Motor City is reinventing itself
October 2020

Motor City is reinventing itself

From an automotive hot spot to a mobility hub – after its bankruptcy, will Detroit manage to resurrect itself as a North American high-tech center? The prospects are positive.

Practically any automobile enthusiast is familiar with Detroit, the American metropolis between Lake Eerie and Lake St. Clair. From Detroit the Big Three, Chrysler, Ford and General Motors, dominate the automotive world until far into the 20th century. In Detroit, in 1913, Henry Ford makes industrial history by introducing mass production of the Ford Model T on a moving assembly line. In Detroit, tens of thousands of immigrants from Europe in search of work arrive at Michigan Central Station that was completed in 1913 (see infobox).

Detroit’s boom continues after the Second World War. Good money can be made in the busy industrial halls. Thanks to the prospering automotive industry, a solid middle class emerges in “Motor City.” In the early 1950s, Detroit has a population of 1.8 million that makes the city the fifth-largest one in the United States – today, it doesn’t even have 700,000. The decline of Detroit happens almost overnight. Following severe race riots in 1967, hundreds of thousands of well-paid whites move away from the city center. The oil crisis in the 1970s exacerbates the exodus: demand for the typical American V8-powered gas guzzlers from Ford, Chrysler and General Motors massively drops while the competition from Europe and especially from Japan is becoming stronger and stronger. Increasing automation costs further jobs. Especially the downtown area goes to rack and ruin – Motor City morphs into a metaphorical dirty old town.

Numerous rescue attempts

The former heavyweight has been hard hit. Detroit is tumbling, but Detroit won’t give up. Various rescue attempts follow. In 1977, Henry Ford II opens the impressive Renaissance Center. The huge complex is intended to attract the arts and business and to breathe life into the downtown area – without success. In 1987, Detroit demonstrates innovative prowess as one the first cities worldwide to build a fully automated elevated people mover system. It’s still traveling above plenty of bleakness. Around the turn of the millennium, Detroit tries its luck at becoming a gamblers’ paradise by opening three casinos. If nothing else, more than 100 million dollars in tax revenue from the money blown there end up in the city’s coffers. This slows the downward spiral, but won’t stop it: Detroit continues to perish. In 2008, during the financial crisis, homes can be bought for the pittance of 100 dollars. But who wants to live in Detroit! In the years of the crisis, the U.S. federal government has to ward off the specter of bancruptcy looming over General Motors and Chrysler with a multi-billion-dollar bailout. Ford mortgages nearly all of its domestic assets and even pledges its logo to raise money. This and the government bailouts keep the ailing Big Three alive, but Detroit’s situation remains shaky. In 2013, the city topples and files for bancruptcy: a shock and perhaps exactly the loud and clear wakeup call the people of Detroit needed for a collective relaunch.

Motor City is reinventing itself
An early harbinger of Detroit’s transformation from an automotive to a mobility center: the fully automated elevated Detroit People Mover that was officially opened in 1987
A stimulating shock

The relaunch is also based on the fact that deprived Detroit has something to offer at a much lower price than other big cities: real property. Whether wasteland, industrial halls or residential buildings: the city government is still auctioning abandoned buildings with minimum bids set at 1,000 dollars. Artists find affordable studios, exhibition and practice facilities. They’re following in the footsteps of famous performers such as Diana Ross, who was born in Detroit, and Michael Jackson, who made his debut there in 1969. Another tradition is being revived as well: industrial design. In 2015, Detroit is the only city in the United States to be named a City of Design by the UNESCO and joining the Creative Cities network. “The industry of design has been a driver for the city’s urban regeneration and represents today a significant lever for employment and an economic engine by employing more than 45,000 people and generating 2.5 billion U.S. dollars in wages,” the UNESCO praises Detroit.

Along with the arts young, hip and, above all, highly educated people are moving to Motown, which is Detroit’s second nickname from the glorious 1950s. Plus, intellect and innovation bring money to the city as well. Detroit billionnaire Dan Gilbert, for instance, is actively engaged in revitalizing the desolate city center with its ornate office towers from the 1920s – with lots of money and success. Now tourists overnighting in carefully restored or newly built hotels are again strolling along the once-famous boulevard of Woodward Avenue. In addition, Gilbert founds the Detroit Ventures incubator in 2010. With ambitious aims. The tech startups supported by him and his partners are intended to do no less than “move the world forward.”

Since, as everyone knows, one dollar tends to be joined by a second dollar, another billionnaire, Stephen Ross, makes a commitment to Detroit’s resurrection. At the beginning of this year, the tycoon who’s known as a philanthropist donates 100 million dollars to support the construction project of the University of Michigan’s Detroit Center for Innovation. Dan Gilbert contributes the land, which used to be the site of a jail. Digital transformation instead of iron bars – construction is scheduled to start in 2021. “Detroit has always been an incredible place of innovation and opportunity,” enthuses Ross, who went to school and university in Detroit, “and the Detroit Center for Innovation will usher the city into a new era of leadership in technology.” Mayor Mike Duggan expects the future innovation center that’s planned to combine research, teaching and entrepreneurship to become the beacon of a Detroit 2.0.

© Getty, Ford
Mobility across land, air, sea & space

Innovative startups that were either established here or attracted by a digital gold rush that’s in the offing in Motor City are already starting to sprout: potential skyrocketers such as Karamba Security, Derq and Guardhat. While Karamba Security develops security software in motor vehicles and IoT control units, Derq is dedicated to making precise predictions of traffic movements using artificial intelligence: an important element for smart roads and autonomous vehicles. Guardhat is focused on the utilization of highly sensitive electronics as well. The company’s novel wearables warn operators and personnel of hazardous areas, for instance in automated production facilities.

Chris Thomas is one of the people who firmly believe in Detroit and its transformation from a crashed auto to a high-tech mobility town. The entrepreneur, who grew up in Waterford, one of Detroit’s many suburbs, and used to be a Ford executive for a number of years, is almost euphoric: “I want to found and bring the most dynamic mobility start-ups in the world to Detroit. Metro Detroit is the deepest transportation technology cluster in the world and is perfectly positioned to leverage their current assets to create the future of mobility across land, air, sea and space.”

Thomas recently co-founded the Assembly Ventures incubator, in which Berlin venture capital specialist Felix Scheuffelen is engaged as well. It is generally notable that the Detroit innovation drivers like to network with other tech hot spots such as San Francisco, Tel Aviv, London and Dubai.

Chris Thomas is also on the team of the Michigan Mobility Institute that’s planning to offer the first Master of Mobility program together with select university partners starting in 2021. The idea behind this is clear: in addition to cash and courage, innovative companies need a large talent pool of experts in artificial intelligence, robotics, cyber security and similar fields.

Central station for the journey into the future of mobility

When Michigan Central Station is officially opened in Detroit’s Corktown district in 1913, the mammoth building, due to its add-on office tower, is the tallest train depot building in the world. In the wake of the automobile’s rise after the Second World War, the importance of this impressive cathedral of mobility begins to fade. In 1988, the last train leaves the tracks. In the following years, a number of investors’ flights of fancy start haunting the abandoned architectural monument: a casino, a police station, a cultural center – many ideas for its new utilization are born, and none of them put into action. Even the demolition that’s decided in 2009 fails. In 2018, Ford acquires the building that by then has fallen into disrepair and develops great plans for it: starting in 2022, Michigan Central Station is intended to become the centerpiece of a 1.2-million-square-foot (111,500 m²) innovation hub for which additional old buildings will be repurposed and new ones built. The construction work has long begun and Ford is planning to invest 740 million dollars in its Corktown Campus in the coming years. 2,500 Ford employees and a similar number from partnering companies are planned to create the future of mobility there. Recently, a project partnership with the New Lab tech incubator that is currently supporting 155 startups was announced. In addition to offices, plans for Corktown include retail spaces, apartments, parks and community facilities to develop the city’s oldest district into its most dynamic one. Mayor Mike Duggan hopes that the revival of Detroit’s landmark will inspire other projects of similar magnitude and thus make it a symbol of the city’s comeback.

  • Michigan Central Station in the year of its inauguration
    Michigan Central Station in the year of its inauguration © Getty
  • When Ford buys the building in 2018, it’s practically in ruins
    When Ford buys the building in 2018, it’s practically in ruins © Ford
  • The current view of Michigan Central Station’s north side ...
    The current view of Michigan Central Station’s north side ... © Getty
  • ... and from the southeast
    ... and from the southeast © Getty
  • The digitally retouched image shows its actual state in 2018 and what it’s plann ...
    The digitally retouched image shows its actual state in 2018 and what it’s planned to look like in 2022 © Ford
  • This is what the platform to the elevated tracks could look like later
    This is what the platform to the elevated tracks could look like later © Ford
  • Numerous modernizing projects and new buildings are planned for the entire area
    Numerous modernizing projects and new buildings are planned for the entire area © Ford
Big business has fallen in love with Detroit again, too

However, college grads aren’t just in demand for the purpose of driving the success of startups. Large corporations need young, highly educated innovation drivers for growth as well. Fiat Chrysler is investing two billion dollars in its plant in the eastern part of Detroit, creating 4,000 jobs. The telecommunications company Verizon has launched its 5G network in collaboration with the University of Michigan and is developing various 5G solutions in Detroit to enhance automotive and pedestrian safety. They include 5G cameras that identify traffic and pedestrian patterns in order to avoid collisions.

Japanese electronics giant Panasonic intends to grow at the automotive site in nearby Farmington Hills that the company moved into in 2012. Tom Gebhardt, then President of Panasonic Automotive Systems Co. of America, commented on the move: “Reaffirming our commitment to the region, Panasonic Automotive’s position is to take advantage of the deep talent pool located in Southeast Michigan as we seek to further expand our business.”

Irish connectivity provider Cubic Telecom recently opened an office in Detroit in order to be close to customers from the mobility world. New colleagues are planned to soon join the initial team of five. In a press release announcing the new office, the company refers to a statement by Detroit Mobility Lab: “Detroit is poised to become the epicenter for mobility in the US.”

Ford is another company leaving no stone unturned to make this vision a reality. In 2018, the reinvigorated auto giant bought the run-down Michigan Central Station, planning to establish an innovation center for testing mobility solutions there and in the nearby Corktown district (see infobox). Concurrently, Ford is turning its 66-year-old development center in the Dearborn suburb inside out. After completion of the Campus of the Future, more than 20,000 employees are planned to work in a flexible, high-tech environment on creating new mobility solutions including electrified bicycles, scooters and shuttles.

Maybe Detroit will make history again – albeit a totally different, a digital one.

Carsten Paulun
Author Carsten Paulun
As head of the motoring editorial teams of BILD and BILD am SONNTAG Carsten Paulun has traveled to the Detroit Motor Show, to interviews and car tests on countless occasions since the 1990s and been keeping track of Detroit’s equally countless revival attempts. He’d be happy for the city and particularly for its friendly and spirited people if it all worked out this time.