20 December 2009

Can Detroit Be Saved?

An Interview With Dave Bing
The Wall Street Journal

Dave Bing has just signed on to four years of maybe the most futile and thankless job in America: mayor of Detroit. What in the world was he thinking?

"I wouldn't have taken this job if this wasn't doable," he tells me. "I finished basketball in 1978, then went into my own business in 1980 and did it for 29 years. . . . Now I get to the end of that career and probably should have retired. But there was a calling greater than anything that I ever envisioned, and that was to help bring this city back."

In November, 57% of the Detroit voters bought into his tough-love reform agenda. Mr. Bing replaced the disgraced Kwame Kilpatrick, who went to jail earlier this year for spending city funds on his girlfriends—just the publicity boost the city already flat on its back didn't need.

The mayor's office is in the heart of downtown Detroit, which has shrunk to about an eight-block radius of high rise office towers, upscale restaurants and stores. Yet everything in Mr. Bing's office, including the furniture, is, in the words of his press secretary, "spartan." There's no money to be wasted on redecorating, the mayor tells me. He's not taking a salary. At 66, with his horn-rimmed glasses, graying hair and tailored business suits, Dave Bing looks ready for business.

His highest priority is balancing a budget that is swimming in red ink. "We have a $325 million deficit, and 2010 doesn't look any better. Right now revenue growth is still negative. We're taking in less money each year. We can't rebuild this city by constantly cutting, but in the short term, we don't have an option," he says.

How much has to be chopped? The major says that at its peak Detroit had a $3.6 billion budget. He hopes to get it down to $2.9 billion, almost a 20% real cut.

Dave Bing is no Milton Friedman when it comes to economic solutions. He's praying for lots of federal aid to help the city pull out of its ditch, he wants to borrow against future tax revenues, and he hasn't ruled out tax increases "if they have a sunset" to pay the city's bills. He believes it's a core responsibility of government to help people.

Yet Mr. Bing is a realist, something Detroit hasn't had at the helm for a long time. "We've been paralyzed by a culture in the city of Detroit, and maybe the state of Michigan, of entitlement," by which he means ever-rising union wages. "Our people, I don't believe, truly understand how dire the situation is. There are ugly decisions that need to be made and I'm surely not going to be popular for making them. But I didn't take this job based on popularity."

One group that surely isn't a fan is the public employee unions. He grumbles that there are 17 unions with over 50 separate bargaining units. "I can give you a data sheet that will show you we've got several of those bargaining units with less than 100 people, and each one of them has a president that's paid by the city to negotiate against the city," he says. "Coming from the private sector, I find that insane."

Mr. Bing's gladiator-like brawls with the union bosses have drawn national attention. Earlier this year, he forced nonunionized city workers to take a 10% pay cut and unpaid furloughs. Now he's demanding the same pay concession from the unions. At one point the union got so fed up with Mr. Bing's refusal to buckle to their demands that they asked the courts to toss him in jail for violating their contracts. That didn't happen, but the unions did win a court challenge when the mayor refused to collect union dues out of city paychecks.

"Today in the city of Detroit," he tells me, "our union employee benefits cost 68% of what their base wage is. I don't think that happens in any other place in the country." To give a sense of how excessive those pay packages are, he adds: "When you look at one of the most dominant labor unions in the world, the UAW, they're nowhere close to what we give our city workers."

The mayor is quick to remind me that he is not antiunion. He joined the NBA players association in the late 1960s and hired a mostly unionized workforce at his firm, Bing Steel. But for months he has been locked in tedious negotiations and the aggravation is starting to show.

"The problem for the most part," he argues, "is poor union leadership. I think the rank-and-file aren't being told the truth. And I'm not going to B.S. anybody. I'm going to tell them the truth. They can't continue to ride this gravy train forever."

He poses this question to the city workforce: "Are you better off having a job and making 90% of what you're at today or having no job at all? To me, you don't have to be a brain surgeon to say I'll take that 90%."

Could Detroit be the first major city in America to actually declare bankruptcy, I ask hesitantly. His honesty surprises me: "I hope not, but I wouldn't rule it out if we don't get concessions from the unions." He may be using the threat of bankruptcy, which is a poison pill for unions, as a bargaining chip. "This would void all the city contracts," he insists. "That means workers have to make a decision: Do you want to start with zero, or do you want to start from where you are and give up just a little bit? Under bankruptcy you start with zero." Mr. Bing is a hardliner.

After he retired from the NBA, Mr. Bing started a steel company with $250,000 of his own money. He lost half of it in his first year, 1980, the worst steel recession of the 20th century. Bing Steel eventually grew into a $60 million enterprise.

How important is his business experience in running Detroit? "A city is a business," he replies. "It's a $3 billion plus business. The past administrations didn't understand that, and I think that's got us where we are." Voters realize that private "businesses create jobs," he says. "That's where wealth is come from, and for too long we've treated them like enemies."

He wants to make the city "more business friendly," but how? "Take the licensing and permitting process that people have to go through," he explains. "I've heard nothing but war stories. So I'm focusing on how we can help businesses cut through the red tape in city government. As an entrepreneur, if you have to spend all of your time trying to get licensing and permits . . . guess what you do? You're going somewhere else. We've got to make Detroit a place where businesses can make a profit again," he says hopefully.

Mr. Bing is brimming with other ideas to make Detroit more livable. One challenge he faces is how to successfully downsize. "We have a city that still has a footprint from when we had almost two million people. In the 2010 census, we'll be lucky if we've got half of that population with the same footprint and infrastructure."

He wants to tear down buildings and dilapidated homes and convert thousands of acres to "parks and greenspace." He also wants to privatize public services to save money and create a new cosmopolitan environment that will attract middle-class and affluent families that have fled to the suburbs.

"We have to be honest with ourselves and say we're no longer going to be the motor capital or the manufacturing capital of the world," Mr. Bing says. "But I think we can be the entertainment capital of the Midwest. We have casinos, great hotel accommodations, great restaurants, we're one of the few cities that has every professional sports team.

"We're one of the only cities in the country that has an international waterway—so there's Detroit and then across the river, there's Windsor, Canada," he says pointing out the window to the tall buildings across the border. "We're losing a lot of our young talent who graduate from our top universities, because they don't see the opportunity for jobs in the future here. That's got to change."

He has a clear prescription of how to bring the middle class back: "I think public safety is number one. A productive school system is number two. Because without either one of those being effective and efficient, you can forget everything else." It sounds like a plan right out of the Rudy Giuliani playbook. He has brought in a new police chief and early results look encouraging.

Still, Detroit has one of the highest murder rates in the nation. The public schools are disastrous, with almost two of three inner city Detroit teenagers failing to earn a high school degree.

Mr. Bing believes the solution lies in improving public schools, but also investing in parochial and charter schools. "I'm for more choices. Getting families into the best educational system for their young people is critical." Schools aren't under his command; they are run by a school board that is dominated by the teacher's unions. "One of my goals is to have mayoral control" of the school system, he says.

Mr. Bing also feels passionately about the value of sports in the lives of young people. Before he became mayor, he donated and helped raise money to keep high school sports programs in Detroit.

"I think sports are critical," he says. "I don't care whether it's in the inner city or not, if the only thing that we prepare young folks today for is classroom activities they lose a lot. There's so much you can learn in sports that you don't learn from academics. It's understanding how to get along and communicate with people. Being part of a team. Sports gives you a sense of what it's like to win, and how you handle losing and setbacks, which life is full of."

Many people don't know that Dave Bing faced—and improbably overcame—major adversity of his own on the road to stardom. "When I was a five-year-old kid," he retells the story, "I had a nail stuck in my eye. So I had poor vision. The injury affected my depth and peripheral vision."

It is nothing short of a miracle that a man could become a world-class shooter with that kind of disability. And then in his fifth year in the NBA he was poked in the eye, which caused a detached retina. The doctors said he was done with basketball. "I played another seven years after that." Then he becomes philosophical: "So you know, it's easy for people to have problems and feel sorry for themselves, and quit. That just wasn't in my nature."

I can't resist asking Mr. Bing about one of the few decorations in his office: a large photo of 50 of the greatest NBA players of all time. There gathered are Oscar Robertson, Bill Russell, Elgin Baylor, Elvin Hayes and, yes, Dave Bing. "I was and still am friends with many of those guys," he says. How would they have done against the current crop of players? "Oh there's no doubt that today's players are far superior athletes and leapers. But now it's an individual sport. Back then we played together as a team. That's why we might have beaten them," he chuckles.

Mr. Bing reminds me that he was the No. 2 player taken in the 1968 NBA draft, after starring at Syracuse. His first salary was just $15,000. Today, the No. 2 pick in the draft earns close to $15 million.

So what made Dave Bing so great at basketball? He's not that tall—6'3"—though he does have big hands, the trademark of a great hoops star. "I think one of my best attributes was intelligence," he explains. "In a lot of cases that is what truly separates the superstars from the rest. That and I had a good work ethic."

Then he seems to be thinking back to the glory days and adds: "I also had good jumping ability, I mean I didn't seem to fall. I could slash to the basket and score. And I wasn't afraid to take the winning shot."

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