Dan Gilbert of QuickenLoans and Rock Ventures and Berkshire Hathaway’s Warren Buffett, representing a combined $73 billion, sat down onstage for a chat at the College for Creative Studies in Detroit. Their main topic of conversation was the city. Dan Gilbert, through Rock Ventures, owns 60 buildings and 9 million square feet in downtown Detroit, and his net worth is $4.2 billion. Buffett, the Oracle of Omaha, is currently worth $68.9 billion.
Buffett said Detroit, which filed for bankruptcy in 2013, saw its “financials get out of hand, and that’s happened to plenty of cities before, ” Buffett mentioned New York City in the 1970s. Although Buffett sounded optimistic, noting the inherent strength in Detroit as the headquarters of many companies. Bankruptcy, he added, is not necessarily a terrible thing: “As long as bankruptcy is handled quickly, bankruptcy is fine. That is how you clean the slate.”
In spite of the ignition switch recalls that were a blow to General Motors as it struggled to recover following the recession, Buffett praised GM’s controversial CEO Mary Barra. “She knows cars backwards and forwards. She’s really good.” One wonders why her knowledge of cars didn’t help her address the issue of the ignition switches, which had been ignored for nearly a decade.
Warren Buffett said he nearly bought the Ambassador Bridge in the 1970s, and Gilbert thought that would have been a good move for Detroit and for Buffett. Gilbert urged investors not to wait to buy in Detroit, “because it is going to get expensive the longer you wait.” He identified the top problems in the city as crime, education, jobs and blight, but if blight isn’t solved, “the other three discussions have serious ceilings on them.”