For Sale: Auto Supply Company Owned by Detorit Mayor

You know things are bad when even the mayor's company is hurting. This is the case in Detroit, Michigan, where Mayor Dave Bing is considering selling his ailing automotive supply company. The company, called The Bing Group, makes stamped parts for automakers. Since the beginning of the recession, the company has continued to founder. Recently, The Bing Group informed GM that it could not supply any more parts. Although Bing is still mulling the decision over, the auto supply company is likely to be sold.

When Bing was elected Detroit's mayor in may, he gave control of The Bing Group to a manager who set up a blind trust to allow Bing to retain his ownership of the company. However, the blind trust only removed him from the day-to-day dealings of the company; he is still the registered agent for The Bing Group. Because Bing is the registered agent, the state of Michigan would go to him first if they wanted information on the company.

How the failure of Bing's auto supply company will flesh out politically remains to be seen. When the former NBA superstar campaigned for mayor, he boasted of the success of The Bing Group and attributed this success to his savvy financial management skills. The failure of a company he once used as evidence of his competency is now an embarrassment and a frightening reminder of the severity of Detroit's economic woes.

On the other hand, some see Bing's business tribulations as humanizing. After all, he's going through a very similar experience to most of Detroit's citizens. The fact that a prominent political figure is not immune to economic vagaries may foster a feeling of universality and camaraderie. To his credit, Bing also refused to accept a salary when he took office. Instead, he donated what would have been his $176,000 annual salary to the Detroit Police Department. Some see the mayor's generosity as evidence that The Bing Group is still profitable enough to pay the bills, though.

Bing has said that he will make a final decision about selling the automotive supply company early in 2010. GM informed the Bing Group that its automotive suppliers must continue sending auto parts even if GM doesn't pay them, per a condition of GM's bankruptcy. This plan, however, failed to account for the fact that the supplier itself is on the verge of bankruptcy without GM's money. In the meantime, GM is trying to pay its auto suppliers on a weekly basis, a move that should help automotive supply companies like The Bing Group.