Even as Detroit, the acclaimed auto hub of the world, has filed for a US $19 billion bankruptcy protection, Canada, China, Mexico and India have emerged as major alternative hubs for auto manufacture. Facilities in Gujarat, Maharashtra and TN propel India to pole position in the auto race.
Motown’s slide has been pathetic. Today only 700,000 people inhabit Detroit, which is less than half its 1990 population. Unemployment rate is 18 per cent and the city’s per capita income is down to US $ 15,000 per annum as compared to US $ 46,000 for Seattle. The city has been living with the tag of ‘Most Dangerous City in the World’ for the last 20 years. Motown has only one operating plant today. Chennai makes more cars than Detroit.
The bankruptcy filing will have to be first approved by a bankruptcy judge which gives the auto makers enough time to reorganise their finances by selling some of its assets and renegotiate contracts with the workers.