What can the Aerospace City Learn from the Motor City?
The fact that I would be spending five days in Detroit during my Marshall Memorial Fellowship tour of the U.S. was great news to me. I was going to have the chance to experience this famous city that had gone from heaven to hell in less than 50 years— from the highly active and populated city mass-producing cars and trucks, to an industrial desert caused by the offshoring of the automotive industry and fierce competition with European and Asian manufacturers. A city that shifted from prosperity to bankruptcy in mere decades.
I could not stop thinking: might the city of Toulouse in my native France one day resemble Detroit? Detroit, the motor city, largely developed between 1910 and 1960 by the incredible growth of the automotive, huge suburban area of 4 million people where 12% still work in the manufacturing industry. Toulouse, the aerospace city, which doubled its population in less than 40 years to almost 1 million people today thanks to the rise of the aerospace industry that employs more than 18% of the active workforce. What if the transformations in the aerospace industry becomes such that Toulouse one day sees a dramatic drop of its industrial jobs? How to react if it happens? How to be prepared for it?
The first lesson learned during my trip is that Detroit’s difficult situation is not only due to the decline of its automotive workforce. It was largely caused by the uncoordinated housing development of the surrounding cities, which consistently built 10,000 more houses than what was needed every year during 50 years, and which attracted 1.4 million of the wealthiest inhabitants of the city, mainly white, leaving behind the poorest population, mainly African Americans, and hundreds of thousands of empty houses. This burdened the city of Detroit with financial, social and security issues that prevented it from properly managing the shift to other economic activities. So maintaining coherent city planning is certainly the first thing Toulouse should do.
Toulouse can also learn from Detroit’s way to drive economic development: the city has put in place a non-profit organization to attract companies and help them grow, the Detroit Economic Growth Corporation (DEGC). It aims to market Detroit’s strong points: a high number of unoccupied buildings, a large available workforce (the unemployment rate is over 10%), and to propose incentives to settle in the city. These incentives can be tax abatements, access to federal grants, or brownfield sites; they must always have a favorable business case for Detroit (payback generally in 4 years thanks to the activity created) and must be reimbursed if the promised jobs are not created, or the committed investments are not done. Detroit has stopped any kind of subsidies, because they proved largely inefficient.
The structure of the administration in France is so different that it would be difficult to compare the two models. Nevertheless, it seems clear to me that Toulouse metropolitan area benefits from a better city housing and infrastructure planning, but suffers from a less integrated and less rigorous approach in economic development. What I learned in Detroit is that being successful in economic development implies linking all the communities which contribute to change the city. As a consequence, the DEGC coordinates its efforts with two other important actors in this field. The universities will develop the necessary teaching programs and the philanthropic foundations will support financially providing it fits one of their goals. Coordination—and effective leadership—matter most to save a city from postindustrial decline.
Julien Puyou, a Fall 2015 Marshall Memorial Fellow, is Vice President of Procurement Operations Aerostructures for Airbus Group in Blagnac, France.
The views expressed in GMF publications and commentary are the views of the author alone.