Charlie Rose talks to ... Rick Snyder

The governor of Michigan discusses the causes and symptoms of Detroit’s bankruptcy and makes a case for its future

Was there a straw that broke the camel’s back?

The way it came down, there were no other viable options. If you look to a straw, what I would say is it was potentially some of the creditors running to court to file lawsuits against the city, against me, against anybody in sight, rather than coming to the table to try and negotiate settlements. As a practical matter, having dozens of lawsuits filed by creditors was going to create an environment of nothing being done, and we’ve got action to take.

How did Detroit wind up here?

Well, this was 60 years of decline, if you step back and look at it. You can go back to 1950, when there were almost 2 million people in Detroit. [Its population is now 700,000.] There are a number of structural things that went on in Detroit’s economy, but there were also a lot of neglected decisions that resulted in this tragic situation. The main thing is, enough avoiding decisions. There are very exciting things to look forward to.

Like what?

People like Dan Gilbert have bought building after building — and not just bought them but put businesses in them that are thriving. The Madison Building is full of startups. The Ilitch family is doing a new hockey arena. Young people are flocking to Detroit, where occupancy in midtown and downtown is over 90 percent.

What’s next now that Detroit’s declared bankruptcy?

In Chapter 9, what really takes place is the city has an opportunity to present a plan for the future that addresses two things. One, it addresses the crushing debt burden, an $18 billion question. The resources aren’t there. Detroit is broke. The second piece, that I consider even more important, is it’s about presenting a plan for services to citizens. And the current service level being delivered in Detroit is absolutely unacceptable.

Can you elaborate?

Fifty-eight-minute response times for police calls; 40 percent of streetlights out; 78,000 blighted structures. Those problems need to be resolved, and so the city gets to present a plan — not just on the debt side but for better services.

Are cuts in retirement benefits for city employees inevitable?

Most likely that would have to be the case. The difficult question in this is the retiree question, because you’ve got people that worked many years for the city, and they’re fixed-income people. I appreciate that. My parents were on Social Security, had savings. One thing that should give the retirees not necessarily comfort but some thoughts about how we’re trying to work through this — the first thing we did in the bankruptcy petition was ask for the judge to appoint someone to represent the retiree creditors so they have a voice at the table. Secondly, to the degree their pension plans are funded, that’s not included in the bankruptcy. The funded portion of the plans will still be there.

How long will the comeback that you envision take?

When they write Detroit’s history in 10 or 20 years, they’ll probably say the day we declared bankruptcy was the low point in the city’s history. If I hadn’t made that decision, Detroit would have gone downhill the day after. Now we’ve got a chance to stabilize the city.

Watch Charlie Rose on Bloomberg TV Weeknights at 8 p.m. and 10 p.m. ET


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