WEBVTT - Bloomberg Wall Street Week - September 20th, 2024 0:00:00.320 --> 0:00:03.400 Welcome to the next generation of Wall Street Week, bringing 0:00:03.400 --> 0:00:06.320 you stories of capitalism, stories that will help you think 0:00:06.360 --> 0:00:11.240 about business, markets, economics, geopolitics, climate, and technology. This week, 0:00:11.360 --> 0:00:13.319 we tell a story of the pride of an auto 0:00:13.360 --> 0:00:16.200 industry and its home city pride that led to their 0:00:16.239 --> 0:00:19.119 fall and their efforts to restore that pride. We have 0:00:19.160 --> 0:00:21.959 a story about the business behind that restaurant where you 0:00:22.000 --> 0:00:37.440 feel like you belong. We start with a story about value. 0:00:37.640 --> 0:00:39.920 The value of a college degree one of the biggest 0:00:39.960 --> 0:00:42.800 investments many of us will ever make. But it's getting 0:00:42.840 --> 0:00:46.640 more and more expensive for the students and for the institutions. 0:00:46.760 --> 0:00:48.400 But is it worth it? 0:00:50.200 --> 0:00:53.000 Yes, one hundred percent. I mean, you know, financial considerations 0:00:53.080 --> 0:00:55.160 is the main motive, and Purdue is an affordable college. 0:00:55.880 --> 0:00:58.560 But yeah, no, I could have never imagined having access 0:00:58.560 --> 0:01:00.080 to the amount of resource that I have access to 0:01:00.120 --> 0:01:00.480 do here. 0:01:00.920 --> 0:01:04.160 Rebecca Senior is a rising junior at Purdue. She pays 0:01:04.160 --> 0:01:06.319 about forty one thousand dollars a year as an out 0:01:06.360 --> 0:01:09.679 of state student, just over the national average of thirty 0:01:09.720 --> 0:01:12.959 six thousand dollars, a number that's gone up forty percent 0:01:13.200 --> 0:01:16.080 since two thousand and four. With students like Senior making 0:01:16.240 --> 0:01:20.280 ends meet through a combination of grants, scholarships, and federal loans. 0:01:20.720 --> 0:01:22.960 I am very appreciative of the scholarship and grant Purdue 0:01:23.000 --> 0:01:24.360 has offered me. I would not be able to be 0:01:24.400 --> 0:01:25.080 here without it. 0:01:25.840 --> 0:01:28.240 As hard as it may be for many students and 0:01:28.280 --> 0:01:32.080 their families to cover the costs, historically colleges and universities 0:01:32.120 --> 0:01:34.640 haven't had to worry all that much about what they charge. 0:01:35.040 --> 0:01:37.880 The cost of higher education rose faster than the cost 0:01:37.880 --> 0:01:41.199 of living for most of the last forty years, something 0:01:41.240 --> 0:01:44.200 interrupted only by the big spike in inflation in twenty 0:01:44.240 --> 0:01:47.720 twenty two. But Mitch Daniels, who ran omb and then 0:01:47.800 --> 0:01:50.600 served as governor of Indiana and as president of Purdue, 0:01:50.760 --> 0:01:54.040 says that is changing, that people are no longer willing 0:01:54.080 --> 0:01:56.440 to spend whatever colleges charge. 0:01:56.760 --> 0:01:59.720 The systems sort of built for higher pricing. I mean, 0:02:00.520 --> 0:02:04.480 if you had total pricing power in any business, in 0:02:04.480 --> 0:02:06.559 other words, you could raise prices and you not only 0:02:07.400 --> 0:02:10.200 don't lose customers, you may gain more. Because there's no 0:02:10.280 --> 0:02:14.600 quality measurement, people have associated the price with quality, no 0:02:14.720 --> 0:02:17.680 proof that that's true. That's certainly one reason the hardest 0:02:17.720 --> 0:02:20.640 business to change is one that's succeeded for a long time, 0:02:21.240 --> 0:02:25.480 and this model you call it, that was very successful, 0:02:25.960 --> 0:02:27.720 had the wind at it's back and young people being 0:02:27.760 --> 0:02:30.400 told you got to go to college, four year college, 0:02:30.440 --> 0:02:35.200 and they followed the path at least resistance. Now, very belatedly, 0:02:35.240 --> 0:02:40.400 there's a little consumer resistance. Finally, slowly the market has 0:02:40.440 --> 0:02:44.280 begun to react to that. So you're seeing now a 0:02:44.320 --> 0:02:48.040 system beginning to experience the shakeouts that other sectors have. 0:02:48.440 --> 0:02:51.680 The shakeouts Mitch Daniels talks about are becoming more common 0:02:51.720 --> 0:02:55.240 in the United States as colleges have cut programs places 0:02:55.280 --> 0:02:59.200 like UNC Greensboro Drake and West Virginia University. The State 0:02:59.320 --> 0:03:03.640 Higher Education Executive Association reports that over five hundred private, 0:03:03.720 --> 0:03:07.640 nonprofit four year colleges have closed down all together in 0:03:07.680 --> 0:03:11.800 the last ten years. Some American students look to Great 0:03:11.840 --> 0:03:15.840 Britain for an alternative, seeing high quality at much lower prices, 0:03:16.200 --> 0:03:19.280 but Jillian Ted, who has added provost of King's College, 0:03:19.320 --> 0:03:22.440 Cambridge to her responsibilities as US editor at large at 0:03:22.440 --> 0:03:26.080 The Financial Times, says British schools are facing their own 0:03:26.200 --> 0:03:27.119 financial pressures. 0:03:27.400 --> 0:03:32.880 The challenge today is that essentially the numbers have exploded dramatically, 0:03:33.080 --> 0:03:35.040 which in many ways is a good thing, but it 0:03:35.120 --> 0:03:38.880 also means that the huge strain on public sector budgets, 0:03:39.120 --> 0:03:41.640 which at the moment the government simply can't pay the 0:03:41.680 --> 0:03:44.720 bill for all the students to have cheap education, let 0:03:44.800 --> 0:03:48.600 alone free education. So what universities are facing today is 0:03:48.640 --> 0:03:51.800 a squeeze where on the one hand, they are allowed 0:03:51.840 --> 0:03:55.160 to charge students today for their tuition, but that's capped 0:03:55.200 --> 0:03:58.800 at nine thousand pounds a year, and even that level, 0:03:58.840 --> 0:04:02.840 which looks very low americanized, is seen as grotesquely high 0:04:03.160 --> 0:04:04.640 by many people in the UK. 0:04:05.640 --> 0:04:09.000 As if the business model for higher education weren't challenged enough, 0:04:09.200 --> 0:04:12.440 it's consumers. The students and the parents are starting to 0:04:12.440 --> 0:04:15.160 doubt that they're getting good value for their money, at 0:04:15.280 --> 0:04:17.640 least in the United States, where polls indicate that only 0:04:17.760 --> 0:04:20.479 thirty six percent of adults say they have a great 0:04:20.520 --> 0:04:23.919 deal or quite a lot of confidence in higher education, 0:04:24.360 --> 0:04:27.960 a number that's down from fifty seven percent in twenty fifteen. 0:04:28.360 --> 0:04:31.080 Is this system succeeding right now? And what is the goal? 0:04:31.200 --> 0:04:33.279 How do we measure success for higher education? 0:04:33.680 --> 0:04:33.840 Well? 0:04:33.839 --> 0:04:36.880 When I said succeeding, I meant they were able to 0:04:37.320 --> 0:04:40.159 perpetuate themselves in their institutions. I didn't mean it was 0:04:40.200 --> 0:04:44.560 necessarily succeeding for the students. That's a whole other question, which, 0:04:44.600 --> 0:04:48.760 again way too late, is being asked more and more forcefully. 0:04:49.640 --> 0:04:53.640 But no, a whole other discussion. Whether the system, as 0:04:53.880 --> 0:04:56.200 we've been operating it has been teaching what it ought 0:04:56.200 --> 0:04:58.839 to teach, teaching it as rigorously as it ought to 0:04:58.880 --> 0:05:02.560 be taught, And therefore whether the young people emerging meet 0:05:02.800 --> 0:05:06.400 either of I would say the two basic tests of success. 0:05:06.640 --> 0:05:10.120 One are they ready for highly productive work somewhere in 0:05:10.120 --> 0:05:14.680 the economy. Two are they prepared to be knowledgeable, engaged, 0:05:15.560 --> 0:05:19.039 active citizens. And by those two measures we have the 0:05:19.080 --> 0:05:21.760 system hasn't been doing, in general, too good a job. 0:05:22.279 --> 0:05:25.320 The question of whether an increasingly expensive college education is 0:05:25.360 --> 0:05:28.120 truly worth it is being asked on both sides of 0:05:28.120 --> 0:05:28.680 the Atlantic. 0:05:29.000 --> 0:05:33.440 The explosion of digital technologies, the rise of AI, the 0:05:33.560 --> 0:05:36.840 rise of homeworking means that the question of what we're 0:05:37.000 --> 0:05:41.920 educating for is becoming increasingly unclear. And it's worth remembering 0:05:41.920 --> 0:05:44.240 that so much of what we've had as higher education 0:05:44.800 --> 0:05:48.680 and secondary education in the last century was created very 0:05:48.760 --> 0:05:52.600 much post the Industrial Revolution in order to prepare a 0:05:52.640 --> 0:05:57.400 workforce to either manage factories or work in a factory 0:05:57.760 --> 0:06:00.680 and to have the discipline and the skills quad for that. 0:06:01.360 --> 0:06:04.160 And today, of course, manufacturing is such a small part 0:06:04.200 --> 0:06:07.599 of the economy that the question of what we're educating 0:06:07.640 --> 0:06:11.240 for is becoming increasingly uncertain and challenged. 0:06:11.440 --> 0:06:14.200 It should come as no surprise that, given the challenges 0:06:14.200 --> 0:06:17.400 to the value of higher education, leaders are looking to 0:06:17.440 --> 0:06:20.920 make changes. Eight years ago, Mitch Daniels shook things up 0:06:20.960 --> 0:06:24.240 at Purdue, freezing tuition just two months in his job, 0:06:24.720 --> 0:06:27.880 something that continues to this day. When you were on Purdue, 0:06:27.920 --> 0:06:30.440 what business principles did you try to bring to bear 0:06:30.520 --> 0:06:31.680 in managing. 0:06:31.440 --> 0:06:35.520 I'd love to tell you some brilliant set of brilliant strokes. 0:06:35.560 --> 0:06:37.400 It was, and a lot of it had to do 0:06:37.440 --> 0:06:39.080 with what question you asked. I used to say, we 0:06:39.960 --> 0:06:42.279 saw if we decided we solve the question the equation 0:06:42.360 --> 0:06:44.760 for zero. Instead of asking how much money do we 0:06:44.800 --> 0:06:48.479 need next year to keep operating and keep peace and 0:06:48.520 --> 0:06:51.000 happiness on the campus, we asked the question, what would 0:06:51.000 --> 0:06:53.440 we have to do this year not to raise tuition? 0:06:53.560 --> 0:06:56.039 What combination of things? It's not hard to find them 0:06:56.040 --> 0:06:59.640 if you make that your goal. Capital spending is one 0:06:59.680 --> 0:07:03.400 place it's the look. You can have very first rate 0:07:03.440 --> 0:07:06.000 facilities without the gold plating that I've seen in so 0:07:06.040 --> 0:07:10.520 many other places. If you watch things carefully, like staff 0:07:10.600 --> 0:07:15.480 to student ratios, faculty to administrator ratios, things like that, 0:07:15.760 --> 0:07:18.239 it's not hard, as I say, to pick the low fruit. 0:07:18.440 --> 0:07:20.840 One of those places where the fruit may be hanging 0:07:20.960 --> 0:07:22.960 low is in the administrative staff. 0:07:23.280 --> 0:07:27.480 Look at these schools that astonishingly have more administrators than students. 0:07:28.080 --> 0:07:30.320 I mean, a lot of that could disappear. I used 0:07:30.360 --> 0:07:33.600 to say to people, you'd be amazed how much government 0:07:33.680 --> 0:07:34.520 you'd never miss. 0:07:35.160 --> 0:07:38.120 But as is the case elsewhere, it's awfully hard to 0:07:38.160 --> 0:07:40.880 cut your way to success. In the end, it comes 0:07:40.920 --> 0:07:43.920 back to providing a service, a product of real and 0:07:43.960 --> 0:07:47.560 sustainable value, one tailored for today, that will leave you 0:07:47.600 --> 0:07:49.440 in good stead well into the future. 0:07:49.880 --> 0:07:52.480 Twelve years ago, on my arrival, more than forty percent 0:07:52.520 --> 0:07:54.840 of the students were already studying the STEM discipline. Today 0:07:54.840 --> 0:07:57.440 it's closer to two thirds, and the student body is 0:07:57.480 --> 0:08:00.640 thirty percent bigger. But those are students' choices. The students 0:08:00.680 --> 0:08:03.200 are seeing that these are exciting things to learn, exciting 0:08:03.240 --> 0:08:07.160 careers beyond them. And we responded to what we thought 0:08:07.280 --> 0:08:08.679 was going to be that demand. 0:08:09.040 --> 0:08:11.920 And yes, for Mitch Daniels, one investment that is well 0:08:11.960 --> 0:08:15.240 worth the price paid is an education in business, something 0:08:15.280 --> 0:08:18.360 that at Purdue is now granted by the Mitch Daniels 0:08:18.480 --> 0:08:19.520 School of Business. 0:08:19.760 --> 0:08:22.000 We sensed a growing appetite and I think this is 0:08:22.080 --> 0:08:25.040 positive of students who want to study business and hope 0:08:25.160 --> 0:08:28.200 and hope to have a career there. First of all, 0:08:29.160 --> 0:08:31.720 I want them to be grounded in a little broader 0:08:31.760 --> 0:08:35.120 way than much business education today is. They'll have read's, 0:08:35.160 --> 0:08:38.680 some economic history, some economic philosophy. They'll have been able 0:08:38.679 --> 0:08:41.840 to compare systems. They'll make up their own minds which 0:08:41.880 --> 0:08:45.679 system is better for the vast majority of people. But 0:08:46.320 --> 0:08:48.480 they ought to know something about that, not just how 0:08:48.480 --> 0:08:52.760 to read a balance sheet or how to calculate an MPV. 0:08:53.160 --> 0:08:55.319 Beyond that, I want them to leave with a sense 0:08:55.360 --> 0:08:57.840 that this career they've chosen is a noble one. 0:08:58.720 --> 0:09:01.360 Over at King's College, Camber Jillian and Ted is similar 0:09:01.520 --> 0:09:03.800 focused on making sure that students are being prepared for 0:09:03.880 --> 0:09:07.839 a world transformed by technology, but not defined by it. 0:09:08.200 --> 0:09:11.680 British OIGH education is starting to play around with online learning, 0:09:12.000 --> 0:09:15.440 partly as a result of COVID. But the path that 0:09:15.520 --> 0:09:18.240 Oxford and Cambridge are going down and most of the 0:09:18.280 --> 0:09:21.120 other British universities is to say that there is a 0:09:21.120 --> 0:09:25.240 real value in face to face education, not just because 0:09:25.240 --> 0:09:28.640 it's chat GBT resistant, because it is actually by the way, 0:09:29.400 --> 0:09:32.800 but also because face to face education gives kids the 0:09:32.880 --> 0:09:35.920 skills they're going to really need for the future, such 0:09:35.960 --> 0:09:38.720 as the ability to get along with people they might 0:09:38.880 --> 0:09:42.400 disagree with, such as the ability to present an argument 0:09:42.760 --> 0:09:45.640 but to have a socratic debate which doesn't just take 0:09:45.720 --> 0:09:50.120 one side. And any higher education establishment that can teach 0:09:50.200 --> 0:09:54.120 kids to not just be able to amass knowledge in 0:09:54.160 --> 0:09:57.800 a computer, but also the skills to navigate people will 0:09:57.840 --> 0:10:00.160 have an advantage. So we used to talk about the 0:10:00.200 --> 0:10:03.440 digital divide being between kids who knew about tech skills 0:10:03.440 --> 0:10:07.040 and kids who don't. Today there's another digital divide, which 0:10:07.080 --> 0:10:09.679 is the kids who know about tech skills but can 0:10:09.720 --> 0:10:12.680 still talk to humans effectively and manage them and be 0:10:12.800 --> 0:10:16.000 creative as a human. They will be the really advantage 0:10:16.000 --> 0:10:16.800 ones in the future. 0:10:17.120 --> 0:10:20.000 However, the leaders running higher education sort it all out. 0:10:20.240 --> 0:10:22.840 The one thing they agree on is that although it's 0:10:22.840 --> 0:10:25.360 a business, we must never lose sight of the fact 0:10:25.400 --> 0:10:27.760 that it's also much more than a business. 0:10:28.240 --> 0:10:31.360 It's a mission, and it's something which is much higher 0:10:31.400 --> 0:10:35.839 than any commercialization mantra would suggest, and we need to 0:10:35.920 --> 0:10:38.440 keep that in mind above all else. We're really investing 0:10:38.480 --> 0:10:41.000 in kids, but not just in money, in all kinds 0:10:41.000 --> 0:10:44.079 of other ways as well. And yes, we need to 0:10:44.120 --> 0:10:47.320 pay the bills, but it cannot be just about paying 0:10:47.320 --> 0:10:52.240 the bills. It's fundamentally about championing the source of ideas, 0:10:52.280 --> 0:10:53.520 creation and learning. 0:10:53.720 --> 0:10:56.760 Higher education are not supposed to be a business. I 0:10:56.840 --> 0:10:58.600 used to say the same thing about government, But it 0:10:58.640 --> 0:11:01.320 can be much more business of life. It just didn't 0:11:01.360 --> 0:11:04.160 have to in too many cases until recently. I hope 0:11:04.160 --> 0:11:07.280 we don't overreact, though, because the college degree as we've 0:11:07.320 --> 0:11:11.680 known it, if it's well done, I think, is still tremendous. 0:11:11.840 --> 0:11:15.600 There's still a great return on that very expensive investment. 0:11:16.120 --> 0:11:18.200 But in the end, the question of whether a college 0:11:18.280 --> 0:11:21.520 education gives value that justifies the cost is for those 0:11:21.679 --> 0:11:24.960 receiving it to decide. People like becka senior. 0:11:25.080 --> 0:11:29.040 I think the personal growth and professional development that Purdue 0:11:29.040 --> 0:11:31.960 has offered me is definitely going to take me to 0:11:32.880 --> 0:11:34.600 a good career or grad school. 0:11:36.280 --> 0:11:38.560 Coming up the story of a city and an industry 0:11:38.640 --> 0:11:41.400 fighting to regain their pride. That's next on Wall Street 0:11:41.440 --> 0:11:56.640 Week on Bloomberg. This is a story about pride, pride 0:11:56.640 --> 0:11:59.120 and the way up pride that comes before a fall, 0:11:59.440 --> 0:12:02.240 and what its to restore the pride of a business, 0:12:02.320 --> 0:12:04.960 an industry, and a city when they've lost their way. 0:12:05.640 --> 0:12:08.520 Our Bloomberg Radio colleague Michael Barr is a native of 0:12:08.600 --> 0:12:11.719 Detroit who watched his city burn during the Riots of 0:12:11.800 --> 0:12:15.600 nineteen sixty seven, as a once great economic hub edit 0:12:15.679 --> 0:12:17.160 a period of decline. 0:12:17.800 --> 0:12:19.920 I'm going to give away my age because that happened 0:12:19.920 --> 0:12:23.800 in sixty seven and I was three years old, and 0:12:24.080 --> 0:12:28.040 I was in southwest Detroit, and at the time I 0:12:28.080 --> 0:12:33.760 saw the National Guard Enerje go by. Now being a 0:12:33.760 --> 0:12:37.599 stupid kid, I'm thinking, oh Gi, Joe, I didn't realize 0:12:37.640 --> 0:12:42.560 that the dagone city is burning down. Between that, how 0:12:42.600 --> 0:12:46.359 the auto industry really took a hard nosedive. 0:12:47.440 --> 0:12:50.080 The story of Detroit is all the more dramatic given 0:12:50.160 --> 0:12:52.959 what it had once been, the motor city that helped 0:12:53.080 --> 0:12:57.160 drive the US economy. Autoproduction once accounted for almost five 0:12:57.280 --> 0:13:01.520 percent of USGDP and nearly a million jobs at its peak. 0:13:01.640 --> 0:13:05.280 Detroit was the fourth largest city in the nation. That 0:13:05.520 --> 0:13:08.720 would have been a happy story if it had ended there, 0:13:09.160 --> 0:13:14.000 but it didn't. Rising costs, new competition, particularly from Japanese automakers, 0:13:14.280 --> 0:13:17.720 and an oil crisis hit the industry hard, reducing US 0:13:17.760 --> 0:13:21.160 auto industry employees by more than a third in thirty years, 0:13:21.160 --> 0:13:24.040 from more than nine hundred thousand nineteen fifty to run 0:13:24.160 --> 0:13:27.920 six hundred thousand by nineteen eighty two. Today, auto abuile 0:13:27.920 --> 0:13:31.320 production accounts for under three percent of US GDP, and 0:13:31.400 --> 0:13:34.640 Detroit has fallen from fourth to twenty sixth in the 0:13:34.720 --> 0:13:38.880 ranks of US cities. According to current Ford CEO Jim Farley, 0:13:38.960 --> 0:13:42.880 an entire industry, including his own Ford Motor, had failed 0:13:42.880 --> 0:13:46.280 to see and respond to the changes happening around it. 0:13:46.880 --> 0:13:49.080 I think World War two is a big challenge for 0:13:49.120 --> 0:13:52.160 the company, and when Henry Ford the second led the 0:13:52.240 --> 0:13:55.760 company back to a revitalized state through the Whiz Kids. 0:13:55.760 --> 0:13:58.840 We hired all these logistics experts from the army after 0:13:58.880 --> 0:14:01.079 the World War Two and they really created this kind 0:14:01.080 --> 0:14:06.320 of bureaucratic but an incredibly efficient machine. And the company 0:14:06.400 --> 0:14:10.199 was back in the sixties, and then the energy crisis came. 0:14:10.679 --> 0:14:14.920 The company didn't have efficient vehicles, it wasn't competitive among quality, 0:14:14.960 --> 0:14:17.520 and it really lost its way in the seventies, as 0:14:17.559 --> 0:14:20.920 well as the city of Detroit after the riots and. 0:14:22.840 --> 0:14:27.080 We were lost, and from there things just got worse. 0:14:27.880 --> 0:14:30.400 By the end of the twentieth century, it was hard 0:14:30.440 --> 0:14:33.360 to remember where it had all started, back in eighteen 0:14:33.560 --> 0:14:37.920 ninety six, when Henry Ford invented his quadricycle and then 0:14:38.040 --> 0:14:41.400 moved quickly to found the company he named after himself 0:14:41.680 --> 0:14:45.760 in Detroit, introducing his iconic Model T in nineteen oh eight, 0:14:46.320 --> 0:14:49.400 and then inventing the first moving assembly line, which went 0:14:49.440 --> 0:14:52.120 on to produce twenty million of those Model t's in 0:14:52.160 --> 0:14:53.080 the nineteen twenties. 0:14:53.640 --> 0:14:55.600 My grandfather is a good example, you know. He was 0:14:55.640 --> 0:14:57.880 an educated man, but he had a great job at 0:14:57.880 --> 0:15:01.320 Ford and built his family. His kids went to college eventually, 0:15:01.440 --> 0:15:03.120 and just like your family. 0:15:04.480 --> 0:15:07.520 My family was one of those affected by Ford, where 0:15:07.520 --> 0:15:09.800 my dad went to work in lower level management in 0:15:09.840 --> 0:15:13.440 the nineteen sixties and continued until cutbacks in the nineteen 0:15:13.520 --> 0:15:16.840 nineties led him to take a buyout. But long before 0:15:16.880 --> 0:15:19.520 my dad went to work there, long before it all 0:15:19.560 --> 0:15:22.960 went south, Detroit erected an emblem of the growth and 0:15:23.120 --> 0:15:27.000 strength of the new auto industry the Michigan Central station. 0:15:27.640 --> 0:15:30.560 At its peak, over two hundred passenger trains left that 0:15:30.680 --> 0:15:35.120 station every day, carrying over four thousand passengers, and another 0:15:35.200 --> 0:15:38.280 three thousand people worked in the office tower above the station. 0:15:38.840 --> 0:15:42.200 Michigan Central continued it to rain well into the nineteen fifties, 0:15:42.240 --> 0:15:45.040 when Detroit was the home to some two million people. 0:15:45.600 --> 0:15:48.480 But then the American auto industry went into a long 0:15:48.640 --> 0:15:53.320 period of decline as Autoplant after Autoplant began to shut down. 0:15:54.120 --> 0:15:57.840 As the auto industry went, so went Michigan Central. The 0:15:57.920 --> 0:16:00.800 last Amtrak train left the station in nineteen teen eighty eight, 0:16:01.120 --> 0:16:04.440 leaving the Detroit Lambark to fall into disuse and decay, 0:16:05.080 --> 0:16:08.560 its windows broken, its roof open to the sky, It's 0:16:08.600 --> 0:16:14.000 marble scavenged. By twenty thirteen, the Detroit City Council had 0:16:14.080 --> 0:16:17.120 voted to tear the train station down, and it took 0:16:17.160 --> 0:16:20.320 a determined Mayor Duggan leading a group of detroiters to 0:16:20.400 --> 0:16:23.320 restore Michigan Central to what it is again. 0:16:24.800 --> 0:16:28.640 From my first day in office, getting that train station 0:16:28.760 --> 0:16:33.480 reoccupied was a central focus. There was no way it 0:16:33.520 --> 0:16:36.080 was going to be a demolished just meant too much 0:16:36.120 --> 0:16:39.640 to too many generations. And so my first month, Matt Moron, 0:16:39.720 --> 0:16:41.440 the owner, was in my office had a list of 0:16:41.480 --> 0:16:44.640 things that they wanted, and I said, I want one thing. 0:16:44.960 --> 0:16:47.680 I want you to put windows in that abandoned train station. 0:16:48.080 --> 0:16:49.800 And he looked at me like I was crazy, and 0:16:49.840 --> 0:16:51.720 I said, all people see when they look at that 0:16:51.920 --> 0:16:53.000 train station is blight. 0:16:53.160 --> 0:16:55.720 I remember when it was beautiful. 0:16:56.120 --> 0:16:58.120 And so we made a deal on some other things 0:16:58.120 --> 0:17:00.000 where they spend a million dollars to put in windows. 0:17:00.320 --> 0:17:02.920 And when the windows started to go in, it hit 0:17:02.960 --> 0:17:05.919 an electric effect in the city. Everybody driving by in 0:17:05.920 --> 0:17:07.840 the freeway said, oh my God. 0:17:09.720 --> 0:17:12.639 To bring Michigan Central and Detroit back from the brank, 0:17:12.760 --> 0:17:15.840 it took more than private industry and government. Darren Walker 0:17:15.920 --> 0:17:19.200 runs the foundation the Ford family created in the nineteen thirties, 0:17:19.400 --> 0:17:23.040 and he helped lead philanthropies like his to step in. 0:17:23.560 --> 0:17:29.639 The crisis of twenty thirteen was significant, to say the least. 0:17:30.840 --> 0:17:35.680 The moutheisence that was committed was shocking and criminal, and 0:17:35.840 --> 0:17:40.080 of course the city found itself in this very odd 0:17:40.359 --> 0:17:46.439 situation with the museum being an asset of the city 0:17:46.480 --> 0:17:49.720 which was a debtor. The Ford Foundation made the first 0:17:50.240 --> 0:17:52.639 grant one hundred and twenty five million dollars. Of that 0:17:52.720 --> 0:17:58.399 four hundred that helped I believe to insent others to join, 0:17:58.920 --> 0:18:01.359 and it was one of my proudest moment. 0:18:03.480 --> 0:18:06.480 But above all, Detroit needed the auto industry to come 0:18:06.520 --> 0:18:09.240 back to set aside the pride that it caused it 0:18:09.280 --> 0:18:12.439 to underestimate its foreign competitors for too long, and to 0:18:12.480 --> 0:18:14.960 take a hard look at what those competitors were doing 0:18:15.080 --> 0:18:18.720 better than they were where I worked. 0:18:18.440 --> 0:18:21.800 At Toyota a young person with my family from Detroit. 0:18:21.960 --> 0:18:24.480 That was the best car company when I graduated in 0:18:24.520 --> 0:18:29.760 business school, you know, efficient and really focused on the customer, 0:18:30.240 --> 0:18:32.760 and we became the best selling car with the camera 0:18:33.400 --> 0:18:36.480 because we had a better car and it was built 0:18:36.480 --> 0:18:40.240 in Kentucky. You know, ultimately, the competition in America, it's 0:18:40.240 --> 0:18:44.000 a free society, is going to be you know, open market. 0:18:44.359 --> 0:18:48.000 But ultimately, ultimately, in the end of the day, as 0:18:48.000 --> 0:18:53.560 a CEO, I have to be completely competitive on quality 0:18:53.600 --> 0:18:57.359 and cost to their quality and cost, take out all 0:18:57.400 --> 0:19:00.720 the subsidies, all the tariffs. We have to be full competitive. 0:19:01.800 --> 0:19:04.600 If you look at the company, this has happened many 0:19:04.720 --> 0:19:07.880 many times. It's a company that's been through a lot, 0:19:07.960 --> 0:19:11.520 but here we are. There is I think fifty companies 0:19:11.560 --> 0:19:16.320 that have survived after fifty the fifties to be still here. 0:19:17.840 --> 0:19:21.560 The average company now big companies stays on the stock 0:19:21.640 --> 0:19:23.760 to change for like twenty years. You know, we've been 0:19:23.800 --> 0:19:27.359 there for every year. So it's a company though that 0:19:27.440 --> 0:19:32.040 when it gets is back against the wall, something magical happens. 0:19:33.240 --> 0:19:35.719 Where are you on the roadback? How far along that 0:19:35.840 --> 0:19:36.399 road are you? 0:19:36.840 --> 0:19:39.159 Our backs are off the stove pipes. 0:19:40.280 --> 0:19:43.480 Ford, along with GM and Stilantis, has clawed its way 0:19:43.520 --> 0:19:46.040 back from the worst of it, with the three automakers 0:19:46.080 --> 0:19:48.880 selling over six million units in the United States last 0:19:48.960 --> 0:19:51.600 year and reaping more than a half a trillion dollars 0:19:51.680 --> 0:19:55.400 in revenue. They're profitable again, with Ford making over four 0:19:55.480 --> 0:19:58.440 billion dollars in net income in twenty twenty three, all 0:19:58.480 --> 0:20:02.080 of which has brought jobs back as well. Michigan unemployment 0:20:02.119 --> 0:20:04.879 peaked apart from the pandemic in nineteen eighty two at 0:20:04.920 --> 0:20:09.480 sixteen point six percent, well above the national average. Last year, 0:20:09.560 --> 0:20:11.480 it had fallen all the way down to three point 0:20:11.560 --> 0:20:12.159 six percent. 0:20:12.720 --> 0:20:13.040 Done. 0:20:13.160 --> 0:20:16.439 As Mayor Douget explains, one plant at a time. 0:20:18.320 --> 0:20:20.440 But when I started, I sat with Bill Ford. 0:20:20.480 --> 0:20:22.480 I sat with Mary Barr and I sat then with 0:20:22.520 --> 0:20:26.680 Sergio Marcioni, who was running Fiat Chrysler, and I said, look, 0:20:26.800 --> 0:20:28.640 if Detroit's going to come back, we've got to come 0:20:28.640 --> 0:20:30.119 back on our strength. We're not going to be the 0:20:30.200 --> 0:20:34.120 tech cobb, the biomedical hibe. The next time use cite 0:20:34.119 --> 0:20:37.439 of parts plant, please ask them to come talk to 0:20:37.480 --> 0:20:39.440 me first. And it was Bill Ford who was the 0:20:39.440 --> 0:20:43.760 first one had flexingate made parts for Ford trucks. Ultimately, 0:20:43.760 --> 0:20:48.800 we landed a jeep plant with five thousand employees, almost 0:20:48.840 --> 0:20:51.960 all Detroiters being hired. So that was terrific because I 0:20:51.960 --> 0:20:54.639 had a large number of unemployed who had high school 0:20:54.680 --> 0:20:58.679 degrees and we needed good paying manufacturing jobs. Now, with 0:20:58.760 --> 0:21:01.880 the University of Michigan Grads School being built, we are 0:21:01.920 --> 0:21:05.040 now competing for the tech jobs, the jobs of the future. 0:21:05.880 --> 0:21:08.280 And that's exciting as well, because in this city we 0:21:08.320 --> 0:21:11.080 need both. We need the people building the cars, we 0:21:11.200 --> 0:21:15.160 also need people designing the jobs of the future. Son 0:21:15.160 --> 0:21:17.800 on Fourteenth Street, next to the train station, is the 0:21:17.840 --> 0:21:21.560 only public street in America where the road charges your car. 0:21:21.600 --> 0:21:24.240 We have a self charging road while you park there 0:21:24.240 --> 0:21:26.640 because the coil is underneath will charge it. 0:21:26.920 --> 0:21:29.800 That's what we're doing. It's the technology in the future. 0:21:29.920 --> 0:21:33.000 Now once again, as it did over one hundred years ago, 0:21:33.119 --> 0:21:35.760 Michigan Central stands as a symbol for the potential of 0:21:35.800 --> 0:21:39.720 the American auto industry, driven by the vision of another forward, 0:21:40.000 --> 0:21:43.879 William clay Ford, the great grandson of patriarch Henry Ford. 0:21:44.359 --> 0:21:47.040 I think it is you know, obviously it's a family company, 0:21:47.160 --> 0:21:51.200 build's vision, but also the train station is very much 0:21:51.200 --> 0:21:55.200 a symbol, a kind of a mark along our journey 0:21:55.400 --> 0:21:59.959 to create a great company and we avoid a bankrupt 0:22:00.280 --> 0:22:02.479 which was amazing in the early two thousands, has been 0:22:02.520 --> 0:22:05.719 two thousands, but to build a vibrant company, you know, 0:22:06.320 --> 0:22:06.800 in the. 0:22:06.680 --> 0:22:09.040 Ev world, the digital vehicle world. 0:22:09.520 --> 0:22:12.000 The train station felt like the right kind of challenger 0:22:12.080 --> 0:22:14.720 project for four to be part of, so that we 0:22:14.760 --> 0:22:18.159 could be part of the you know, revitalization of Detroit, 0:22:18.200 --> 0:22:21.440 which had really been kind of used by almost the 0:22:21.520 --> 0:22:25.520 national media as a example of the decay of the country. 0:22:26.760 --> 0:22:29.680