Motor City: From Motown to no-hope town

Music and motor cars made Detroit's name – but the crisis in the automotive industry has created an economic and social disaster area. Stephen Foley tours the wreckage

It is the same odd realisation that overwhelms you at the great ruins of Central America or ancient Europe, the pyramids of Teotihuacan in Mexico or the labyrinthine streets of Ephesus in Turkey – the sense that a bustling civilisation, a hive of industry, need not even be destroyed to fall into ruin. It can just be abandoned.

Crunching across the shattered glass of so many windows, over the dust and the detritus under foot and through the weeds and even trees that have burst through the broken concrete, you find little reminders of what this place once was: the plant where the Packard motor company spat out its luxury cars to a world obsessed with the automobile and in love with the high technology coming out of Detroit, the motor city where more than three-quarters of the world's vehicles were produced.

It was abandoned 50 years ago, and yet it still stands, 35 acres of decaying history, accumulating a new layer of graffiti and a smattering of new oddities mysteriously dumped here. Thousands of shoes? A boat? Why on earth?

And then there are the echoes of production lines and of a corporation that survived the Depression and retooled to help the Second World War effort. Vast halls where vehicles were pieced together. A few letters stuck to the windows of the offices on the first floor, too few to make a guess as to its old occupant. Toilet seats on the floor of what used to be the ladies. The metal grid that once held the ceiling tiles has rusted and broken up and now dangles like stalactites. The copper wiring has long been stripped out of the walls by scavengers. Outside, the piles of rubble in what was once the main yard are covered by a thin layer of snow. It is cold in Detroit.

The Packard plant – once grandiloquently called Motor City Industrial Park, now more decrepitly "Mo or City In u tr Park" – is five minutes from downtown Detroit, if not exactly the heart of the city then as close as. These modern-day ruins have fascinated for two generations, as wave after wave of lay-offs and corporate collapses has reduced the size of the Detroit auto industry, and as the city itself has been abandoned by more than half the residents who lived here in its heyday in the Fifties. From a peak population of 1.85 million, Detroit is down to 917,000, and there is simply no need to tear down the structures of the past. There are no crowds, only vacant lots every few blocks, from the heart of the city centre out into the suburbs, up to and beyond the famed 8 Mile Road that used to divide the city, racially and economically. Even the famous music label Motown Records, created in 1959, left the city in the Seventies.

The Packard plant is haunted by the ghost of crises past, no doubt – but perhaps also by the ghost of crises yet to come.

Because Detroit is a city under siege again, from the impersonal, unforgiving forces of the global credit crisis, and – the locals say – from the rest of the nation, which has soaked up the grim images coming out of the city for many decades and no longer has the heart to help when that is what is most needed. The bosses of the three big automakers that are at the core of the Detroit economy were on Capitol Hill yesterday, pleading for money. General Motors, Ford and Chrysler have already shed tens of thousands of jobs this decade, the latest phase of a relentless downsizing of the industry that gave Detroit its name, Motor City, and its soul. The job cuts have continued through factory automation and through increased competition – as foreign makers first learnt to make cars, then learnt to make better cars than Detroit – accelerated each time by a new recession, or in the past couple of years by the high petrol prices that have reduced demand for the gas-guzzlers that gave the Big Three most of their profits.

Now, though, is something even worse. The credit crisis has cut off loans that potential buyers need to fork out for new wheels, meaning that sales at the Big Three are down by between a 33 and 45 per cent in a year. Even a healthy industry would struggle to adjust to that. The car makers are now losing so much money they cannot even afford to write the redundancy cheques that might get them down to the right size. With credit markets frozen, they cannot get the loans to bridge the gap either.

"I've lived in Detroit for 30 years, and this is the worst that it has felt in all that time," says Robert Mutean. "We feel abandoned a bit. The country's loyalty is not where it should be."

He is browsing listlessly in the gift store at Ford Field, home of the local American football team owned by Bill Ford Jnr, the chairman of the car company. The Detroit Lions are halfway through the season and, without a win, are becoming a pitiful metaphor for the city. Mr Mutean, 36, is not one of the 240,000 people employed by the Big Three, but he is one of the hundreds of thousands whose livelihoods depend on them, since he works for a shipping company that moves cars out of their factories and supplies in. As many as three million jobs could be lost if all three firms go bust as the effects ripple through the US and cause a convulsion in the economies that rely heavily on auto industry jobs, according to a recent study by the Centre for Automotive Research.

In a nail salon across from GM's glittering headquarters – the six-skyscraper Renaissance Centre it has been trying in vain to mortgage to stave off bankruptcy for a few more weeks – Christine Passerini is worried. One way or the other, she says, a majority of her clients are connected to the industry – and she is bitter about the environmentalists on the West Coast who oppose bailing out Detroit. "In California they are saying they want us dead. Dead. But we keep that state going, too, through the auto industry," she says, adding that supplier and dealer jobs are spread across the US. "And they have just put on the Los Angeles motor show."

In the Ford Field store, Mr Mutean says: "I blame American companies for shipping jobs overseas. The people that the automakers have let go are the people who would otherwise have had the money to buy their product – and it is an endless cycle downward now. What do you expect when you lay off 30 or 40 per cent of your workforce?"

Ford's rise to pre-eminence came when the self-reinforcing spiral was upwards, after Henry Ford, its legendary founder, doubled his employees' pay in 1914 to an unprecedented $5 an hour, attracting skilled workers from around the country to Detroit and putting the mass-produced Model T within reach of the ordinary consumer.

It was in Highland Park, the city-within-a-city four miles from downtown Detroit, that Mr Ford transformed the industry with the world's first car assembly line. That pioneering factory is long closed now, as is the old Chrysler headquarters that used to be round the corner and its Arsenal of Democracy sign that stood before the gates when the industry retooled for the war effort. Instead, Highland Park is struggling on as a shadow of its former self, in fact winning some new businesses to the area but still blighted by unemployment rates that are above 30 per cent.

The deleterious effects across Detroit of abandoned and burnt-out homes has been greatly exacerbated by the sub-prime mortgage debacle, which first lured tens of thousands of people into loans they could not afford and then spat them out of their homes through foreclosures.

For the few residents who braved the cold on Monday night, a local council meeting in Highland Park was headlined by concerns about crime. Mayor Hubert Yopp's warnings included to call ahead before getting home so someone in the house could meet you, and to move your car repeatedly while shopping.

Crime is the most serious of numerous afflictions for a neighbourhood that has already suffered the decline that many more areas have experienced. "When an area loses 5,000 people, that is $6m in property taxes and water purification revenue that is just gone," says Chris Woodard, a councilman. "Clearing the weeds, shovelling the snow off the sidewalk, it takes money. This city is in a financial emergency."

How much more of Detroit, how many of the still-vibrant neighbourhoods close to the remaining car plants and supplier factories, will soon experience the struggles of Highland Park?

On Capitol Hill yesterday, as in an online video posted on YouTube and in other lobbying efforts, the Big Three are arguing that they are just as integral to the functioning of the US economy and the employment of American people as the banks of Wall Street that have been bailed out so far.

Certainly the closure of one plant, the bankruptcy of one automaker is not the end of it. Across the road from Packard, another abandoned building carries the sign: Arlan's Discount Store. And another: USA Food Center. Beyond, another vacant lot with the ghosts of who knows what other stores, or bars, or diners that used to service the thousands of workers here.

Motor City: A legend in cars and music

* Detroit, the state capital of Michigan, was founded as a fur trading post in 1701 by the Frenchman Antoine de la Mothe Cadillac.

* Henry Ford started his automotive factory in the city in 1903 and invented the assembly line in 1913. The Big Three – General Motors, Ford and Chrysler – made Detroit their headquarters and Motor City became an industrial powerhouse. In 1955 four out of every five cars sold globally was US made, half of them by GM.

* Detroit is the 11th most populated city in the US, with 900,000 inhabitants, but that is only half what it was in the 1950s boom days.

* Detroit was for much of the 1960s the music capital of America, famous for a style of soul music known as the Motown Sound. This was characterised by the use of tambourine, strings, horn and "call and response" gospel-style vocals. Motown Records, the label founded by Berry Gordy in 1959 launched the careers of Diana Ross, The Four Tops, Marvin Gaye and Stevie Wonder. The label left town in the 1970s and the empty former headquarters of Tamla-Motown was demolished in 2006 for a car park.