Detroit filed bankruptcy, which may force creditors to settle with less than they are owed in order to resolve $18 billion in city debt.
Detroit was once synonymous with U.S. manufacturing prowess. The auto industry switched to making planes, tanks and munitions during World War Two, earning the city the nickname of the “Arsenal of Democracy.”
Now a third of Detroit’s 700,000 residents live in poverty and about a fifth are unemployed.
"Maybe bankruptcy will help. I don’t know," said lifelong Detroiter Damien Collins, 68, outside his east-side house surrounded by abandoned homes. The retired autoworker said he had given up hope anything would bring back Detroit. "Nothing else has worked, so why not try it?" he asked.
The murder rate is the highest in nearly 40 years, only a third of its ambulances were in service in the first quarter of 2013 and nearly 78,000 abandoned buildings create “additional public safety problems,” Michigan’s governor Rick Snyder wrote.
Forty percent of street lights were non-functional in the first three months of this year, while the police took an average of 58 minutes to respond to emergency calls, more than five times the national average. The city government has been plagued by mismanagement and corruption.
John Stoll for Reuters - While car companies thrive, Detroit continues to bleed. Saddled with a crippling debt load, mounting labor costs and onerous union contracts, the city that paved the auto industry’s success is in need of a bailout of its own.