General Motors Came Back After Bankruptcy. Can Detroit Do the Same?

It's by no means the only factor, but it's a sizable part of the story: The parallels between the meltdown of the entire U.S. auto industry in 2009 and this week's historic Chapter 9 bankruptcy filing on behalf of the city of Detroit are impossible to ignore. That the city's tax base has shrunk so dramatically over the last decade — a loss of more than 200,000 residents in the past 10 years alone, or nearly 28 percent of its population — is inextricably linked with the long, steady decline of auto manufacturing jobs in Detroit. Mix in a healthy dose of financial mismanagement and some very real corruption, and you're left with a bunch of abandoned neighborhoods and a decimated municipal financial framework that can no longer afford basic services for the population it has left, let alone the pensioners to whom it made promises decades ago.

At the same time, this year has seen a series of relatively sunny earnings reports for General Motors, the only major automaker with its headquarters still in Detroit. GM's 2009 government-funded bankruptcy seems to have worked out about as well it possibly could have for the company, which posted better-than-expected profits of $1.18 billion in the first quarter of 2013.