August 11, 2009

Mayor warns Detroit is going broke

Detroit Mayor Dave Bing warned union workers the city is going broke and layoffs or pay cuts are the only way out of the fiscal crisis.

After an hour-long meeting with about 50 union leaders, Bing said, you are talking about running out of cash in the next 60-70 days.

He said a 10 percent pay cut by Aug. 28 would keep the city out of receivership. If the city goes officially broke, however, all bets are off, he said.

Bing predicted 1,000 of the city's 13,000 workers would lose their jobs even if unions agreed to pay cuts, The Detroit News reported Tuesday.

Union leaders reacted angrily to Bing's position. Henry Gaffney, president of the Amalgamated Transit Union called for Bing to do your due diligence.

John Riehl, president of the American Federation of State, County and Municipal Employees Local 207 said the mayor was bluffing.

The city can always borrow money on anticipated revenues and get loans. That's just business as usual, he said.