Beltway Confidential

Bailed-out auto companies come to Detroit’s rescue

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Beltway Confidential,Michal Conger

Two bailed-out auto makers are part of a group of corporate donors coming to Detroit’s aid by replacing the Motor City’s entire fleet of 23 ambulances along with 100 police cars.

Eight companies are donating a total of $8 million as part of Detroit Mayor Dave Bing’s Active and Safe campaign, Bing announced today. The mayor hopes the initiative will raise $60 million for the struggling city’s recreation centers and public safety.

The donors include General Motors and Chrysler, which both received federal bailouts in 2009. Chrysler received $12.5 billion from the federal government, $1.3 billion of which taxpayers won’t get back. And General Motors received $49.5 billion, $29 billion of which had been recovered as of February.

City officials said in the past three months, emergency responders have been operating with no more than 14 ambulances, instead of the 19 they are supposed to have, because their fleet is constantly breaking down, according to Reuters.

Today is also Detroit’s first day under emergency manager Kevyn Orr, appointed by Michigan Gov. Rick Snyder to keep the city from going bankrupt. The city, once the hub of the U.S. auto industry, faces a $100 million budget deficit this fiscal year and has $14 billion in long-term debt and liabilities, according to state government, Reuters reports.

In fact, Orr, a bankruptcy lawyer, represented Chrysler during its restructuring in 2009. His appointment made Detroit the largest city in the country to undergo state takeover.

The other donors contributing to the fleet replacement are:  Blue Cross Blue Shield of Michigan; Ford Motor Company; Quicken Loans, Inc.; The Kresge Foundation; Penske Corporation; and Platinum Equity, LLC. All three auto makers have their headquarters in the Detroit area.

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