Autoline on Autoblog with John McElroy
by John McElroy on Feb 27th 2009 at 7:26PM 
THE AMAZINGLY STUPID DETROIT CITY COUNCIL
Nobody reading this blog needs to be told how much trouble Detroit is in. Whether it's the Detroit Three, the city of Detroit, or the greater Detroit area, the story's the same: we're in trouble!
One of the very few events that provides positive media coverage for Detroit every year is the North American International Auto Show. I'd rate it as one of the top three auto shows in the world. It brings in thousands of members of the media, as well as executives from automakers and suppliers in Europe and Asia. They fill up every hotel for a 40-mile radius. Thanks to the exhibits that get built, the special events that are held, all the restaurant meals that are ordered and all the taxi rides needed to get around, the show brings in a half billion dollars of desperately needed economic activity every year.
The show is held in Cobo Hall, which was built in 1960. Everyone has known for years that it needs to be renovated and expanded, but that's going to take several hundred millions of dollars and the city is broke.
So it's taken years to carefully craft a deal that involves the governor, the state Senate and House, three different county executives, as well as the mayor and the city council of Detroit. But in a stupefying move at the 11th hour, the city council voted 5 to 3 to reject the deal.
John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
Make no mistake about it, there are deep racial overtones involved in all of this bickering. Those rejecting the deal portray it as the evil white power elite swooping in to rob the poor black city of yet another one of its crown jewels.
Now, in case you don't know, the Detroit City Council has got to be one of the most inept, incompetent, dysfunctional and corrupt political bodies in the nation. Several council members and some of their aides are currently under investigation by the FBI for bribery, including Monica Conyers, the president of the council. She led the charge to kill the deal to renovate Cobo, claiming the city was getting a raw deal.
Most of that deferred maintenance has to do with the electrical in the building. My sources tell me that under the Kilpatrick administration (that's the former mayor who went to jail involving yet another scandal) a contract was awarded to redo all the wiring in Cobo, but that the job was completely botched and has to be redone. (Oh yeah, I almost forgot to mention that the last two managers of Cobo pleaded guilty to bribes and kickbacks!)
This is why the deal to renovate Cobo involves taking it away from the city and letting an independent authority run it. My sources tell me that under the independent authority that $25 million operating loss could instantly be cut to only one or two million. A key reason: the authority would be free to fire and hire until they find the kind of people who will put in an honest day's work.
The whole place is out of control. I'm told that on a dollar-per-square-footage basis, Cobo is the most expensive convention center on the auto show circuit. That's not just comparing it to New York, Chicago or LA. It's more expensive than Frankfurt, Paris or Tokyo!
You want a chair in your display? That'll cost you $75. You want a table? That's a hundred bucks. That's not to buy them, that's just to set them up.
This is a key reason why most exhibitors hate dealing with Cobo. Automakers complain to me they feel like they're dealing with an enemy that barely tolerates doing business with them. There is no sense of urgency and the place is Exhibit A for its "can't do" attitude.
And so, exhibitors are voting with their feet. Porsche, Suzuki, Nissan, Infiniti, Mitsubishi, Land Rover, Rolls-Royce and Ferrari have all pulled out of the show. And it could get worse. Mercedes, BMW and VW are only committed for one more year – all thanks to our amazingly stupid city council.
Or mostly stupid, I should say. There are several thoroughly competent, honest council members who are doing their level best to help the city. We also have two solid candidates in the runoff to elect a new mayor. I'm pinning my hopes on them. Otherwise we can kiss the auto show goodbye.
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Nobody reading this blog needs to be told how much trouble Detroit is in. Whether it's the Detroit Three, the city of Detroit, or the greater Detroit area, the story's the same: we're in trouble!One of the very few events that provides positive media coverage for Detroit every year is the North American International Auto Show. I'd rate it as one of the top three auto shows in the world. It brings in thousands of members of the media, as well as executives from automakers and suppliers in Europe and Asia. They fill up every hotel for a 40-mile radius. Thanks to the exhibits that get built, the special events that are held, all the restaurant meals that are ordered and all the taxi rides needed to get around, the show brings in a half billion dollars of desperately needed economic activity every year.
The show is held in Cobo Hall, which was built in 1960. Everyone has known for years that it needs to be renovated and expanded, but that's going to take several hundred millions of dollars and the city is broke.
So it's taken years to carefully craft a deal that involves the governor, the state Senate and House, three different county executives, as well as the mayor and the city council of Detroit. But in a stupefying move at the 11th hour, the city council voted 5 to 3 to reject the deal.
John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
Make no mistake about it, there are deep racial overtones involved in all of this bickering. Those rejecting the deal portray it as the evil white power elite swooping in to rob the poor black city of yet another one of its crown jewels.
Now, in case you don't know, the Detroit City Council has got to be one of the most inept, incompetent, dysfunctional and corrupt political bodies in the nation. Several council members and some of their aides are currently under investigation by the FBI for bribery, including Monica Conyers, the president of the council. She led the charge to kill the deal to renovate Cobo, claiming the city was getting a raw deal.
The Detroit City Council has got to be one of the most inept, incompetent, dysfunctional and corrupt political bodies in the nation.
But what Conyers and her council cohorts conveniently fail to inform their followers is that Cobo Hall is a financial basket case. Every year it loses about $25 million in operating costs. The city still owes $110 million in bonds on the building, which also needs $200 million to pay for deferred maintenance costs. The deal to redo Cobo would take all this off the city's books.Most of that deferred maintenance has to do with the electrical in the building. My sources tell me that under the Kilpatrick administration (that's the former mayor who went to jail involving yet another scandal) a contract was awarded to redo all the wiring in Cobo, but that the job was completely botched and has to be redone. (Oh yeah, I almost forgot to mention that the last two managers of Cobo pleaded guilty to bribes and kickbacks!)
This is why the deal to renovate Cobo involves taking it away from the city and letting an independent authority run it. My sources tell me that under the independent authority that $25 million operating loss could instantly be cut to only one or two million. A key reason: the authority would be free to fire and hire until they find the kind of people who will put in an honest day's work.
The whole place is out of control. I'm told that on a dollar-per-square-footage basis, Cobo is the most expensive convention center on the auto show circuit. That's not just comparing it to New York, Chicago or LA. It's more expensive than Frankfurt, Paris or Tokyo!
Cobo is the most expensive convention center on the auto show circuit.
You want a chair in your display? That'll cost you $75. You want a table? That's a hundred bucks. That's not to buy them, that's just to set them up.
This is a key reason why most exhibitors hate dealing with Cobo. Automakers complain to me they feel like they're dealing with an enemy that barely tolerates doing business with them. There is no sense of urgency and the place is Exhibit A for its "can't do" attitude.
And so, exhibitors are voting with their feet. Porsche, Suzuki, Nissan, Infiniti, Mitsubishi, Land Rover, Rolls-Royce and Ferrari have all pulled out of the show. And it could get worse. Mercedes, BMW and VW are only committed for one more year – all thanks to our amazingly stupid city council.
Or mostly stupid, I should say. There are several thoroughly competent, honest council members who are doing their level best to help the city. We also have two solid candidates in the runoff to elect a new mayor. I'm pinning my hopes on them. Otherwise we can kiss the auto show goodbye.
###
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Reader Comments (Page 1 of 2)
Jim 7:43PM (2/27/2009)
Spot-on analysis, sir.
Reply
Jim 7:49PM (2/27/2009)
Oh, by the way:
"Those rejecting the deal portray it as the evil white power elite swooping in to rob the poor black city of yet another one of its crown jewels."
yes, indeed, from here: http://detnews.com/apps/pbcs.dll/article?AID=/20090224/METRO01/902240410
"(Barbara-Rose) Collins, though, implored the city to look to U.S. Sen. Carl Levin D-Detroit, Obama and other national leaders to write legislation that would send money straight to Cobo and bypass the "racist" Legislature in Lansing."
Yes, it's totally racist that the City of Detroit has totally mismanaged the facility.
Someone better clue these morons in to the fact that when you're asking for help, you don't get to dictate terms.
Reply
Len_A 11:41AM (2/28/2009)
The city government for Detroit mismanages everything they get their hands on, and bring down the reputation of the whole area. Barbara-Rose Collins and Monica Conyers both need to STFU.
Jay Evans 7:50PM (2/27/2009)
"Conyers and other opponents argued Detroit isn't getting enough -- $20 million -- to give up a prime riverfront real estate and preference for city contracts at the facility."
The graft, the graft....
Reply
Joe Black 8:18PM (2/27/2009)
Why do you continue to believe that you need a auto show in city in which the auto industry has self-imploded? Like having a steel show in Pittsburgh...industry and mills are gone. The "other" companies are going vote for location that is more in line with them and new automotive order...they want great location, good consumer traffic, nice convention centre and not a mile from the Arctic circle in the middle of winter.
Reply
Jim 8:46PM (2/27/2009)
"Why do you continue to believe that you need a auto show in city in which the auto industry has self-imploded?"
As opposed to having shows in cities which have nothing to do with the auto industry (LA, NY, LV?)
"Like having a steel show in Pittsburgh"
A what? Is that like a "Jerk Store" or something?
Stump556 8:58PM (2/27/2009)
@ Jim
Come on, it's a trade show, for all auto makes, not just the Big 3. Having it in a city that has nothing directly to do with the auto industry doesn't matter. The facilities and amenities are what really matters.
KA 9:05PM (2/27/2009)
Yeah, I'm with Joe. No reason to have it in Motown if it's such an uphill battle for the automakers. It's unfortunate for Detroit's economy, but those problems go way beyond the auto show.
Las Vegas seems like a good place to hold it, actually. They definitely have the facilities and amenities, and it's like a mini-Abu Dhabi in terms of its car culture.
asuka 9:27PM (2/27/2009)
I'm with Joe as well. Most auto-manufacturing countries only have one major auto show, not multiple. Given the size and diversity of the culture, the US could get away with two: one on the East Coast and one on the West. Further, as the auto industry is global, and Detroit is decidedly not, it makes more sense to hold those shows in global cities like New York, Los Angeles, or even DC (being a very international city and the new center of the American auto industry). Detroit should be allowed to rot as an example of what happens when the public backs crooked, incompetent political leadership. Its a lost city.
AZZO45b 10:18PM (2/27/2009)
asuka: You do realize that most of those other countries you site as examples are vastly smaller than the continental United States??? Germany, Italy, & Japan... three countries that host international auto shows could ALL fit into 3-4 midwestern states (lets use MI, OH, IN, & IL as the examples...)
As for metro Detroit not being global... PLEASE! Detroit is located in Wayne County & its second largest city (Dearborn, home of Ford) is home to a large Arab population, specifically the largest concentration of Iraqis outside of their home country. Detroit also has Hispanic, Polish & Greek that has shaped its history.
Oakland County, the county to Wayne's northwest, has been ranked as the USA's 4th richest county per capita (it was 3rd until the late 90's) That rank will drop due to the current economy, but money usually helps one be global The whole state of MI has about 9 million... metro Detroit makes up about 4.5 million
Like it or not the auto business in the USA is still anchored in the rust belt Nissan & Toyota have HQs in MI. VW Audi did. Honda is in OH & Nissan is in TN. Add a majority of the auto suppliers. Its not crazy to have an international auto show in the midwest... not every damn thing has to be aimed at the coasts.
I'm from Detroit & I will admit... the NAIAS in January is beyond retarded! COBO Center has been an issue for decades. I will agree that Detroit does not have to be the home of the N/A show if it can not do it correctly.
If the goal of the NAIAS is to promote N/A produced cars & trucks, showcase a vision for these companies, etc... it should be done in an environment that produces a first class experience for all involved. I've been lucky enough to attend the Tokyo & Geneva Motor shows... 1st class & beautiful venues. Detroit's COBO Center can NOT compare to these facilities
Due to the automotive base in the midwest of the USA I would lobby for a Spring or Summer date in a location that is comparable to other homes of international auto shows. The east & west coasts do NOT have an exclusive on "global" locations & first class convention facilities.
Asuka 10:47PM (2/27/2009)
1. I addressed the US, its size, and how it impacts on the number of auto shows in this country. Even still, its silly to have an auto show in every one of the top 10 cities in the country.
2. Are you really trying to argue that Detroit is more of an international city than New York, DC or LA? Because when I think of "international city", Detroit is the first city that comes to mind.
3. The auto industry's center of power - for better or worse - has shifted to DC. In today's post-modern, decentralized, global economy, its irrelevant where corporations headquarter, and the fact that people in Michigan still think it isn't is part of the problem.
Detroit is untenable. Every major indicator in that city is in decline - education, economy, politics. It doesn't even have a major grocery chain anymore. When you can't get a Safeway in your town - much less functioning school systems or city councils - you know there's trouble.
AZZO45b 1:08AM (2/28/2009)
Asuka: Your pulling a variety of info to support your views.
(1) You do realize that Europe & Japan have more than "international" shows? Detroit is host of North America's Auto Show, yet Toronto, Montreal, & other Canadian cities still host regional auto shows. Chicago, LA, NYC, have traditionally been regional auto shows
(2)I never tried to argue Detroit was MORE "international" than this country's LARGEST city, NYC. Never compared it to Chicago, LA or your favorite "global" meca DC. I was just defending it from your stereotypical nonsense that it was a cultural void with no pulse of anything global(due to its midwest location).
(3) Get back to me when "DC" becomes a hub for manufacturing more than corrupt politics. With your logic, the troubled banks & financial institutions should uproot their expensive Manhattan HQ's & move to DC (the new center of power)
I'm not arguing that Detroit deserves to be the NAIAS showcase as a birthright. An international auto show should have facilities that represent the USA properly.COBO Center has been like Detroit's NFL franchise... under performing for years. However S/E MI is home to Chrysler, Ford, GM, Nissan, & Toyota. Honda & VW still maintain satellite offices. Automotive companies still see value in the manufacturing base that has been functioning here.
When I went to college in Detroit I was told that there were only small indie groceries who jacked up prices due to crime. Hmmm. I shopped at the Farmer Jack chain through out school. As for NO major grocery chain left currently... Please update your "Detroit Sucks" fact book......
The Clinton Administration designated many urban areas (including Detroit) with "Empowerment Zones". Kroger, Meijer, & Wal*Mart are THREE grocery chains currently in Detroit city limits. Many in strip malls built with this federal assist.
Detroit obviously has some serious issues, but please quit condemning the entire area around Detroit. The city has an estimated 900,000 residents (a number that might drop on the next Census...) almost 3.7 MILLION live with in 50-60 miles of the same city.
Tony 10:09AM (2/28/2009)
Now there is a stereotypical comment if I have ever witnessed one. Cobo hall, one mile from the Arctic circle. Does anyone in the U.S study geography anymore? Canada is the second largest country behind Russia, a hellava lot larger than the piddly U.S. Just remember, you invaded us in 1812 and we kicked your ass. Don't make us come down from out of our warm igloos and open up a can of woo-pass on ya all.
As for Brent's comment about giving us Michigan, not a problem but all of you will have to move out while we clean up the place. We will let you know when you can come back, nudge, nudge, wink, wink, if you know what I mean.
texmln 9:24PM (2/27/2009)
Just look at a picture of the Detroit City Council. It tells you everything you need to know.
Reply
the vegas style guy 1:12AM (2/28/2009)
What do you mean?
naif 9:43PM (2/27/2009)
never mind adding on to or remodeling Cobo.
a new building in a new location is what is needed.
Reply
Alex Nunez 9:45PM (2/27/2009)
There is really no reason why someplace like Chicago (massive facility) or Los Angeles (very attractive locale, healthy car culture) couldn't pick up the NAIAS mantle and be completely successful.
Reply
Mobius_1 8:15AM (2/28/2009)
Good suggestion. And LA also has the added bonus of celebrities and the attention they bring. I personally wouldn't take a trip to Detroit, even for the NAIAS, although I'd be more than happy to visit LA (and coincide with the auto show, if that's possible)
Jim 1:18PM (2/28/2009)
". And LA also has the added bonus of celebrities"
those useless airheads are not a "bonus."
BoxerFanatic 9:47PM (2/27/2009)
I am still waiting to hear why Detroit's politicians are any worse than those anywhere else.
What exactly makes people think that politicians anywhere else are any better?
Self-manufactured experts, and ego addicts with power to usurp.
Reply