Detroit, Michigan- home of the struggling U.S. auto industry- has fared worst than most in the face of the current economic climate. We spoke with portfolio manager Christopher Ruth of Comerica Asset Management– based out of Detroit, Michigan- about how the city is handling the downturn, and what the outlook is for the future:
Mr. Ruth: This current economic downturn is on par with what happened back in the horrible recession of 1981 and 1982. Michigan’s unemployment rate is getting right up to where it was back in the early 1980s…The difference this time around, for Michigan in particular, is that the automotive industry going into this recession is a smaller portion of the Michigan economy than it had been in the early 1980s. The current economic decline is still very painful and the Michigan unemployment rate, currently above 14%, is certainly very troubling. We are likely closer to the ultimate bottom caused by the automotive industry this time than what occurred in the 1980s. The other big difference today is that no one has the feeling that the auto industry will bounce back, which everyone thought back in the early 1980s. This time around, we all know it’s different and while we are relieved that at least auto sales have stabilized, it’s now, “Show me that the government’s intervention can actually work out.”
For the Investing Strategies report, including a full interview with Mr. Ruth, as well as portfolio managers from a variety of portfolio focuses and investment styles, click here.
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