Blankfein Says Detroit Can Thrive as NYC Did After 1970s Crisis

Detroit is poised for a resurgence like New York’s after its 1970s near-collapse, said Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein.

Detroit needs help nurturing enterprises that produce jobs -- a goal of the 10,000 Small Businesses program that is graduating about 60 Detroit-area business owners today in a ceremony at Wayne State University in Detroit, Blankfein said.

The program, held in 23 U.S. cities, has pledged $20 million for the Detroit initiative, of which $15 million is for loans to small businesses.

“We didn’t create their business plan; we helped them hone their business plan,” Blankfein told Erik Schatzker of Bloomberg Television in an interview. “That little push over the edge is going to define the success of their business and whether or not they hire 10 more people.”

Blankfein, 59, was joined by Republican Governor Rick Snyder, former New York mayor Michael Bloomberg, who is founder and majority owner of Bloomberg News parent Bloomberg LP, and Warren Buffett, chief executive officer of Berkshire Hathaway Inc. Bloomberg and Buffett are co-chairmen of the 10,000 Small Businesses advisory council.

Creating jobs that can match Detroit’s work force should be a priority, said Bloomberg, who praised Snyder and Mayor Mike Duggan for their efforts to turn around the city, which filed the largest U.S. municipal bankruptcy last year. Bloomberg held a fundraiser for Snyder’s re-election campaign this year.

Resurgent Zone

“You have to have businesses create jobs for the workforce that exists, for the skill sets that are available,” Bloomberg said. He said immigrants and those with lesser job skills will be encouraged to move to Detroit if the city provides housing and safe streets and businesses offer jobs.

“Young people want to go where they can make a difference,” Bloomberg said, noting formerly down-at-the-heels Brooklyn as an example of revitalization. “Crime goes down when people come in and people are on the streets.”

Snyder said many in the U.S. don’t know that Detroit’s downtown business corridor is growing with new jobs and residents spurred by private businesses. Outlying areas lag, however.

“We need to see the neighborhoods come back with job opportunities for people that really haven’t had them,” Snyder said.

Blankfein said Detroit once boasted among the highest per-capita incomes in the U.S.

“They know how to do it here,” he said. “It’s got the geography, it’s got the bones. I don’t see any reason why it wouldn’t come back.”

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