On July 18, Detroit became the largest American city to declare bankruptcy after decades of a long decline in population and auto manufacturing, leaving businesses and communities unsure of what's in store in the future.
Detroit is $18.5 billion in debt, has lost half of its population since the 1950s, and its unemployment rate has tripled since 2000 according to CNBC.com.
The announcement comes just four months after Michigan Governor Rick Snyder named Washington bankruptcy expert Kevyn Orr as Detroit's emergency financial manager to try and fix Detroit's financial problems.
"Let me be blunt: Detroit's broke," said Snyder according to The Los Angeles Times.
Orr at the time said the city would "rise from the ashes" but the problem proved too great. Earlier this week he sent a letter to the governor saying he couldn't see an alternative to filing for Chapter 9 bankruptcy.
Orr blamed decades of fiscal mismanagement, failing services, and the decline in population.
"Detroit today is a shell of the thriving metropolis that it once was," said The Los Angeles Times.
Even though the auto industry has improved the last two years, unemployment has continued to fall every year since 2009.
The past decade 237,000 people have left the city according to CNBC.com. Over 700,000 people still remain city however and they're left to deal with thousands of abandoned buildings and neglected acres of land.
Approximately 38 cents of every city dollar goes to debt repayment and unfunded liabilities according to Snyder. By 2017, Snyder said that number will increase to 65 cents per dollar.
"The first step in solving a problem is recognizing that you have a problem, and the second step is actually doing something about it," Sarah Baruah, chief executive of the Detroit Regional Chamber said according to The Los Angeles Times.
The news will not affect how the "Big Three" Detroit automakers run business however according to USA Today.
GM, the biggest Detroit automaker, has only one headquarters in Detroit and recently delt with its own bankruptcy filing back in 2009.
"We do not anticipate any impact to our daily operations or business outlook," said a GM spokesperson in a press statement.
Chrysler, which also went bankrupt in 09, said while the news is disappointing, it believes in the city and its people.
Chrysler has a top-notch auto-assembly factory which employs 4,663 people and four other industrial sites all within the Detroit area. The automaker's headquarters is in Auburn Hills, just 30 miles away.
Ford did not go bankrupt in 2009 because it mortgaged the entire company in 2006 to raise money, and the company said this week things continue to go well according to USA Today.
The automaker was founded in Dearborn and while it has never been based within the city of Detroit it believes the city is "critical" for Michigan to succeed once again.
"The city has a difficult job ahead, and we are optimistic that governmental leaders will be successful in strengthening the community," said a Ford spokesperson in a press statement.
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