The Decline of Detroit - How To Prevent in OKC?

[OKCTalker]

The Packard Plant: Then and now -- interactive comparison photos | City of Detroit | Detroit Free Press | freep.com

The above link is to several before and after pictures in the Detroit Free Press of the Packard Plant which produced automobiles from 1899 until 1958, and contained 3.5 million square feet (by comparison, our own GM plant had 4 million square feet). Unlike typical side-by-side images of then and now, Free Press photographers and editors made it possible to slide your mouse left & right across the images to dissove from current images to those from the past. The images are painful to see.

Could it happen here? Oklahoma City is undergoing a fabulous renaissance not unlike Detroit one century ago, and many would say we are as "energy-centric" as Detroit was "auto-centric." Could a sequence of mis-steps occur within industry and government where Oklahoma City comes to an end similar to Detroit's?
More importantly, are there things we should be doing now - during our explosion of commercial and residential development - to prevent this?

[bchris02]

The Packard Plant: Then and now -- interactive comparison photos | City of Detroit | Detroit Free Press | freep.com

The above link is to several before and after pictures in the Detroit Free Press of the Packard Plant which produced automobiles from 1899 until 1958, and contained 3.5 million square feet (by comparison, our own GM plant had 4 million square feet). Unlike typical side-by-side images of then and now, Free Press photographers and editors made it possible to slide your mouse left & right across the images to dissove from current images to those from the past. The images are painful to see.

Could it happen here? Oklahoma City is undergoing a fabulous renaissance not unlike Detroit one century ago, and many would say we are as "energy-centric" as Detroit was "auto-centric." Could a sequence of mis-steps occur within industry and government where Oklahoma City comes to an end similar to Detroit's?
More importantly, are there things we should be doing now - during our explosion of commercial and residential development - to prevent this?

I would say OKC is more similar to Charlotte and their dependence on banking than Detroit and their dependence on the auto industry. Energy is by far the dominant sector in OKC but the economy is diverse enough the city could go on even with problems in the energy sector, albeit with 10% or so unemployment like Charlotte is currently experiencing.

Greater Oklahoma City Economic Development - Major Employers

Chesapeake, the top energy employer in OKC, is actually only the 8th largest employer in the city. Devon, the second largest, isn't even in the top ten. Barring such a collapse that pushes Chesapeake or Devon into bankruptcy, I think the city, though would experience a rough patch, would ultimately be fine. OKC should continue what its doing as in increasing the quality of life here so other companies may be enticed to relocate here and that this would become a place people would WANT to live in even if the flow of the big oil and natural gas dollars flowed.

[Pete]

We more or less experienced the worse case scenario in the mid-80's.

It was darn grim for a while but the City is much larger and thus more diversified than it was then.

Also, the oil business has changed dramatically in that the country is much more committed to domestic production, so it's not like OPEC can merely open their taps and drive prices way down.


But to be sure, things are near a peak right now which means the economy will come down at some point. It's always ALWAYS cyclical, it's just a matter of how deep the trough. I don't think we'll ever again see things as low as the 80's.

[bluedogok]

Energy will always be in demand and some forms are hard to import, I too feel that the crash of the 80's will be hard to duplicate because worked demand for energy is exponentially greater than it was back then. Just the demand from newly emerged industrial countries like China and India and demand in those and other countries in the region will continue to grow. The world economy is a very different dynamic than it was in the 80's oil crash.

[Spartan]

I think you guys overestimate how diversified OKC is.

[bchris02]

I think you guys overestimate how diversified OKC is.

A crash in the energy sector would be devastating to OKC, but it wouldn't turn it into Detroit. Charlotte was devastated by the financial crisis and is currently suffering over 10% unemployment, but it is hardly Detroit. That could change if something happened to Bank of America. Their economy is less diversified than OKC and they don't have anything at all to fall back on in the event of further deterioration of the banking industry. The oil/gas industry is a huge part of OKC's economy but there is a lot more to it than that.

[ljbab728]

OKC has always had a luxury having a huge number of government jobs to bolster the economy during down times. The only thing that might change that is if Tinker would be shut down for some reason. That would be much more devastating to our economy than a downtown in the oil and gas industry.

[Spartan]

A crash in the energy sector would be devastating to OKC, but it wouldn't turn it into Detroit. Charlotte was devastated by the financial crisis and is currently suffering over 10% unemployment, but it is hardly Detroit. That could change if something happened to Bank of America. Their economy is less diversified than OKC and they don't have anything at all to fall back on in the event of further deterioration of the banking industry. The oil/gas industry is a huge part of OKC's economy but there is a lot more to it than that.

Idk about Charlotte but obviously Detroit has problems compounded over decades.. Side note: Must see Detropia

[dcsooner]

I think you guys overestimate how diversified OKC is.

TOTALLY AGREE! OKC is a government dependent City

[Dubya61]

Although the presence of government jobs in OKC is important, it's not the government jobs that make OKC rank high in The Business Journals' economic index for August and September -- it's the private sector entities that factor the most.
Oklahoma City leads heartland's sweep of Economic Index - The Business Journals

[Pete]

I think OKC actually has a pretty good balance for a city it's size...

Yes, we have a lot of energy jobs, but that's a good thing. A very profitable sector that pays extremely well -- other cities would kill for what we have.

And of course, lots of government jobs too but even in that respect we have a good mix: Tinker/Boeing and related industries, the state capitol and all that entails, the FAA, and all the typical stuff that comes with being a larger city. I agree with the comment above about Tinker; losing it would be far more devastating than another energy slump.

Also, keep in mind we've had a lot of growth in service sector jobs, like Hobby Lobby, Paycom, American Fidelity, MidFirst/Midland, etc. And even though the call centers aren't glamorous, they pump billions into our economy: Hertz, Dell, AAA, Farmers, etc., etc.


Things are much more diversified now than they were in the 80's.

[PennyQuilts]

Yeah, Pete, for those of us who went through the 80's.. man that was tough. Diversification became the mantra as a result. It is still an energy town/state but it does seem to be much more diversified than those days.

[Edgar]

TOTALLY AGREE! OKC is a government dependent City

True that- without federal spending in Ok and its capital city, we'd be a real 3rd world economy- energy and agriculture. Socialism! Wealth redistribution!
I Notice Mary and all her teabagn' ninnies are really sweating the fiscal cliff.

[Plutonic Panda]

This is pretty crazy... Photos Show Home Decay In Detroit - Business Insider

[mugofbeer]

WOW!! Thats pretty scary. Notice the arson.

[bradh]

Maybe I'm wrong, but our industries aren't as union heavy as Detroit, so we won't have that problem.

[Spartan]

Unions didn't kill Detroit. Sprawl did. Detroit's suburbs are as healthy as ever.

I think OKC actually has a pretty good balance for a city it's size...

Yes, we have a lot of energy jobs, but that's a good thing. A very profitable sector that pays extremely well -- other cities would kill for what we have.

And of course, lots of government jobs too but even in that respect we have a good mix: Tinker/Boeing and related industries, the state capitol and all that entails, the FAA, and all the typical stuff that comes with being a larger city. I agree with the comment above about Tinker; losing it would be far more devastating than another energy slump.

Also, keep in mind we've had a lot of growth in service sector jobs, like Hobby Lobby, Paycom, American Fidelity, MidFirst/Midland, etc. And even though the call centers aren't glamorous, they pump billions into our economy: Hertz, Dell, AAA, Farmers, etc., etc.


Things are much more diversified now than they were in the 80's.

Those are names. Where's the growth? I mean the aggregate. Who is hiring?

OKC is all energy and always has been. Government isn't a growth industry - Tinker just missed what would have been a huge blow thanks to Tom Cole. Govt is always on the chopping block.

[bombermwc]

Hang on Spartan, because Tinker has grown. One difference is in how its grown. A lot of the workforce there is becoming contract work rather than federal positions. So while the federal jobs numbers might look to have dropped, the number of warm bodies on base are not necessarily decreasing. Another side of that is the related workforce. There are the obvious ones like Boeing, but the lesser-known entities like Chromalloy (and countless others) make up a huge workforce as well. Just like the auto industry, there are a lot of side companies related to the main institution that are there because of the base and also offer a LOT of employment. That's not so much true in state government, but it does exist. Some companies heavily rely on state contracts for their business, and if that were to go away, those companies may not be able to survive. Of course those state jobs are going to be more reliable than federal in terms of the potential for Tinker to be closed one day...but the capital isn't going to close LOL.

The oil bust and savings and loan crash shows OKC how volatile our world was...and still is. Like Spartan said, if energy went bust again, OKC would have a hard time. As he also says, we've diversified a lot since then (with the crashes in mind), but we're still an energy dominated state. Just like I mentioned above, if Devon and Chesapeake went caput tomorrow, OKC (and the state) wouldn't just lose 10K office jobs, we'd lose 100K in all the drill companies, parts, transport, etc. that goes along with them. We would for sure crash to a significant extent. But without having a compounded banking crisis, I think OKC would stand a better chance of not falling into a 20 year slump like we did before.

In relation to Detroit, you also have to consider the White Flight to the suburbs, and the corruption in the city government. With a housing market so flooded, abandoning your home was more economically beneficial than anything else...how crazy is that!?! Even places like Wichita that saw a huge number of lost jobs over the last 15 years from aerospace hasn't seen that kind of craziness. Unfortunately, the city government spend decades operating in an us vs. them white/black world rather than focusing on setting up a city that would survive. Remember, this has been going on for decades...it's not a new problem for them and it's only recently become such national attention. Countless pop culture references can be found over the last 30 years on the fall (and attempted rebirth) of DTW. OKC managed to avoid a lot of the racial tension that DTW saw. Throw the UAW in the mix there, and you've got a big mess. Their "negotiating" simply forced automakers to build elsewhere and continue to downsize because it didn't make economic sense to produce vehicles in MI. Even in OKC where we were building the still-sold Trailblazer and Malibu, we lost a plant! That bankruptcy was the best thing that ever happened to GM to free them from the insanity the UAW created. I say all that simply to say that Detroit is a long and complex issue. There are so many factors in the mix there that lead to the current state. My heart tells me the citizens of OKC are smarter than that and wouldn't let things fall so badly.

[Plutonic Panda]

Unions didn't kill Detroit. Sprawl did. Detroit's suburbs are as healthy as ever.

Wrong.

[Just the facts]

Unions didn't kill Detroit. Sprawl did. Detroit's suburbs are as healthy as ever.

This^. How ironic that the City which brought us the automobile has paid the highest price for doing so. Equally ironic is that to restore Detroit they are bring back their streetcar. Detroit has a chance to be the model American city.

M-1 RAIL | Woodward Avenue Streetcar Project in Detroit

[Urbanized]

"Nowhere to go but up" actually creates a lot of opportunity and can inspire a lot of creativity. OKC has already had its Detroit moment. There was a time in the late eighties and early nineties when large numbers of houses were boarded up in most inner city neighborhoods, including places like Paseo, Jefferson Park, and even places like Mesta. You could buy a house in Paseo for $5K to $10K. Fortunately for us our fall was not nearly so devastating, but then again we didn't have as much to lose, either.

[Plutonic Panda]

This^. How ironic that the City which brought us the automobile has paid the highest price for doing so. Equally ironic is that to restore Detroit they are bring back their streetcar. Detroit has a chance to be the model American city.

M-1 RAIL | Woodward Avenue Streetcar Project in Detroit

The first car actually came from Europe.

[bombermwc]

So far, the city council hasn't been able to get any momentum and has kept falling. You can always fall further, and so far the are proving it. There's still corruption in the government taking money. When you're city is so bad off, how is that even something that crosses their mind?!?!

There is a program going to help "motivate" owners to either do some upkeep on these properties, or the city will take them over. Unfortunately, the fund for this is pretty bad off. Detroit has a 5 year plan to help put 500 million into it, but it's still going to be tough. My numbers aren't exact, but I believe a story on NPR said that out of 75 homes, when served notice that if they didn't contact the city in 48 hours the home would be taken, 35 of them returned the call and actually brought the homes back up to code. There's a funny story of a resident calling the police on someone because she thought he was stealing guttering. Turns out it was one of these owners putting guttering ON the house. The lady said it was the first time in 20 years she had seen anyone do ANY sort of renovation on a home in her neighborhood and the possibility of that hadn't even crossed her mind. So there is something happening, but they have so many roadblocks and quite an uphill battle. Any time you're cutting utilizes off to neighborhoods to cut down on service expenses (they're vacant), it's worse than we've seen anywhere else.

[ylouder]

Others have already said it but I've spent considerable time in the Michigan area. Detroit has some of the nicest suburbs I've ever seen. Hundreds of thousands of people with good paying jobs and an okc appetite for endless sprawl. They are just about 50 years ahead of us. We'll and nafta didn't help either with a lot of the assembly jobs being moved to Mexico

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[ylouder]

I also wanted to add. Remember when okc lost its gm plant, well X that by 6 and don't add billions in federal spending (thanks obama) that brought our gm plant back to life. I remember dozens of once nice homes going up for sale in south okc, westmoore, Moore and Norman areas that were asking considerably less than a few years prior.

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