DETROIT: The city of Detroit is working with two communications shops, Duffey Petrosky and Abernathy MacGregor, to convey that it is open for business and servicing its residents after becoming the largest city ever to file for Chapter 9 bankruptcy protection last Thursday.
Detroit has capped the potential spending on the two PR firms' contracts at $115,000 combined, according to city records.
Detroit Emergency Manager Kevyn Orr first brought on the firm Duffey Petrosky in March to communicate the steps the city was taking to restructure its debt. As part of its contract, William Nowling, Duffey Petrosky director of public affairs and issue management, is working as an in-house spokesman for Orr.
Last Thursday, Detroit filed for bankruptcy, citing more than $18 billion in debt and liabilities, including $5.7 billion in unfunded retiree health insurance and $3.5 billion in unfunded pension payouts for 20,000 retirees and 10,000 current city workers.
Once the city announced its bankruptcy plans, the firm's scope of work changed to getting the word out about why such steps were taken, Nowling said. The first message is to convey that unlike filing for Chapter 11, Chapter 9 allows businesses to continue as usual while debt matters are settled.
“It provides us breathing room while we fulfill our obligations to investors,” Nowling said. “It also allows us to take some of the resources we were investing in debts and reinvest in the city.”
For instance, Detroit is moving forward with plans to purchase a fleet of new police cars. Many cars in use have as many as 200,000 miles on them.
Another major talking point is the progress the city is making with debtors. For instance, Detroit recently said it reduced the amount it owed to Bank of America by more than $80 million.
Public officials have taken an aggressive media outreach approach to get across the city's viewpoint. For instance, on Sunday, Michigan Gov. Rick Snyder, Mayor Dave Bing, and Orr made the rounds on political talk shows such as CBS' Face the Nation, NBC's Meet the Press, and ABC's This Week.
At Nowling's suggestion, Orr's office also brought on Abernathy MacGregor to conduct outreach to stakeholders in the financial services industry.
Chuck Dohrenwend, an MD at the firm, said little about his agency's work other than it is helping “to show how [Detroit] can best communicate the steps it's taking to get a financially firm future.”
Even with the agency help, Nowling acknowledged it will take some time to fully restore the city's reputation following any image fallout the bankruptcy filing has caused.
“It's certainly going to have an impact, but we're going to have to message through that and convey we're open for business,” he said.
The private sector in Detroit has been supportive of the bankruptcy decision. Its regional Chamber of Commerce has shared with the press that it believes the move was necessary to solve the long-term structural financial challenges and will lead to future growth.
“The best way to address a PR problem is to address the problem,” said Jim Martinez, director of communications at the Detroit Regional Chamber. He added that city and state leaders “are working hard at" doing that.