Mon June 9, 2014
Detroit's Big Three Toss $26 Million Into Pot For 'Grand Bargain'
Originally published on Mon June 9, 2014 5:42 pm
As Detroit's bankruptcy trial inches closer, groups are contributing funds to what's become known as the "Grand Bargain" — the effort to protect retired city workers' pensions and the Detroit Institute of Arts from creditors. General Motors, Ford and Chrysler just announced they will pitch in, too. But, as Michigan Radio's Tracy Samilton reports, the entire Grand Bargain could unravel if the city's retirees reject the deal.
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A fund to protect art and pensions in Detroit is growing. As the city's bankruptcy trial inches closer, more groups are contributing to what's been called the grand bargain. The latest to pitch in, Detroit's big three - Ford, General Motors and Chrysler. Michigan Radio's Tracy Samilton has more.
TRACY SAMILTON, BYLINE: Detroit and its creditors are going to trial in bankruptcy court in less than two months. Everything is on the table for creditors to claim, including the pensions of retired city workers and the city's gem of a museum, the Detroit Institute of Arts. The DIA is a gorgeous Beaux-Arts building. Its collections have been compiled over the past 130 years. On a warm Sunday afternoon, a small group of people is with tour guide Grant Gorman(ph), looking at the museum's most prized masterpiece by Diego Rivera.
GRANT GORMAN: Behind me, you'll see one of two large panels, which are meant to represent the prime industry of Detroit - the auto industry.
SAMILTON: The immense murals show both the grandeur and the dark side of the auto industry. They were commissioned by Edsel Ford, Henry Ford's son. The threat that these murals and possibly every other artwork owned by the city could be sold to the highest bidder struck a nerve. Margarita Sanchez(ph) drove here from Lansing, hoping this is not the last time she gets to visit.
MARGARITA SANCHEZ: There is nothing better in Michigan in art than the Detroit Art Institute, so all of us should get behind it.
SAMILTON: It is the grand bargain, an attempt to raise nearly a billion dollars to save the museum and protect the pensions of thousands of retired police, fire and other city workers from deeper cuts. So far, local and national foundations have kicked in more than $370 million, and the Republican-controlled state legislature pitched in nearly 200 million. The museum itself has pledged $100 million - a huge commitment, leading it to turn to GM, Ford and Chrysler for help. GM will contribute $10 million, Ford, another 10, and Chrysler, six. Michigan's governor, Rick Snyder, says the auto industry knows what it's like to struggle.
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GOVERNOR RICK SNYDER: If you think back a few years ago, did we think we would see a day when they were stepping up to support the community at this financial level? They were struggling for their survival.
SAMILTON: Reid Bigland is with Chrysler. He says the auto industry and the city of Detroit are inextricably linked.
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REID BIGLAND: I think people are going to see that Detroit is on the mend. And in my opinion, even though we kind of hit rock bottom a little while ago, I think things are looking up in the city of Detroit.
SAMILTON: But the grand bargain is still in a perilous state. That's because most of the city's retirees still have to approve a cut to their pensions of up to four-and-a-half percent. A bitter pill to swallow, though far less than will likely be imposed if the grand bargain collapses. The city's emergency manager, Kevyn Orr, says the city's future is now in the hands of people who worked for Detroit their whole lives.
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KEVYN ORR: You're being asked to make a sacrifice. We are aware of that. But I need your help.
SAMILTON: Retirees have until early July to cast their votes. The bankruptcy trial is scheduled to begin shortly after that, with or without the grand bargain. For NPR News, I'm Tracy Samilton. Transcript provided by NPR, Copyright NPR.