US carmakers General Motors Co. and Chrysler Group have issued statements of support for the City of Detroit, which recently disclosed that it is defaulting on a $2.5 billion debt to avoid bankruptcy. Detroit-based GM operates one major manufacturing site in the city while Chrysler has two assembly plants within city boundaries.
Chrysler, which is headquartered in nearby Auburn Hills, said in a statement that it “firmly believes in the City of Detroit and its people, as evidenced by our continued investment in the city and its residents." In 2012, Chrysler shifted around 70 employees to the former Dime Building in downtown Detroit, after leasing the top two floors and renaming it Chrysler House.
Greg Martin, a spokesman for GM, said in an e-mail to Bloomberg, that they hope “all parties can come together and take action to build a stronger city.” He noted that a healthy auto industry will play a role in “Detroit's comeback story and GM is doing its part."
Detroit Emergency Manager Kevyn Orr announced Friday that the city would suspend payments on $2 billion of unsecured debt, starting with $39.7 million owed to fund pensions.
He also announced a reorganization plan that entails establishing a regional water agency to take the stead of its municipally owned department. Under the plan, pensions of active and retired workers would be reduced. The plan also called for spending of $1.25 billion over a decade to improve services and create a more livable community. [source: Crain's Detroit]