IT IS fashionable to say that the city of Detroit is on the up. Amid the derelict buildings there are signs of revival. But for a truer augury of the city’s possible future, consider the rock-bottom stockmarket valuations of Ford and General Motors, Motor City’s two big domestic car firms. If you put the members of the S&P 500 index in order of their price-earnings ratios, Ford and GM are at the bottom, among the walking dead.

For their investors, creditors and 426,000 staff, about 18% of whom are in Detroit, it is a terrifying signal. A low price-earnings ratio is the stockmarket’s way of telling you that business as you know it is over. GM and Ford together made $18bn of underlying profit last year but have a market value of $98bn.

Read more: Detroit’s car firms try to match Silicon Valley

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Published by Mike Rawson

Mike Rawson has recently re-awoken a long-standing interest in robots and our automated future. He lives in London with a single android - a temperamental vacuum cleaner - but is looking forward to getting more cyborgs soon.

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Detroit’s car firms try to match Silicon Valley

by Mike Rawson time to read: 1 min
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