Economy

As the sun goes down in Motown

Murali Gopalan Recently in Detroit | Updated on July 01, 2011

FORD



As I wheel my bags out of Detroit Metro Airport, a feeling of disbelief grips me. To think this is Motown, home to the formidable trio of General Motors, Ford and Chrysler.

In high school, my generation was bedazzled reading the exploits of Lee Iacocca and Alfred Sloan. Wow, I tell myself, this is something else and pinch myself real hard.

The driver of the bus brings me back to reality with a bang. “Property prices have crashed in Detroit. It will take years before there is even a semblance of a recovery,” she says wryly. As we drive towards the hotel, I am lost in thought. The 2008 slowdown literally paralysed Detroit with GM and Chrysler staring at a complete wipe-out. Ford survived but this was hardly any cause for cheer as thousands of jobs were lost.

Turnaround of fortunes

Today, thanks to the US Government's intervention, GM is back in the black and a rejuvenated Chrysler gets set for a more hopeful future. The grim truth, though, is that this has not translated into a turnaround of fortunes in Detroit. GM is now putting a lot of money into China where it is the market leader while Chrysler is in the hands of a new owner, Fiat. Ford, likewise, is working aggressively on an Asia-Pacific plan with China and India as priority investment zones.

Later in the evening, as we drive past Ford headquarters, it is almost surreal. To think that this iconic brand was one of the biggest movers of the 20th century. There is no question that it is still going strong but its focus has clearly shifted beyond the geographies of the US.

Is America an empire in decline, I wonder. The answer comes through loud and clear at a green car conference the following day when almost all the participants speak of China in glowing terms. Strangely, there is hardly any reference to India which is understandable given that we still have not embraced the concept of electric cars, the core theme of the conference. “A lot of us here continue to live in a state of denial and refuse to accept that the centre of gravity has shifted to Asia. The illusion about the great American dream still persists,” a friend fills me in over dinner at a restaurant in Troy, Michigan.

Tamil Nadu, a new Detroit

Carmakers such as Hyundai and Toyota clearly have an edge in the US market where the harsh reality of high fuel prices is sinking in. Despite that, rues my companion, people continue to drive in monstrous gas-guzzling SUVs.

Back home, Tamil Nadu is now being spoken of as the new Detroit of South Asia. A professor in an American university urges me not to get carried away with all this hype. “India may have thousands of engineering colleges but the quality of education continues to be abysmal. You have a very serious issue there,” he says.

The message is loud and clear: make sure all key fundamentals are in place before crowing about your new place in the sun.

And that reminds me, the sun is still bright in Detroit at 9.30 pm. But it has sure set perceptibly on Motown even while everyone hopes for a better tomorrow. For the moment, the 21st century clearly belongs to Asia.

Published on July 01, 2011

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