Detroit - Economy

Economy

Detroit and the surrounding region constitute a major center of commerce and global trade, most notably as home to America's 'Big Three' automobile companies, General Motors, Ford, and Chrysler. About 80,500 people work in downtown Detroit, comprising one-fifth of the city's employment base. Detroit's six county Metropolitan Statistical Area has a population of about 4.3 million and a workforce of about 2.1 million. In May 2012, the Department of Labor reported metropolitan Detroit's unemployment rate at 9.9%, with the city's unemployment rate for April 2012 at 15.8%. The Detroit MSA had a gross metropolitan product of $197.7 billion in 2010.

Firms in the region pursue emerging technologies including biotechnology, nanotechnology, information technology, and hydrogen fuel cell development. The city of Detroit has made efforts to lure the region's growth companies downtown with advantages such as a wireless Internet zone, business tax incentives, entertainment, an International Riverfront, and residential high rises. Compuware completed its world headquarters in downtown Detroit in 2003. OnStar, Blue Cross Blue Shield, and HP Enterprise Services have located at the Renaissance Center. PricewaterhouseCoopers Plaza offices are adjacent to Ford Field and Ernst & Young completed its office building at One Kennedy Square in 2006.

In 2010, Quicken Loans relocated its world headquarters and 4,000 employees to downtown Detroit consolidating its suburban offices, a move considered of high importance to city planners to reestablish the historic downtown. Some Fortune 500 companies headquartered in Detroit include General Motors, auto parts maker American Axle & Manufacturing, and DTE Energy. Other major industries include advertising, law, finance, biomedical research, health care, and computer software. The law firm of Miller, Canfield, Paddock & Stone, one of the largest in the U.S., has offices in both Detroit and Windsor. Wayne State University and medical service providers are major employers in the city. Metro Detroit area is one of the leading health care economies in the U.S. according to a 2003 study measuring health care industry components, with the region's hospital sector ranked fourth in the nation.

Casino gaming plays an important economic role, with Detroit the largest city in the United States to offer casino resort hotels. Caesars Windsor, Canada's largest, complements the MGM Grand Detroit, MotorCity Casino, and Greektown Casino in Detroit. The casino hotels contribute significant tax revenue along with thousands of jobs for residents. Gaming revenues have grown steadily, with Detroit ranked as the fifth largest gambling market in the United States for 2007. When Casino Windsor is included, Detroit's gambling market ranks third or fourth. In an effort to support spending within the city, certain business owners set up "mints" to distribute the Detroit Community Scrip. The scrip is used at local clubs and bars to ensure some dollars stay within the city by establishing a note that is only legal tender at certain places.

There are about four thousand factories in the area. The domestic auto industry is primarily headquartered in Metro Detroit. New vehicle production, sales, and jobs related to automobile use account for one of every ten jobs in the United States. The area is also an important source of engineering job opportunities. A 2004 Border Transportation Partnership study showed that 150,000 jobs in the Windsor-Detroit region and $13 billion in annual production depend on the City of Detroit's international border crossing.

A rise in automated manufacturing using robotic technology has created related industries in the area; inexpensive labor in other parts of the world and increased competition have led to a steady transformation of certain types of manufacturing jobs in the region with the Detroit area gaining new lithium ion battery plants. In addition to property taxes, residents pay an income tax rate of 2.50%.

The city has cleared sections of land while retaining a number of historically significant vacant buildings in order to spur redevelopment; though the city has struggled with finances, it issued bonds in 2008 to provide funding for ongoing work to demolish blighted properties. In 2006, downtown Detroit reported $1.3 billion in restorations and new developments which increased the number of construction jobs in the city. In decade leading up to 2006, downtown Detroit gained more than $15 billion in new investment from private and public sectors.

The Detroit automakers and local manufacturing have made significant restructurings in response to market competition. GM began the initial public offering of stock in 2010. General Motors has invested heavily in all fuel cell equipped vehicles, while Chrysler has focused research and development into biodiesel. In August 2009, Michigan and Detroit's auto industry received $1.36 B in grants from the U.S. Department of Energy for the manufacture of lithium-ion batteries. For 2010, the domestic automakers reported significant profits indicating the beginning of rebound along with an economic recovery for the Detroit area.