NY Times cites Detroit as ‘economic bright spot’

The New York Times says that the remarkable turnaround of the Big Three automakers is turning Detroit from a city of despair into an “economic bright spot” at a time when the national economy struggles to go from recession to recovery. Citing a “growing sense that the changes are turning the Big Three around,” the Times notes:

Ford made more money in the first six months of this year than in the previous five years combined. G.M. is profitable and preparing for one of the biggest public stock offerings in American history. Even Chrysler, the automaker thought least likely to survive the recession, is hiring new workers.

Many of the excesses of the past — overproduction, bloated vehicle lineups, expensive rebates — are gone. All three carmakers have shed workers, plants and brands. And a new breed of top management — the three chief executives are outsiders to Detroit, as is the newly named G.M. chief executive — says it is determined to keep the Big Three lean, agile and focused on building better cars that earn a profit.

“What we’ve come out of this with,” said Sergio Marchionne, who runs both Chrysler and its Italian owner Fiat, “are much more rational, more grounded players making moves for the long term.”

The article also points out a possible cloud in this silver lining. Contract talks begin next year on a new agreement with the UAW, which could “revive old hostilities.” Let’s hope that management and labor work together at the bargaining table to keep the American auto industry on a path to long-term sustainability.