The flight to save Detroit
Aboard the 'distress bus' with the consultants making the weekly commute to Motor City.
(Fortune Magazine) -- Every Monday morning at 7:29 A.M. Northwest flight 533 from LaGuardia to Detroit pulls out of the gate, its first-class cabin filled with bankers, consultants, and lawyers who work with beleaguered auto companies. These days some of them have become such regulars that they've given the DC-9 its own moniker - the Distress Bus.
The situation in Detroit has been bad for a while, but now it's really bad - and not just for the Big Three. Hundreds of auto parts suppliers are even worse off, having spent more than $500 million in the past year in fees to advisors to help them find cash, negotiate with lenders, and plan cutbacks. And while under normal circumstances those advisory firms might send operations experts from their offices on the ground in Detroit, as the crisis has worsened they've been shuttling in the heavy-hitters from New York.
On a recent Monday morning, among the regulars aboard the Bus were Marti Kopacz, Ben Gonzalez, and Steve Korf, a senior team from the distress advisory practice of global accounting firm Grant Thornton. Ford (F, Fortune 500) has hired Grant Thornton to work with suppliers it has identified as being troubled; this trio is now making the trip almost every week. "The ticket agents know me, and the gate agents know me," says Kopacz, co-head of the practice, who is now focusing mostly on Detroit. ("When Marti's on the plane, it's a real distress signal," Gonzalez says.)
As regulars on the flight, they've become accustomed to certain rituals. For one, most passengers on the plane never open a briefcase, since a seatmate could be a rival. "You get used to never doing any work during the flight," says Gonzalez. "You never know when someone from the other side of the negotiating table has their knees in your back."
They've grown used to seeing familiar faces - and sometimes pass the time by identifying deal teams. "There's definitely a deal going down," says Korf, describing three men in the rear of the cabin: "It's the retired CEO, a flashy middle-aged banker, and the disheveled young guy who does all the work." Gonzalez tells Korf of another sighting: a rival from auto consultancy BBK.
From the airport, the various factions are whisked away to client meetings. But they will converge later at the Westin in the suburb of Southfield, where many firms have local offices. The hotel is part of the Southfield Town Center, an office complex struggling to keep tenants as Detroit's economy falters. Blackstone bought it in 2006 and is renovating it in the hopes of a turnaround.