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DETROIT -- Keith Crain was the latest speaker of the Detroit Economic Club last Thursday at the Westin Book Cadillac in downtown Detroit. The Automotive News publisher talked about the rising problems in the automotive industry with General Motors (GM), Ford, and Chrysler -- aka the Big Three. However, because they're in the same "financial swap", it could now become the Detroit Two.

"Detroit," Crain stated, "continues to get smaller and the market share keeps getting smaller. These Detroit companies have been on a downward spiral. A perfect storm has been coming that threatens Detroit. We've been in an recession over the past year. The storm has been massive. The auto industry, the United States government, and everyone ignored the signs of the perfect storm since the first oil crisis; it's caught up with them. We're in an economic disaster. People of the United States must understand how serious it is."

Crain spoke of two chapters at the meeting: the current automotive bailout loan that was recently rejected by the "wild card" known as the Senate that led more job layoffs for several employees (President Bush, though, is going to get the opportunity to look at it in hopes of overturning the decision), and getting more money as well as having new players in the Senate once Barack Obama gets inaugurated as President at the start of 2009.

"I don't believe an automaker can survive a Chapter 11 filing. Buyers would flee. In fact, I fear they may have already started. Revenues would collapse, and Chapter 11 would quickly turn into a Chapter 7 liquidation. But the strings attached to these loans and the car czar who would enforce them on behalf of the administration just might make many of the benefits of Chapter 11 possible. Ron Gettelfinger will get back even more on behalf of the UAW."

Despite being called the "greatest assessment to Detroit", Ford and GM have increasing chances of survival as the Detroit Two, which means that Chrysler is the weakest link financially. Still, according to Crain, Detroit can still be re-established as the motor capital -- the Motor City -- of the world.

"The Big Three will find their way out to be viable and competitive once again," he goes on. "[They] Must have products people want to buy. Whether you're in television or in automotive, create products the public must buy as well as promote their value. Keep selling the value of our state and city."

 

PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

About 500 people attended this meeting of the DEC inside the Westin Book Cadillac Hotel.

 

PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

Detroit Economic Club President & CEO Beth Chappell welcomes everyone to the meeting.

 

PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

Stephen R. Polk was the presiding officer of the meeting.

 

PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

Polk is also the Chairman, President & CEO of the R.L. Polk & Co.

 

PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

Keith Crain speaks to the Detroit Economic Club on Thursday.

 

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