Road to insolvency - motor city Detroit's bankruptcy

It's official - Detroit is broke. On Thursday (18.07.2013), the city formally filed for bankruptcy. The debts of the formerly proud city amount to some $18 billion (13.7 billion euros). For years, Detroit had been fighting for financial survival. In his report, the insolvency manager said filing for bankruptcy was the "only reasonable alternative."

Packard Motor Car Company stopped producing automobiles in the late 1950s. Over the decades, Detroit piled up a huge mountain of debt. In recent years, municipal expenditures exceeded city revenues by some $100 million per year. Long-term obligations also weighed heavily on the city budget. Now, Detroit is officially insolvent.

In boom years, there were periods when 2 million people lived in Detroit (this picture shows downtown Detroit around 1970). That number was later more than halved. Today, fewer than 700,000 people live in Detroit - a third of them in poverty.

It was automobile giants like Henry Ford who gave Detroit its nickname "Motor City" and brought prosperity to the metropolis. In this picture, he's posing outside his Detroit factory. His competitors General Motors and Chrysler continue to be based in Detroit.

Internationally, "Motown" stands for music above all. The label by that name churned out a series of world stars from 1960 onwards: Diana Ross, Stevie Wonder, Marvin Gaye, and the Jackson Five (pictured) - their list of artists reads like a who's-who of Top 10 musicians of the era. In 1972, the company relocated to Los Angeles.

By that time, the "60 years of decline" of Detroit - as the governor of Michigan called it - were well underway. Reasons included fierce competition from car companies in Japan, but also mismanagement at the level of both automobile companies and of the municipal administration.

Today, tens of thousands of buildings stand empty in Detroit. Almost half of the city lights don't work. The crime rate has risen along with unemployment - the murder rate, for example, is again as high as it was 40 years ago. But police are unable to cope: Detroit citizens have to wait an average of 58 minutes after placing an emergency call. Nationwide, that average is 11 minutes.

Rapper Marshall Mathers, better known as Eminem, is considered the most successful musician of the 2000s. At age 12, he moved to a poor neighborhood on the outskirts of Detroit with his mother, where it didn’t take long for him to make a name for himself as an underground rapper. In 1999, he had his breakthrough with "The Slim Shady" LP. He has won both an Academy Award and a Grammy.

General Motors and Ford have been recovering over the past few years. The hope is that with the help of the possibilities provided by the creditor protection program, the city of Detroit itself will one day get back on its feet financially once again.