Chrysler, Dodge, and Jeep news from Allpar

Detroit: bankrupt (updated)


Today, Detroit became the largest American city to file for bankruptcy, a rare occurence. Despite attempts to fix the city’s finances and some success in attracting new businesses, a declining industrial base, high crime in some areas, fixed expenses, and allegedly rampant corruption have all brought large deficits. The move was made by the city’s emergency manager, Kevin Orr, appointed by Governor Rick Snyder, to deal with $2.5 billion in unsecured debt and a deficit estimated at $380 million; Orr claimed that total long term debt was likely over $17 billion.

The emergency-manager law, criticized by some after other managers appeared to be rewarding campaign donors at the cost of the cities they managed,  allows the governor to appoint a single city leader with wide powers. The law essentially removes all power from elected councils and mayors. Mr. Orr has, however, generally been seen as sincere, and tried to convince creditors to agree to take less money than they were owed, to avoid a bankruptcy. He staged a bus tour of the city’s devastated areas, empty lots, burned-out houses, and abandoned factories, to try to convey the situation to the financial leaders. Before being put in charge of Detroit, he represented Chrysler during its own bankruptcy.

The move comes after a coalition of local businesses donated money and vehicles to help Detroit stay afloat (including the police cars shown above), and after numerous other cost cutting measures.  However, over the course of ten years, from the 2000 census to the 2010 census, the population dropped by around 250,000 people; the city once held nearly two million residents, but has dropped to 700,000. Some neighborhoods of Detroit were well known for their high crime; restaurants served food through bulletproof glass.

The city is likely to slash pensions for retired policemen, firemen, and other employees; assets are likely to be sold. Under Orr’s June proposal to unions, pension funds, long underfunded, would become even more so, taking under 10 cents on the dollar. Technically, pension and retiree benefits are guaranteed under state law, but Mr. Orr said that bankruptcy law would take over, rendering benefits void. This may make it harder to attract qualified emergency personnel, and is likely to result in at least some retirees losing their homes, as the bankruptcy court judge could divert remaining pension funds to other creditors.

Finance experts said both that the filing would not affect other cities, and that other cities would need to pay a hazard premium on their loans.

General Motors issued a statement saying that the bankruptcy would not affect their operations. Chrysler, which operates two assembly plants and two component plants in the city (Conner Ave./Viper, Jefferson Ave./Grand Cherokee and Durango, Mack Ave./engines, Outer Drive/tools and dies), has not yet done so, but is likely to do the same.

Discussion link

Chrysler financials coming

Chrysler will host a webcast and analyst conference call to review and discuss second-quarter 2014 financial results on August 11, 2014, at...

Viper wins Toronto race

Kuno Wittmer Viper 92

Canadian Dodge Viper driver Kuno Wittmer went from second place in the first race to first place in the second, during the...

Last week’s out-of-mind experience: a Fiat-VW merger


The offices of Germany’s Manager Magazine must reek of illicit odors or perhaps business editor Wilfried Eckl-Doma has forsaken the country’s marvelous...

Mopar extends Mile-High sponsorship


Mopar will continue to be the title rights sponsor of the NHRA Mile-High Nationals at Bandimere Speedway in Morrison, Colorado through 2018....

Categories: Chrysler Chat.

New vehicle recalls for Chrysler, Jeep & Ram
New Hellcat trivia
Chrysler financials coming Kuno Wittmer Viper 92
Viper wins Toronto race

Chrysler Cars at Allpar

Recent Chrysler News

Please read the terms of use! Information is presented to the best of our knowledge. Plans change and sometimes mistakes are made. Any decisions or purchases made based on this site's verbiage or images are done at the reader's own risk. * Mopar, Dodge, Jeep, Chrysler, HEMI, and certain other names are trademarks of Chrysler, LLC. We are not Chrysler. We are not responsible for the consequences of actions taken based on this site and make no guarantees regarding validity or applicability of information or advice. The Webmaster is not an expert. Copyright © 1998-2000, David Zatz; copyright © 2001-2013, Allpar LLC. All rights reserved.