where they can do the most good for the most people.
As is the case with the auto industry, the unwillingness to make tough decisions and concentrate resources where they could do the most good might be a large part of the problem. This applies not only to Detroit, but also to other cities that find themselves in similar straits.
The legislature also funded a 3.5 mile light rail transit system to link the New Center area and downtown. This will also help convention business, as well as nurturing the nascent development along the Woodward corridor in recent years.
Gasp! Public transit in Detroit??? By golly, it will DOUBLE the capacity of the People Mugger.
@carveman: I’m with ya on that one. Same hokey idea that more casinos will reinvent Detroit. The renovation to Cobo is great and all to attract… well… NAIAS. But, it doesn’t change the fact that patrons are too scared to step foot outside it.
The legislature also funded a 3.5 mile light rail transit system to link the New Center area and downtown. This will also help convention business, as well as nurturing the nascent development along the Woodward corridor in recent years.
They already have a transit rail system, it goes right through the war-torn shithole of Detroit.
http://www.detroityes.com/downtown/31statler.jpg
@ PCH,
Tackling the problems Detroit has is way beyond Detroit’s capabilities and is just never going to happen. This isn’t about Detroit, per se, and it’s actually a good move, albeit one that should have been done 15 years ago. Keeping the NAIAS as the premier car show in America would be great for the US auto industry and the whole Detroit Metro area. Unfortunately, it may already be too late for that. Also, time will tell how much more time and money it really takes to accomplish this.
To keep Michigan in the running for tomorrow’s battery technology, the state legislature approved a tax credit package intended to make the state a national center for the development of batteries for transportation.
That statement is the only good news I saw in that editorial. Michigan and more importantly Detroit needs to attract more diverse businesses to it’s economy. Putting all their eggs in one basket is killing that area. Unfortunately the battery development is transportation related but it’s a start.
Putting $288 million in the convention center is a waste of resources when there are so many other ares in need of money like that: school distric, business diversification, rehabilitation of the war torn areas, basic infastructure, etc. This looks like just another case of gross mismanagement, this time by the government and not the Big 2.8. Try a different approach because doing the same thing over and over again has not been working.
Right, wrong, or indifferent.
Do you really believe it’s gonna happen?
In a state that is going to be borrowing a bunch of money from the Fed in 2009 just to pay it’s unemployment bill, I don’t see it happening.
California will go broke long before Michigan. Michigan has had a constitutionally mandated balanced budget since 1964, and while there have been at least a couple severe recessions since ’64 the Michigan state gov’t, unlike California, has never asked for direct federal assistance.
As for unemployment insurance, that’s all pretty much funded at the federal level already.
Carverman,
While I’m skeptical about “economic impact” reports, the NAIAS represents hundreds of millions of dollars in business for the entire region. Someone has to feed and house those 6000 reporters.
derm81 :
L. Brooks and his Oakland County cronies will do anything in their power to strip Detroit (City) of the NAIAS. If Patterson had it his way, they would be building a convention center in Troy someplace. Hell, the NAIAS’s main office is over on big beaver near Somerset.
Stop playing into the suburbs vs city game. Patterson knows that a modern convention center would cost over $1B and that money isn’t available any time soon. He also knows that any big convention or trade show downtown fills up the suburban hotels as well. There’s a reason why the NAIAS provides shuttle buses to journalists that run out to Southfield and Troy. The NAIAS main office is on Big Beaver (aka Quarton Rd, aka 16 Mile Rd.) because that’s where the Detroit Auto Dealers Assoc. has their offices in the same bldg.
I will admit, however, that the union employees at Cobo are absolutely useless. I have heard nightmare stories about these lazy-asses using every trick in the book…they take an extra 6 hours to set up display that would normally take 2. These assholes would then stretch out their day as long as they could so that they could get any overtime by doing repetitive work and fake busy-work. Want a light bulb put in? You gotta make about 6 phone calls. Want a ladder moved? You are lucky if it gets done by Friday.
As is the case at any convention center in Chicago or NYC. If you think Cobo is bad, you should try being an exhibitor at Javits or the Colleseum (as I have been) in NYC. I don’t see any more featherbedding or obvious union abuses in Detroit than I see at McCormick Place in Chicago.
JT,
Lambo still has a “Lamborghini Fashion Show” scheduled on the second day of the media preview. Enjoy. Frankly, I’ve never thought the Lambo booth babes were all that pretty. Pretty enough to be professional models, no doubt, but not my type. A couple of years ago Ferrari had a model who looked like the love child of Britney Spears and Heather Locklear.
JGH,
Gasp! Public transit in Detroit??? By golly, it will DOUBLE the capacity of the People Mugger.
@carveman: I’m with ya on that one. Same hokey idea that more casinos will reinvent Detroit. The renovation to Cobo is great and all to attract… well… NAIAS. But, it doesn’t change the fact that patrons are too scared to step foot outside it.
And using phrases like the “People Mugger” doesn’t perpetuate those fears, does it? My daughter takes my granddaughter on the People Mover whenever they go downtown. Ellie likes it so much she insists on making two or three circuits. I have no concerns about their safety on it.
kovachian :
They already have a transit rail system, it goes right through the war-torn shithole of Detroit.
That’s one problem of the internet. People go to a web site and it makes them instant experts. That’s an old picture, the Statler has been torn down for years now. The People Mover was never intended as a transit rail system since its route never leaves the downtown area. It was more of a monument to Hizzoner Coleman A. Young than anything else.
Redbarchetta,
My first draft actually said the battery funding was the least noticed and probably most significant announcement that day. As for diversification, Michigan actually has a pretty diversified economy, but the auto industry has been such an 800 lb gorilla that it’s easy to ignore agriculture, pharma, tourism etc. which are all significant.
And to preempt all the “tourism, right, nyuk, nyuk” remarks, plenty of folks vacation in northern Michigan. There’s a reason why the license plates used to have the motto “Water-Winter Wonderland”. Sadly that was replaced with a simple “Great Lakes” and now “Great Lakes Splendor”. Lots of golf courses, more coastline than any state except Alaska and God’s own Upper Peninsula. Michigan and Ohio once had a border war. Michigan won the skirmish so Ohio got Toledo and Michigan got the UP from the Wisconsin Territory.
Reading the article my thoughts go back to Michael Moore’s film about the failed attempts to improve Flint, MI by spending money on this and that project.
I then think of the various “improvement projects” in various places I have lived, many of them “downtown improvement” projects.
Lots of taxpayer money spent with meaningful results.
Of course, those projects typically create at least one new local bureaucracy providing high-paying jobs to a few bureaucrats whose pension plans and life-long health care plans are an eternal drain upon the taxpayer.
Meanwhile the local news tells of even more lay-offs and firm closings. As typical, the national mass media does not appear to be telling the full tale of current economic woes.
As for unemployment insurance, that’s all pretty much funded at the federal level already.
Ronnie, unless you are talking in some sort of ‘transfer of wealth’ terms, uhhh, no.
AFAIK, all UI is first a state program which is funded (depending by state) by the employer and/or employee witholding.
Yes, employees all have FUTA (Federal Unemployment Tax) witheld, but state programs are not run directly from this fund.
FWIW – By most accounts I have read, MI borrowed $480+MM from the Fed to fund their state program in 2008. Which will have to be paid back. Wanna guess what that number will be in 2009?
As an employer in MO, I have to pay the tax to cover the state programm. IIRC, MI is the same. That’ll be great for those employers who manage to stay in business.
As for union employees at trade shows, they are all horrible. If you think that doesn’t affect where convention planners steer their conventions, think again.
I got stuck in the Friday snowstom that hit Detroit. I had to stay over and realised that there are very few good hotels in Detroit. I ended up downtown and stayed at the brand new Fort Shelby. 90 million dolar renovation. Absolutley gorgeous. 15% occupacy rate downtown but there was alot to do. So there is hope for downtown Detroit of they can survive this downturn.
It’s too late anyway with the Detroit Auto Show. They don’t need more room because everyone is pulling out. And I live in the area.
As for the people mover, it is one of the few good things the city has done for itself. I can park for free at the Greektown Casino, and use the people mover for a dollar round trip to get to the Joe Lewis Arena or Cobo.
PCH101: The Freep has an excellent editorial saying just what you are saying about smart downsizing of the city, and providing the data to back it up:
http://www.freep.com/article/20080926/OPINION01/809260330/1068/rss06
They’ll be fewer pretty girls, less glitz and more focus on product and business plans.
Hey, it’s becoming the Toronto International Car Show!
Seriously though…the Lions?
Go Ronnie!!
I wish that some of the people who respond with the same useless gibberish would actually take a little time to investigate what Michigan is really about.
The greater Detroit Metropolitan area has one of the highest, if not the highest concentration of high technology companies and workforces in the world. There is such a concentration of engineering talent here that involves many other disciplines in addition to the automotive industry and suppliers. We have outstanding, world class universities, that lead in health care education and research, among other things.
This whole ‘Detroit sucks’ thing that is so mindlessly repeated is simply ludicrous.
The domestic OEM’s are NOT DETROIT. Get over it people!
In fact, Ford HQ is in Dearborn and Chrysler is in Auburn Heights – both upscale areas with significant numbers of international R&D facilities both within and outside of the automotive realm.
Downtown Detroit has had a renaissance over the last fifteen or so years – two new stadiums, the rebirth of the theater district and so on. Plenty of people regularly go there for entertainment and it is as safe as any other downtown area I have been in.
And as Ronnie mentioned, tourism is a major economic force in Michigan and has been for decades. Everything from vast forests to innumerable inland lakes, extensive sand dunes on the Lake Michigan lakeshore, world class fishing to the most impressive technical museum I have ever been in (The Henry Ford). Boating, skiing, camping, powersports, etc. are among many of the things that bring people from all over to come here.
Detroit has its problems, no doubt, but there is a great deal that is positive and expanding Cobo is one of those things – positive for the entire region. Try getting a hotel room when the SAE world congress is in town or any of the other major events. The NAIAS has lost some exhibitors – big deal. The economy is tanking and effecting every global automaker so why is this considered such a big deal?
I have been to several other auto shows and the only one that I have seen that is close is Frankfort – it is bigger, for sure, but that is because it includes their version of the SAE world congress, various other events like aftermarket and even scale modeling events all held concurrently. (Really liked the scale modeling part – I had no idea that this was such a big industry).
Plenty of people regularly go there for entertainment and it is as safe as any other downtown area I have been in.
Like what Compton? St. Louis? (And STL regularly under reports crime stats to the FBI).
I like Michigan (at least 3 months of the year). I have lived in MI. I have owned a home in MI. But it is what it is. And DET is what it is.
Like Toronto, Montreal, San Diego, Munich, Frankfort, Indianapolis, Chicago, and so on ….
I live in Michigan and like it all twelve months of the year – learn to play in the snow!
And I have lived in other parts of the country, Canada, the UK, and have spent months in various cities in Germany.
“I will admit, however, that the union employees at Cobo are absolutely useless. I have heard nightmare stories about these lazy-asses using every trick in the book…they take an extra 6 hours to set up display that would normally take 2. These assholes would then stretch out their day as long as they could so that they could get any overtime by doing repetitive work and fake busy-work.”
derm81, were you talking about cobo people, or lawyers?
We can here the sound of their fiddlin’ all the way down here on the Gulf Coast.
I’ve been to Cobo Hall. They enlarged it back in the 90’s. What, that wasn’t big enough, even with fewer and fewer people living there?
And what the hell happened with that People Mover? Oh yeah, it was GOVERNMENT that created it, right?
So where’s the money for the “new new” Cobo expansion going to come from? The poor saps that live in Wayne or Oakland counties, or farther away like Lansing and Grand Rapids?
Or will the good people of Ohio, West Virginia, Utah, New Mexico, Colorado, Arizona, Florida, the Dakotas and Carolinas be forced at the point of a gun to assist with that little handout?
I’ve been to Cobo Hall. They enlarged it back in the 90’s. What, that wasn’t big enough, even with fewer and fewer people living there?
They keep expanding McCormick Place and the last time I looked the population of the metro Chicago area hasn’t increased significantly. Michigan has lost population due to the economy here over the past few years but the population of SEMI has been pretty stable at ~4 million for a while. Most of the decline in Detroit’s population, about a million people since 1960, is attributable to people, white and black, moving to the suburbs.
And what the hell happened with that People Mover? Oh yeah, it was GOVERNMENT that created it, right?
Nah, it wasn’t government, it was Coleman Young, HMFIC (though I have black friends who use a different version).
So where’s the money for the “new new” Cobo expansion going to come from? The poor saps that live in Wayne or Oakland counties, or farther away like Lansing and Grand Rapids?
Or will the good people of Ohio, West Virginia, Utah, New Mexico, Colorado, Arizona, Florida, the Dakotas and Carolinas be forced at the point of a gun to assist with that little handout?
Oakland county is one of the wealthiest counties in the country so it’s certainly the wealthiest in the state. In any case, it would have taken less time to Google [cobo expansion taxes] than writing the above paragraphs, but I suppose it’s more fun to knock Michigan.
From the Freep.
To pay for the $279-million expansion, the agreement extends to 2039 taxes on statewide liquor sales and metro Detroit hotel-motel rooms. Those taxes – 4% on poured liquor and 1% to 4% on local hotel rooms — were to expire in 2015.
The state will kick in $9 million. Also, $16 million would be funneled to Cobo Center from the state’s cigarette tax revenues through 2039.
To reduce the original $308-million price tag for the project, sales and use taxes will be exempted for contractors involved in the construction.
So no increased taxes. The $9 million from Lansing comes out of the general fund and represents a little more than a dollar per Michigan resident. One very cool idea concerning Cobo that wasn’t part of the package, though it may be enacted, is that the sales and use tax exemptions will be extended to sales within Cobo after the expansion. That would mean that sales of cars at the auto show (which are done at the Chicago show but not currently permitted by DADA, the NAIAS organizers) or at the big boat show (Michigan has more boats registered than any other state, something to do, I guess, with those inland lakes mentioned above and those big wet things called the Great Lakes) would be exempt from sales and use taxes. Saving 6% on the price of a new car or boat might even attract buyers from Ohio, Indiana and Illinois. Boy, that would surely piss off the Chicago Auto Show.
In the end, Detroit is going to need reasons for skilled professionals and businesses to locate there. Imagine this: “Yeah, we’re asking you to relocate from LA to Detroit.” Most people would say “You gotta be _______ me.” Like it or not, Detroit’s reputation is pretty poisonous. I don’t think most of my co-workers would even go to a convention in Detroit. Regardless of the facts on the ground, they imagine it to be Beirut on the lake.