Detroit's bankruptcy woes: five key things to know

It’s a city in continued crisis: There’s historic population loss, an auto industry in peril but fighting back, a former mayor heading to federal prison for 28 years, notorious infighting between city hall and its unionized workforce, and pending insolvency that would make Detroit the largest US city to declare Chapter 9 bankruptcy.

1. How did Detroit’s financial situation get so dire, and does it hold lessons for other cities?

Paul Sancya/AP/File
Downtown Detroit as seen from Belle Isle park in Detroit, Sept. 12, 2012.

Most experts point to a number of reasons for Detroit’s woes: corruption, financial mismanagement, an automotive industry that shed jobs rapidly from the early 1980s to now. All this was exacerbated by population loss, which has crippled the city. Detroit has steadily lost population since the 1950s, going from a peak of 1.9 million residents to fewer than 700,000 today.

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