Motown blues

26 April 2012 By Antony Currie, Agnes T. Crane Follow @AntonyMCurrie

Motown’s carmakers have roared back to life – Chrysler just posted a $473 mln Q1 profit. But there’s no such joy for Motor City itself. It’s plagued by debt, decay and despondency. Emergency cash can help. But Detroit really needs to attract new businesses. That’s a long road.

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Chrysler reported first-quarter net income of $473 million on April 26, more than four times what the auto company earned in the same period last year.

Fitch Ratings raised Ford’s credit rating to investment grade on April 24, ending more than six years as a junk-rated company. Fitch cited a significantly improved financial situation and balance-sheet repair as factors behind the upgrade. Moody’s Investors Service and Standard & Poor’s still rate the carmaker at junk levels.

At the end of the 2011 fiscal year, Detroit was running a $196.6 million deficit in its general fund. The city and the state of Michigan entered into a consent agreement in early April by which the state’s government has greater oversight of Detroit’s finances.

Detroit Mayor David Bing intends to cut nearly a quarter of the city’s workforce in an effort to trim $250 million from the budget, according to details released April 23. The fire department’s ranks would be slimmed by 162 positions compared with the previous year’s budget while the police force would lose 353 spots, or about 10 percent of those budgeted for the previous year.

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Chrysler reported first-quarter net income of $473 million on April 26, more than four times what the auto company earned in the same period last year.

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