During the height of the recent economic recession, the U.S. automotive industry was mired in debt and lost sales, prompting the federal bailout of several carmakers. The bailout generally has been considered a success, and two of the beneficiaries, Chrysler and General Motors (GM) emerged from their bankruptcy status in 2009.
But the struggles of the industry had effects beyond automotive production lines, especially in the heart of the U.S. car culture, Detroit, Mich. Facing lost tax revenue and a negative spiral of abandoned properties, the city ultimately was forced to declare bankruptcy itself. As it struggles to exit that state, it has turned to carmakers for both inspiration and some cash.
In particular, in the city’s bankruptcy hearings, the artworks held in the Detroit Institute of Arts were listed as assets, which an auction house valued as worth $867 million. Selling those pieces of art might go a long way toward moving the city out of the red and into the black. But simply selling the art, including paintings by Van Gogh, Matisse, and Bruegel, also would leave the city devoid of an important cultural attraction. According to museum staffers, it likely would lead to the closure of the Detroit Institute of Arts altogether, because its donors would feel angry and betrayed by the loss of those treasured artworks. Furthermore, they have argued that public access to art is impossible to value in monetary terms, so selling these pieces as if they were any other asset does not make sense.
The solution, for now, is that the Big 3 automakers that call Detroit home, GM, Ford, and Chrysler, will donate a combined $26 million to help kick start the art institute’s $100 million fundraising drive. In so doing, the Detroit Institute of Arts would come closer to being self-sustaining, rather than relying as heavily on the city for funding. In turn, that shift would lessen a significant cost that currently appears on the city’s balance sheet.
The largesse of the car companies is not totally due to civic pride though. In return for their charitable contributions, Ford, Chrysler, and GM get a tax write off. Perhaps even more significant, part of the earnings retained by the city will go to offset pension losses for retirees. Moreover, the deal is not a lock yet; a court hearing still must approve all the details of the plan. But for now, the question before Detroit is both simple and complex: How much is public art worth?
Source: Steven Yaccino, “Detroit Automakers Pledge $26 Million to Help Save City’s Art,” The New York Times, June 9, 2014, https://www.nytimes.com