The city of Detroit has temporarily tapped out. In this case, municipal bankruptcy is more than just relief from debt obligations; it represents a huge psychic wound for the heart of American industry. Michigan makes things. So how could it have gotten this rough?
It’s bad, but there is hope. The Big Three, only a few years out of their deathbeds, are back in the black. GM, Ford, and Chrysler have produced profits that measure in the billions, despite the prewritten obituaries that appeared in 2009.
Despite their turnaround, the Big Three still face significant hurdles in getting their goods into Japan, and face import competition subsidized by currency manipulation. In fact, imports from all countries, including the U.S., account for only 6 percent of Japan’s auto market. Meanwhile, America has one of the most open auto markets in the world.