Just because a city existed at one time in history doesn’t mean it always will.

Just ask historians of Pompei, which has been wiped out in several volcanic eruptions, or climb the Aztec or Mayan pyramids and wonder, “what happened to those civilizations?”

Will future historians one day be asking, “what happened in this place called Detroit?”

Many Detroit-area bloggers, and some journalists, are now addressing the question of nature “reclaiming” the city land.

From the Detroit News:

Detroit was once home to nearly 2 million people but has shrunk to a population of perhaps less than 900,000. It is estimated that a city the size of San Francisco could fit neatly within its empty lots. As nature abhors a vacuum, wildlife has moved in.

A beaver was spotted recently in the Detroit River. Wild fox skulk the 15th hole at the Palmer Park golf course. There is bald eagle, hawk and falcon that roam the city skies. Wild Turkeys roam the grasses. A coyote was snared two years ago roaming the Federal Court House downtown.

Vegetation is taking over abandoned houses, factories and apartment buildings, obscuring the ruins that are on the property. If we wait long enough, the earth will swallow these structures much the same way it swallowed the Central and South American pyramids- lost in the jungle for hundreds of years.

What does this say for the future of Detroit?

Should neighborhoods be bulldozed and therefore lost forever to history?

Does a city have a “right” to exist if citizens no longer find it attractive?

For the last few decades, population has been shifting from the industrial Midwest to the South and West as air conditioning (and jobs) have made other climates more hospitable.

Maybe it’s fighting a losing battle to try and “keep” people in Detroit.

In a global economy, some cities are going to be winners and others will not.

Detroit, however, gave it a great run. For decades, Detroit hummed as the center of the auto industry and brought with it high powered jobs, pensions and good lives. I know children of the auto workers who benefited in the heyday of the car companies.

But none of them still live there.

The city is losing its future generations and its talent.

Maybe it’s fitting that the animals are coming back in. Nature finds a way.

On February 15 of this year, I had a guest blogger on this forum, Mr. Dickie Pennyworth, who discussed the state of General Motors and Ford.

Did he have some kind of magic crystal ball?

Because his disgust with the automakers (and their, how shall I say it delicately, lack of coherant management) foreshadowed what we, the taxpayers, are now apparently going to have to deal with with the auto companies.

President-Elect Obama and his staffers have already said that the auto companies are considered a vital component of the U.S. economy. That means only one thing.

BAILOUT

The big three are asking for an additional $25 billion just to stay afloat. And GM has all but blackmailed the government by “warning” that its cash could run out by the end of the year.

But as Dickie pointed out 10 months ago- it will take more than money to make these companies viable.

They need new management. Anyone seeing that change anytime soon?

Instead- the U.S. government will throw money at them. And once they absorb those billions, they’ll ask for more. And more. And more.

Because the ship is sinking and no amount of money can save them (sadly.)

Here’s Dickie’s views from last February. The sentiments ring true today- only the companies are losing even more money now. GM lost over $2 billion in the last quarter. Same with Ford.

Combined- both Ford and GM have lost over $100 billion since 2004.

This is what I have to say to GM; “Screw You.”
By: Dickie Pennyworth
February 15, 2008

I am raising my hand because I want to ask a question.

I would like to know exactly what the [bleeped out] is going on with the executive management at some of America’s most iconic companies. A growing number of these companies are being decimated by international competition, and it does not appear as if management has a read on the challenges confronting their prosperity.

Let’s take a look at the CFO of GM, Mr. Fredrick “Fritz” Henderson.

After enjoying years of growth and market dominance, GM has stumbled upon hard times. The company has been confronted with a lethal cocktail of calamities. Increased environmental regulations, sky-rocketing energy prices, draining materials costs and a weakened consumer environment. These are but a handful of the problems that led to the company’s disastrous fourth-quarter results.

In what is suspected to be the single largest one-year loss in the history of the auto industry, GM reported a total fiscal 2007 loss of over $38 billion, $750 million of that coming from this most recent quarter.

In comments to the press, Chief Financial Officer Fredrick “Fritz” Henderson, said U.S. auto sales were, “operating well below trend and below what we thought in 2005 when we conceived the turn-around plan.”

Hey Fritz, I appreciate the notion of a turn-around, but when you refer to trends and forecasts, where in the [bleeped out] are you getting your information?

When I take a quick glance at the trend in big domestic autos, here is what I come up with. It started in the late 80’s, when Japanese auto-makers took a big bite out of the domestic’s sales.

This market penetration by foreign competition was achieved through advanced technology, delivering a superior product that was more efficient and more reliable. Enter the mid-to-late 90’s, a renaissance of sorts for the domestics, built upon the SUV, but this trend was short lived, with the tech bubble bursting and these larger, gas guzzlers falling out of favor.

With energy prices a serious consumer consideration since our political engagements in the Middle East, this became the primary focus of the auto industry moving into the 2000’s. International auto makers poured massive amounts of energy and resources into developing even higher fuel efficiencies, producing cars that would appeal to a global audience that was sensitive to energy prices.

And how did the domestics respond to the new climate?

Well, in 2005, Ford came up with the brilliant idea of doing a “re-issue” on its old classic muscle car, the Mustang. Here is a car that hasn’t been popular for 20 years, but Ford management thinks it’s a good idea to attach itself to the brand to try and find a way to make a quick and easy buck.

This concept fails on so many levels that it is laughable. Let me see. How’s the gas mileage? Not good. How much does it cost to build? It’s expensive. And our target customer? Middle-Middle, sensitive to costs.

So when I see a trend that is in play here in this industry, Fritz, that is the trend that comes to mind. The 15-year trend of continued domestic market share depreciation and lowered volumes. A trend that is literally slapping you and your company across the face because it is begging to get noticed.

And what about the trend in both crude and gasoline prices, certainly an essential component of any auto-makers forecasting model?

A company the size and stature of GM needs to be built on a foundation of information. Acquiring key data about the most important and critical components of its core business.

And how significant do you think something like the cost of gasoline is to a company like GM? I cannot think of something that should or could be more important to GM than the trends in the energy markets. For GM to let this one slip by is absolutely unforgivable.

A highly detailed and comprehensive forecast in energy and consumer consumption patterns would enable the company to align its core values and directives with the priorities of the customers it favors. And yes, this absolutely does require a mega-cap like GM to showcase some agility.

But Fritz, this is F**KING GM! And you are making $10 million f**kin’ bucks this year, so give me a friggin’ break! I’m sorry, make a tough call, be unpopular, but for the love of God, the company just lost $38 billion in one year on YOUR watch!

Here is what you do tomorrow, Fritz.

Immediately shut down half of the company, because that at least gives GM the chance to sustain itself. (As opposed to eating itself from the inside out.)

Beyond that, you invest all of your resources into developing inexpensive autos that carry ridiculous mileage capabilities. Anything less than a totally radical and unprecedented paradigm change will fall short of enabling this company to move back into the green.

The f**king games are over. It is not pretty out there. Our great American companies are getting slaughtered by foreign invaders. And if they don’t get serious about stepping up their game and truly competing, these great companies will be chopped into tiny little pieces and carted off the battlefield by the new Global Power Players.

End—

I’m sure some of you are bored with these updates on the strike at three Potash of Saskatchewan (POT) plants in Canada. Those plants produce about 30% of Potash’s potash output.

The strike began in early August so it’s been about a month now.

Already, the 5% of Potash’s industrial customers have been put on allocation. These are businesses that distribute caustic potash to food companies, detergent manufacturers and others.

Now, there are signs that Potash will not be able to fill contract obligations with some in the agriculture sector (who use the potash for fertilizer.)

Industries Shutting Down

But the situation is getting worse in the industrial sector. Several of the largest caustic producers are simply shutting down. Without the potash, they can’t make product. The product goes into different food items, including many beverages.

For those who can get it, prices have soared. Who’s going to pass along those price increases and how? In some cases, prices have tripled in only 3 weeks. Will you soon be paying much more for a coke?

The Press Doesn’t Get It

The mainstream press is hardly covering this story. But shortly, it could become the biggest story in agriculture.

Sure, there are other potash suppliers in the fertilizer sector but they’re already strapped and supply is already tight.

What happens when many people are trying to get a product that is in short supply?

Yep. Exactly. The price soars.

Stay tuned.

You would think, with all the doom and gloom in the media and among the populace, that the entire American economic system is collapsing.

While I’m not glossing over the importance of housing or the financial markets to the country, most Americans don’t work for or have anything to do with either sector.

Yes, nearly 70% of Americans own their own home and are affected by the housing bust.

But most of those people go to their jobs everyday at businesses that are, quite frankly, kicking some b*tt right now.

Yes- I’ll say it. American business is alive and well and doing what it has always done: make money.

In just the last few days we’ve heard from some of these companies:

Celanese (CE), the specialty chemical company, reported a record second quarter just three months after posting a record first quarter and talked about business in India as being “robust” and nearly giddy over the Asian growth story.

Caterpillar (CAT) had a record second quarter as more emerging market countries dig, build, and explore for natural resources and infrastructure.

Wabtec (WAB), which makes train parts, including braking systesm, around the world, saw sales rise 20% and increased 2008 guidance.

Bunge (BG) saw profits quadruple as demand remained strong for its oilseeds and grain processing as well as its fertilizers. It also raised guidance for 2008 and is investing heavily into its businesses.

Woodward Governor (WGOV), which manufactures energy control for engines, aircraft and industrial turbines- which are big right now with the push to alternative energy and wind power, saw sales rise 23% and earnings grow 38% year-over-year. The company raised full-year 2008 guidance.

These are just a few of those that reported in the last few days and that, while being cautious given the state of the economy, are still growing their businesses and thriving.

Add on to that companies that are taking advantage of the China explosion, such as McDonald’s (MCD) and Yum Brands (YUM), and everything isn’t looking so gloomy after all.

The economy isn’t collapsing

American businesses are competitive. The weak dollar is helping with exports. We still have products that people in the world want.

Finally, we will get beyond the obsession with housing and, frankly, hedge funds and private equity. After the dot-com bust, MBA students started taking jobs in record numbers with hedge funds and private equity groups. Who could blame them as that’s where the huge money was.

Heck, only a few years ago, business schools were offering classes on real estate and how you could become a real estate developer.

The problem with that is that real estate doesn’t produce anything. Yes, jobs are created and money is moved around. But in order for America to be competitive, it needs to produce something. Selling each other property isn’t going to cut it against the Chinese.

This housing bust is taking the glamour out of real estate. Finally. Our most productive people need to, once again, focus on what America does best.

Produce.

The companies listed above are doing just that. These companies are kicking b*tt.

All is not horrible in the American economy right now. Let’s focus on what is working and grow it.