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  • Well, this is a 1967 Pontiac GTO. It's got a 400 cubic engine and 360 horsepower, four-speed

  • transmission - so exactly the way it was built in 1967.

  • Meet Ken Grace, my guide to the muscle cars of Detroit. He had one much the same when

  • he was seventeen. Detroit's teenagers won't have the option

  • of owning a new Pontiac. General Motors has just killed the Pontiac brand - yet another

  • sign that one of the world's best known companies and its home town are in desperate trouble.

  • Back in the '60s and '70s you could see people in the city of Detroit walking the streets,

  • and the factories were full of cars and full of employment, some running three shifts.

  • It was an honour to say 'Yeah I'm from Detroit'. A tough city, a lot of issues, but we were

  • proud because everybody around the world drove our vehicles.

  • A city which worships the car, doesn't have much of a public transport system.

  • The monorail,

  • called the 'people mover', seems more for show than effect, but it does give you an

  • uninterrupted view of a city in decline. Once the murder capital of America, now businesses

  • are being killed off and residents have fled. Building after building vandalised or awaiting

  • the wrecker. Eerily too, the streets of motor city are empty of traffic.

  • The most striking thing about the centre of Detroit these days is how quiet it is. On

  • almost every street there are signs of urban decay and a sense of desolation. There's also

  • disbelief that the three big car companies could be in so much trouble.

  • Ford, which is in the best shape, recorded loss of $2billion in the first three months

  • of the year and that was viewed as something of a triumph.

  • General Motors, once the biggest car company in the world, will have to go into bankruptcy

  • to survive.There are no companies that are too big to fail.

  • If Lehmann's can fail with its 100 year history, I think GM can fail, and I don't think it's

  • too big to fail.

  • When I moved to Detroit in 1999 this town was rolling in profits from the SUV business.

  • Everyone got bonuses that year, they even gave out free computers at Ford, and they

  • had a plane flying around town thanking workers for their great contribution.

  • I never imagined that in a million years for General Motors, the number one company

  • in the United States, to be in this predicament, no way.

  • This is not simply a story of another industrial town falling on hard times

  • and few know that better than Dick Purtan -- Detroit's veteran, top rating radio announcer

  • who was spinning discs back in the '60s. So was there a real energy

  • about Detroit?Oh yeah a big time energy. Remember in those days, Detroit would have been the

  • fifth largest city in America.

  • And then I have seen in the... what, 45 years that I have been here, it's gone from 5th

  • to 6th to 7th to 8th to 9th to 10th and I think currently we're the 11th rated market

  • or city in America.

  • Detroit became the emblem of American know how and can do, the capital of US industrial

  • prowess. But it had more. It had its very own high

  • But it had more. It had its very own high

  • energy soundtrack, and like Dick Purtan's listeners, the world

  • came to love it as well - Motown.

  • I was thrilled to be here because this was a real happening town. And one of the reasons

  • it was happening was two reasons, the auto industry was thriving, people were thriving

  • here big time -- but Motown was booming.

  • This is an historic city because of motorcars. Motown was adapted from the name, motor city

  • -- Motown.

  • Martha Reeves and the Vandellas were a big

  • hit back then. She still belts it out, but has another stage

  • too, making law as a Detroit city councillor.You know it's a good feeling to have songs

  • that you recorded when you were twenty one, twenty two years old and then when you sing

  • them you can feel that young. You can think back and total recall to the day that you

  • recorded it.

  • Reeves started recording in Studio A at Motown Records. It became known as Hitsville USA,

  • borrowing a production style from the car industry.

  • And in our history, Berry Gordy worked at Ford Motor Company and he thought of running

  • a company as an assembly line. Once the doors opened, they never shut.

  • We started up with two tracks, two recording tracks. Went from there to four. Hitchhiker,

  • Stubborn Kind of Fella, Come and Get These Memories, Almost Like a Heatwave were all

  • cut with four tracks, and we grew from there. What would have been your favourite hit from

  • those days that you recorded in Studio A?Oh you can't pick one. We've had some wonderful

  • recordings and they're like children. Could you give us a burst of Heatwave before

  • you leave? Come on, a few bars.It's hard to do without the band and the girls but my favourite

  • part is 'sometimes I stare into space, tears all over my face. Can't explain

  • it, don't understand it. I ain't never felt like this before.' It's time to go.

  • Martha Reeves will be among those Detroiters celebrating fifty years of Motown this year,

  • but she's keenly aware that there's not much to smile about. She's watching her city run

  • out of gas and its once great institutions being junked.

  • I have been asked that question, how are we surviving the fact that half of the cars in

  • our city are foreign, that our cars aren't selling anymore. Our big three are considering

  • lay offs and buy outs and the industry is not what it used

  • to be, it used to lead the city.

  • A forced marriage with Fiat is Chrysler's way out of bankruptcy. The big daddy of them

  • all, General Motors, looms as the biggest potential disaster. It's closing plants and

  • desperately negotiating a survival strategy.

  • People who thought they had secure jobs, are

  • facing the reality that the wheels are falling off motor city. That's something that you,

  • you know you feel in your stomach every day. You know you're thinking about it. You can't

  • get it off your mind, you know? You would want for it just to be over, one

  • way or the other. Let me know something. Mitch Seaton started working for General Motors

  • thirty years ago. So what was the image of the company then?

  • I mean what did you expect if you got a job with GM?

  • That you would be able to retire, you know, with a certain amount of dignity, you know?

  • High wages, good benefits, you know. When we were children growing up in Michigan

  • or in a city of Inkster or Detroit, we always knew that that was the ultimate job to get,

  • because so many people drove nice cars and had nice homes.

  • Carmen Seaton also works at GM. Like many families, they've been the backbone of the

  • car industry for generations. We have so many people. I have four or five

  • aunts, I have two uncles, I have a sister, two brother-in-laws and actually

  • two grandfathers that -- both my grandfathers are retirees from the automotive industry.

  • We're at one of the many branches of the United Autoworkers. The guest of honour is Dick Johnston,

  • a veteran GM employee. There's a lot of love in the room for the

  • There's a lot of love in the room for the

  • committed unionist. Even so, high wages and generous health and pension benefits demanded

  • by the Union over many decades have been a factor in the car industry crisis.

  • When I first started, General Motors was really booming. Where I'm working at now in Ypsilanti

  • - there was 16.... 17 thousand people when it first started. It's gone from that down

  • to sixteen hundred people, which is a big drop from what it was when I first started.

  • In the '50s Detroit was booming and they built big monuments like the Spirit of Detroit -- strong

  • resilient, trusting in God to look after the people -- maybe.

  • But by the '80s, Japanese and other foreign car companies had started non union plants

  • in America's south. They were cheaper and more efficient and they were building the

  • cars Americans wanted.

  • Former GM executive, Robert Kleinbaum lives

  • about an hour's drive outside the Motor City.They didn't believe it, because they're so isolated

  • from the market place. I hope it will be remedied.He says GM ignored public concern about gas guzzlers

  • and moved too slowly to make greener cars. Wherever there is a situation where you could

  • do something like really hard and painful, but that would really solve the problem, or

  • you do the minimum amount necessary, they always chose that latter path, whether

  • it was with the union or their own capacity, or their management of their own brands, they

  • were always very reluctant to do the hard things that would really fix the problem.

  • The whole purpose of bankruptcy, Chapter 11 bankruptcy in North America, is to permit

  • the kind of restructuring the company desperately needs to do.

  • The nice thing about Chapter 11 is you can write off your debt, right? So that's the

  • whole point.Clean slate.So that's the whole point.

  • Sarah Webster is one of the most influential voices in Detroit, as the automotive editor

  • of the Detroit Free Press. At what point did you start to realise that

  • it was reaching crisis point in the industry? I think it was at the end of 2005 that we

  • started to write about the really enormous layoffs of sixty and seventy plus thousand

  • workers and I think that that was the time when we started to see that there was a dramatic

  • change in the workforce taking place.

  • What's the feeling amongst locals now?It's almost like losing a loved one or something.

  • They go through all that whole range of emotions you hear about where they're in denial and

  • then they're angry and then they're sad and depressed.

  • Drive down almost any street in the inner city and there are boarded up houses and disused

  • factories.

  • Once grand buildings like the city's railway station have been abandoned and yet the city

  • seems powerless to stop urban decay and to reclaim the wastelands.

  • All this plus a recession which locals say hit Detroit long before the rest of the country.

  • Of course there are some who prosper even in the worst of times. Jeff Darwish has been

  • tooling around the suburbs near the Ford factories buying and selling houses for 24 years. He

  • might feel for the locals but his vehicle of choice is a fancy German import.

  • We met in Willow Street, Dearborn. This is a middleclass area with good folks,

  • Ford Motor Company, a lot of people work for Ford right here and

  • work for the local hospitals and school teachers. It's a good area.So what's happened to the

  • value of homes?It's plummeted. People have been saying 30%, I'd say more about 40 to

  • 50%. This house here was in its heyday about three

  • of four years ago worth about 160 to 165, we just sold it for 56 thousand

  • and I didn't sell it overnight. It took about a month to sell it.

  • Most locals can't afford new houses or new cars. With sales down by as much as half,

  • car yards are bulging with unsold stock. Many are the designs of the past, big fuel hungry

  • vehicles. Dealers are being sacked by the big three car makers and going to the wall.

  • This city is all about the car. You can't go anywhere or do anything without one. Despite

  • the gloomy predictions, General Motors reckons it has a sparkling future with some fantastic

  • vehicles to match. This clutch of designers is looking to the

  • future.

  • We've still got a little bit of work to do, but we can actually drive.

  • By the time the public are presented with

  • a product we are two, three, four years ahead - we're doing the next cycle of product.

  • So we're happily in a position where we can always look to the future and recognise that

  • everyone relies on us for the future and that's our part in saving the company.

  • As they design the look of the next generation of cars, other teams are working on revolutionary

  • concepts. The hydrogen powered car is Mark Vann's baby.This is a very special vehicle.

  • It's a Chevrolet Equinox fuel cell electric vehicle. It uses no petroleum whatsoever and

  • the only emission is pure water vapour.

  • So this vehicle is a vital part of convincing

  • the Obama Administration that this company can be viable.

  • Absolutely. You know, we look at this as saying that this is our best foot forward.