13 May 2013

More (Bad) Detroit News

You can check my previous observations about the parlous state of Detroit's financial future here and here. You can read today's NYT account of the report by Kevyn Orr, Detroit's state-appointed emergency city manager, here. (For those who have access to Reuters, you can read a more extensive account here.) Very bad news across the board but two comments especially caught my attention. First, that Detroit supports two times as many retirees as current city employees. Second, the brain-dead comment from the city's AFSCME union rep:
“It’s not as bad as what they’re trying to make it out to be,” Edward L. McNeil, a local official for the American Federation of State, County and Municipal Employees, said on Sunday. Mr. McNeil had not viewed a copy of Mr. Orr’s report, which was not made public until late Sunday, but he said he had grown accustomed to overly negative assessments of Detroit by the state and its representatives.(Emphasis added.)
Renegotiating Detroit's 28+ labor contracts must of necessity be one of the pieces of restoring it to financial solvency. Reducing retiree benefits can be accomplished the hard way, by agreements between the city and its unions. Or the harder way, in a Chapter 9 bankruptcy.

The clock is ticking.

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