Sergio Marchionne, CEO of Fiat and Chrysler Group. Larry W Smith / EPA
Sergio Marchionne, CEO of Fiat and Chrysler Group. Larry W Smith / EPA

Why Detroit's car bosses can help restore its economy



Strange, isn't it, that one of the seven cities twinned with Detroit is none other than Dubai. Apart from a rather flat topography and the fact that Dubai has a Motor City while Detroit is Motor City, I can't think of a single thing the two places have in common.

And the enormous differences between these cities are only made more stark by Dubai's recent financial regeneration. It's a place on the up, while Detroit is so far down the tubes that, only a couple of months ago, Michigan state senator Rick Jones suggested that the only way to save it was to get rid of it entirely, dissolving it and having it swallowed up by the surrounding Wayne County.

It's depressing to see a city that was once so proud now ravaged by violent crime, absolute poverty and very little to offer its youth in the way of hope. After having spent just four days here, I am ready to return to the warmth of the country I now call home. Motor City has stalled and I'm not sure it will ever be able to prime its fuel pumps and restart its engine.

So who is to blame for this turnaround of fortunes for Detroit? GM? Ford? Chrysler? While it would be easy enough to point the finger at any of them, Detroit's problems have been steadily building for decades. The city's revenues have been hammered by the collapse of manufacturing, plummeting property values and the mass exodus of people to the suburbs. And, all the while, Detroit's costs have not decreased at the same rate. It's still paying out pensions, entitlements and salaries far larger than it could hope to afford.

Can the car companies do anything to help? Not really, as anything now would be a case of "too little, too late". The GM Foundation, for instance, donates millions of dollars every year to various projects and economic growth institutions but it's merely a drop in the ocean. Instead, Chrysler and General Motors, who both faced bankruptcy just over three years ago and had to be bailed out by the American taxpayer, are doing all they can to survive themselves.

Ford, despite being in dire financial trouble like GM and Chrysler when the global crisis hit, didn't file for bankruptcy, nor did it have to go cap-in-hand to Obama's administration for a bailout. But what saved Ford was some extremely complex and clever financial restructuring, which had begun long before the other two turned their pockets inside out. Ford borrowed some US$12 billion (Dh44 billion) at the peak of the credit bubble, right before the recession hit and vehicle sales dropped by more than a third. By maintaining liquidity, Ford's financial strategy paid off, but it was by no means free from guile.

Chrysler and GM only survived the crisis by changing the ways in which they worked. Like many colossal manufacturing firms, they had allowed complacency to get the better of them, churning out cars that simply could not compete with the Europeans when it came to quality or reliability. There was so much time and money being wasted that only a sea change approach would ensure their survival, so when Fiat took control of Chrysler and the government sent its own people into GM, attitudes had to change. And now the management is talking about it quite candidly.

So the private jets for the companies' top management people were parked and processes were examined, changed and streamlined. Both firms had to adopt an attitude of "if it doesn't earn us money, then we have to change it or stop doing it."

This change in attitudes has probably, for me at least, been most manifest in the way the top brass is openly contrite about the past. When the Cadillac ATS won the Car of the Year award at the Detroit motor show, there was no bullish posturing or yeeehaa-ing. Instead there was the occasional, silent, fist being punched into the air and a sense that, while it was indeed fabulous to be recognised for a great job, Cadillac and the rest of GM had the narrowest of escapes and only survived because the government had to stop its collapse. In so many ways, these companies deserved what happened to them, but the people who depend on them for employment deserved better.

So now we have GM's hierarchy practically admitting that the previous ranges of cars really weren't that good after all. And this turnaround in attitude is what's responsible for the dramatic improvements being seen wheeled off the production lines right now. Take the new Corvette Stingray, for instance. No matter what you might think of its physical looks, to sit inside that car is to experience intelligent design and modern, quality materials that mean it can actually compete with the best that there is.

Ryan Vaughan, Chevrolet's interior design manager, told me: "We had previous constraints removed and we were able to approach the design of this car with pretty much a clean sheet of paper. And one of the stipulations we set ourselves was that, if it looked like it was made from something, it had to be made from it. If you see carbon fibre on a Stingray, it's real. The leather is much better quality and we've given the plastics a softer feel."

The results are extremely impressive, even to a hardened hack like myself. And even though GM doesn't expect to sell many Stingrays in the grand scheme of things, it still feels confident that sales growth across the board will be experienced this year.

Doug Parks has been an engineer at GM for 28 years and was recently promoted to vice president of product programs. Talking of the company's bankruptcy to the Detroit Free Press this week, he said: "I was embarrassed. It was clearly our fault. Lots of people have been broomed. You can't let anybody else own that or try and fix that for you. That was ours; we own it, and we're going to make sure it never ever happens again."

On the face of things, these are not mere empty words. GM has had to swallow its pride and Chrysler's new approach to honesty when it comes to product development is, indeed, refreshing. However, from what I have seen of the city that's home to both of them, much more is needed. The problems faced, the extent of urban decay all around, the huge numbers of people forced to sleep rough on the streets in sub-zero temperatures - these things are all way beyond the abilities of a few car companies to solve. But at least they've started fixing themselves.

Should late investors consider cryptocurrencies?

Wealth managers recommend late investors to have a balanced portfolio that typically includes traditional assets such as cash, government and corporate bonds, equities, commodities and commercial property.

They do not usually recommend investing in Bitcoin or other cryptocurrencies due to the risk and volatility associated with them.

“It has produced eye-watering returns for some, whereas others have lost substantially as this has all depended purely on timing and when the buy-in was. If someone still has about 20 to 25 years until retirement, there isn’t any need to take such risks,” Rupert Connor of Abacus Financial Consultant says.

He adds that if a person is interested in owning a business or growing a property portfolio to increase their retirement income, this can be encouraged provided they keep in mind the overall risk profile of these assets.

Company Profile

Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed

Company Profile

Company name: Hoopla
Date started: March 2023
Founder: Jacqueline Perrottet
Based: Dubai
Number of staff: 10
Investment stage: Pre-seed
Investment required: $500,000

Kill

Director: Nikhil Nagesh Bhat

Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal

Rating: 4.5/5

HOW TO ACTIVATE THE GEMINI SHORTCUT ON CHROME CANARY

1. Go to chrome://flags

2. Find and enable Expansion pack for the Site Search starter pack

3. Restart Chrome Canary

4. Go to chrome://settings/searchEngines in the address bar and find the Chat with Gemini shortcut under Site Search

5. Open a new tab and type @ to see the Chat with Gemini shortcut along with other Omnibox shortcuts to search tabs, history and bookmarks

So what is Spicy Chickenjoy?

Just as McDonald’s has the Big Mac, Jollibee has Spicy Chickenjoy – a piece of fried chicken that’s crispy and spicy on the outside and comes with a side of spaghetti, all covered in tomato sauce and topped with sausage slices and ground beef. It sounds like a recipe that a child would come up with, but perhaps that’s the point – a flavourbomb combination of cheap comfort foods. Chickenjoy is Jollibee’s best-selling product in every country in which it has a presence.
 

COMPANY PROFILE

Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded

Company Profile

Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices

LUKA CHUPPI

Director: Laxman Utekar

Producer: Maddock Films, Jio Cinema

Cast: Kartik Aaryan, Kriti Sanon​​​​​​​, Pankaj Tripathi, Vinay Pathak, Aparshakti Khurana

Rating: 3/5

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

LAST-16 EUROPA LEAGUE FIXTURES

Wednesday (Kick-offs UAE)

FC Copenhagen (0) v Istanbul Basaksehir (1) 8.55pm

Shakhtar Donetsk (2) v Wolfsburg (1) 8.55pm

Inter Milan v Getafe (one leg only) 11pm

Manchester United (5) v LASK (0) 11pm 

Thursday

Bayer Leverkusen (3) v Rangers (1) 8.55pm

Sevilla v Roma  (one leg only)  8.55pm

FC Basel (3) v Eintracht Frankfurt (0) 11pm 

Wolves (1) Olympiakos (1) 11pm 

THE BIO: Martin Van Almsick

Hometown: Cologne, Germany

Family: Wife Hanan Ahmed and their three children, Marrah (23), Tibijan (19), Amon (13)

Favourite dessert: Umm Ali with dark camel milk chocolate flakes

Favourite hobby: Football

Breakfast routine: a tall glass of camel milk

Profile

Company: Justmop.com

Date started: December 2015

Founders: Kerem Kuyucu and Cagatay Ozcan

Sector: Technology and home services

Based: Jumeirah Lake Towers, Dubai

Size: 55 employees and 100,000 cleaning requests a month

Funding:  The company’s investors include Collective Spark, Faith Capital Holding, Oak Capital, VentureFriends, and 500 Startups. 

How to become a Boglehead

Bogleheads follow simple investing philosophies to build their wealth and live better lives. Just follow these steps.

•   Spend less than you earn and save the rest. You can do this by earning more, or being frugal. Better still, do both.

•   Invest early, invest often. It takes time to grow your wealth on the stock market. The sooner you begin, the better.

•   Choose the right level of risk. Don't gamble by investing in get-rich-quick schemes or high-risk plays. Don't play it too safe, either, by leaving long-term savings in cash.

•   Diversify. Do not keep all your eggs in one basket. Spread your money between different companies, sectors, markets and asset classes such as bonds and property.

•   Keep charges low. The biggest drag on investment performance is all the charges you pay to advisers and active fund managers.

•   Keep it simple. Complexity is your enemy. You can build a balanced, diversified portfolio with just a handful of ETFs.

•   Forget timing the market. Nobody knows where share prices will go next, so don't try to second-guess them.

•   Stick with it. Do not sell up in a market crash. Use the opportunity to invest more at the lower price.

COMPANY PROFILE

Name: Haltia.ai
Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends

GULF MEN'S LEAGUE

Pool A Dubai Hurricanes, Bahrain, Dubai Exiles, Dubai Tigers 2

Pool B Abu Dhabi Harlequins, Jebel Ali Dragons, Dubai Knights Eagles, Dubai Tigers

 

Opening fixtures

Thursday, December 5

6.40pm, Pitch 8, Abu Dhabi Harlequins v Dubai Knights Eagles

7pm, Pitch 2, Jebel Ali Dragons v Dubai Tigers

7pm, Pitch 4, Dubai Hurricanes v Dubai Exiles

7pm, Pitch 5, Bahrain v Dubai Eagles 2

 

Recent winners

2018 Dubai Hurricanes

2017 Dubai Exiles

2016 Abu Dhabi Harlequins

2015 Abu Dhabi Harlequins

2014 Abu Dhabi Harlequins

Our legal consultant

Name: Dr Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

Mrs Chatterjee Vs Norway

Director: Ashima Chibber 

Stars: Rani Mukerji, Anirban Bhattacharya and Jim Sarbh 

Rating: 2/5

Women & Power: A Manifesto

Mary Beard

Profile Books and London Review of Books 

TWISTERS

Director: Lee Isaac Chung

Starring: Glenn Powell, Daisy Edgar-Jones, Anthony Ramos

Rating: 2.5/5

Specs: 2024 McLaren Artura Spider

Engine: 3.0-litre twin-turbo V6 and electric motor
Max power: 700hp at 7,500rpm
Max torque: 720Nm at 2,250rpm
Transmission: Eight-speed dual-clutch auto
0-100km/h: 3.0sec
Top speed: 330kph
Price: From Dh1.14 million ($311,000)
On sale: Now

Fighting with My Family

Director: Stephen Merchant 

Stars: Dwayne Johnson, Nick Frost, Lena Headey, Florence Pugh, Thomas Whilley, Tori Ellen Ross, Jack Lowden, Olivia Bernstone, Elroy Powell        

Four stars

THE HOLDOVERS

Director: Alexander Payne

Starring: Paul Giamatti, Da'Vine Joy Randolph, Dominic Sessa

Rating: 4.5/5

At Everton Appearances: 77; Goals: 17

At Manchester United Appearances: 559; Goals: 253

Dengue fever symptoms

High fever (40°C/104°F)
Severe headache
Pain behind the eyes
Muscle and joint pains
Nausea
Vomiting
Swollen glands
Rash

Ain Issa camp:
  • Established in 2016
  • Houses 13,309 people, 2,092 families, 62 per cent children
  • Of the adult population, 49 per cent men, 51 per cent women (not including foreigners annexe)
  • Most from Deir Ezzor and Raqqa
  • 950 foreigners linked to ISIS and their families
  • NGO Blumont runs camp management for the UN
  • One of the nine official (UN recognised) camps in the region
Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

ROUTE TO TITLE

Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2

Who is Ramon Tribulietx?

Born in Spain, Tribulietx took sole charge of Auckland in 2010 and has gone on to lead the club to 14 trophies, including seven successive Oceania Champions League crowns. Has been tipped for the vacant New Zealand national team job following Anthony Hudson's resignation last month. Had previously been considered for the role. 

EMIRATES'S REVISED A350 DEPLOYMENT SCHEDULE

Edinburgh: November 4 (unchanged)

Bahrain: November 15 (from September 15); second daily service from January 1

Kuwait: November 15 (from September 16)

Mumbai: January 1 (from October 27)

Ahmedabad: January 1 (from October 27)

Colombo: January 2 (from January 1)

Muscat: March 1 (from December 1)

Lyon: March 1 (from December 1)

Bologna: March 1 (from December 1)

Source: Emirates

Company Profile

Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government


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