Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) said Detroit is underutilized and has a huge potential for growth during an event initiated by Goldman Sachs Group Inc (NYSE:GS) intended to provide $15 million worth of loans to small businesses in the city.
The Goldman Sachs Foundation provided the funding for the 10,000 Small Businesses program in Detroit. The primary objective of the program is to help entrepreneurs create jobs and economic opportunity by providing greater access to education, business support, and capital.
Buffett attended the launching of the program together with Lloy Blankfein, CEO of Goldman Sachs Group Inc (NYSE:GS), Senator Debbie Stabenow, Governor Rick Snyder, Detroit Mayor Dave Bing among others.
During a news conference, Buffett said, “The resources are here to have a great, great city.” In addition, he compared Detroit to the underutilized auto industry several years ago, and said the city has huge potential for growth.
Buffett serves as an adviser to the Goldman Sachs group
The billionaire investor believed there are many investment opportunities in Detroit, and expressed his willingness to invest in Detroit once he finds companies worth buying. He also encouraged people to provide information to Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) regarding companies for potential investment. Buffett serves as an adviser to the Goldman Sachs Group Inc (NYSE:GS)’s program for small businesses.
Buffett estimated that hundreds of small business owners in metro Detroit will benefit from the program over time. There were 20 local businesses chosen as initial participants to the program.
Mayor Bing emphasized that the program of Goldman Sachs Group Inc (NYSE:GS) will provide significant financial and technical assistance to small business owners, which are critical to Detroit’s turnaround.
Detroit declared bankruptcy due to losses in tax revenue
The Mayor added, Detroit is “quickly becoming the home base for a number of innovative and cutting-edge companies that are bringing jobs and people back.”
In July, Detroit declared bankruptcy due to losses in tax revenue. The population of the city declined from its peak at 1.8 million during the 1950s to 701,000. The Bureau of Labor Statistic reported that the unemployment rate in metro Detroit in October was 9.5%.