Detroit was once the car manufacturing capital of the world. Now it has gone bankrupt. Corporates run with their investment to a place giving higher profits and desert the place once that attraction is over.
What about the future of Chennai which is called Detroit of India as it attracted major car makers? What about the IT outsourcing industry?
Chennai on Detroit path
Chennai is said to be Detroit of India . Does that mean growth path or decline path ?
Let us explore Detroit’s current status as of now
- A significant percentage of housing parcels in the city are vacant, with abandoned lots making up more than half of total residential lots in large portions of the city. With at least 70,000 abandoned buildings, 31,000 empty houses, and 90,000 vacant lots, Detroit has become notorious for its urban blight.
- While Detroit’s population had declined from a peak of 1.8 million in 1950, its July 2013 population was reported by The New York Times as a city of “700,000 people, as well as to tens of thousands of abandoned buildings, vacant lots and unlit streets.
- The city of Detroit, Michigan, filed for Chapter 9 bankruptcy on July 18, 2013. It is the largest municipal bankruptcy filing in U.S. history by debt, estimated at $18–20 billion
The municipality of Detroit had a 2016 estimated population of 672,795, making it the 23rd-most populous city in the United States.
Let us take a look in to population for last 200 years and relook in to history.
Why population is on decrease ? Is population of 15 Lakh in 1940 reached 7 Lakh in 2010 ?
|U.S. Decennial Census|
The loss of industrial and working-class jobs in the city has resulted in high rates of poverty and associated problems.
The city’s population increased more than sixfold during the first half of the 20th century, fed largely by an influx of European, Middle Eastern (Lebanese, Assyrian/Chaldean), and Southern migrants to work in the burgeoning automobile industry. In 1940, Whites were 90.4% of the city’s population.
Detroit remains one of the most racially segregated cities in the United States. From the 1940s to the 1970s a second wave of black people moved to Detroit to escape Jim Crow laws in the south and find jobs
Several major corporations are based in the city, including three Fortune 500 companies. The most heavily represented sectors are manufacturing (particularly automotive), finance, technology, and health care.
|Detroit’s Curse Of High Inventories
If anything good is coming out of the sales collapse in the auto industry, it’s the reduction in inventories: Those stocks of unsold cars and trucks in dealers’ showrooms and lots around the country.
They’ve been a curse on the industry–particularly Detroit’s side of the business, for years.
First, let’s see the numbers:
AUG 25, 2009 @ 12:00 AM
Too young to retire, unable to work
One way to focus on Michigan’s long-term challenges is to zero in on that “missing” 250,000 or so jobs that existed in 2000.
Detroit couldn’t compete with education of other Amazon finalists
Amazon to Detroit: You didn’t have enough talent to get HQ2
Amazon’s feedback helps clarify, at least to some extent, Amazon’s decision to leave Detroit off its short list of 20 finalist cities for its second headquarters.
If talent was the big issue for Amazon with Detroit’s bid, let’s not forget the transit issue. Amazon made clear in its initial request for proposals that it wanted a city with a robust public transportation network for its employees to use. Detroit’s lack of the sort of light rail systems available in so many of the finalist cities — Chicago, New York, Boston, Washington, D.C., Toronto — remains telling.
Positive thing for the car makers
- With over 100 years of history, Ford is one of the most well known companies in the world. As a company, Ford changed the way that manufacturing companies are operated. Although the company was hit by hard times during the 2008 financial crisis, Ford has shown an upside with its turnaround story.
- GM and its joint-venture partners sell more than 1 million vehicles in China for the first time in 2008. GM announces that the Chevrolet Volt will go into production within two years. Assembly is expected to occur at the Detroit-Hamtramck plant. GM announces record-setting sales in China and Eastern Europe. General Motors Corp. (GM, Detroit) has a unique manufacturing heritage. For most of the 20th century, the company ranked as the world’s largest manufacturer.
But what’s happening to Detroit in last 50 years ?
- High crime rate
- Abandoned Buildings
- Emigration for 50 years from 1940.
- Effects of the 2008–10 automotive industry crisis on the United States
Now the question is ….
Will Chennai have same fate as above ?
Is Chennai going for same footpath with more export of cars to world with effects of exploitation of Air, water and Labour in Tamilnadu and Rest of India ?
|Chennai has a very strong “manufacturing” base for auto components; several of the manufacturers have 40 years track record. This made Chennai the Detroit of India in the 1970s. When car assemblers set up shop in India they found the strong component industry and equally strong pool of engineering talents of Chennai an advantage. Today Chennai counts several big ticket car companies’ assembly plants in the city including: Mercedes Benz, BMW, Ford, Hyundai, Mitsubishi; big ticket truck companies including Leyland; and a multitude of component manufacturers (engine blocks, wheels, brakes, axles, etc).
Chennai is home to global and Indian auto majors like BMW, Ford, Hyundai, Mitsubishi, Nissan, Ashok Leyland, TVS Group, et cetera. It also has almost 35 per cent of India’s share of auto ancillary units.
So why has Chennai emerged as the Detroit of South Asia? There are many reasons, not the least of which is the Tamil Nadu government’s investment-friendly industrial policy.
With an impressive growth of 26.42 per cent last year, India is the second fastest growing auto market in the world, next only to China that grew at a scorching 42 per cent.
List if Industries in Chennai
2. “Ashok Leyland and Nissan LCV plant location at Pillaipakkam”. Business Standard. September 8, 2008. Retrieved 28 August 2014.
3. “BMW Chennai facility goes on stream”. The Hindu. Retrieved 28 August 2014.
4. “Daimler to roll out buses from Chennai plant”. The Hindu. March 6, 2014. Retrieved 28 August 2014.
5. “Ford looking to achieve full capacity; plans to expand soon”. The Hindu Business Line. April 7, 2011. Retrieved 29 August 2014.
7. “Hyundai to roll out new car from second plant”. The Hindu Business Line. September 19, 2006. Retrieved 30 August 2014.
8. “Hyundai to produce 6 lakh cars in 2008”. Business Standard. 4 February 2008. Retrieved 30 August 2014.
9. “Chennai Car Plant (CCP) – Tiruvallur”. Hindustan Motors. Retrieved 30 August 2014.
10. “Factory Tour, Royal Enfield”. Factory Tour – Royal Enfield. Retrieved 28 August 2014.