With musicians of Detroit’s symphony having been on strike for nearly five months, there may soon be another empty building and more joblessness in Michigan. According to the Detroit News, the banks are putting pressure on both the DSO and the striking musicians to reach a deal or it may all be over with…quickly.
The Detroit Symphony Orchestra has a bigger problem than the 18-week-old strike that has marred the classical music season, alienated donors and disappointed subscribers.
The orchestra’s lenders, in an ominous turn, repaid the orchestra’s bondholders on Dec. 1 and called a $54 million loan the symphony cannot pay. The move essentially sets up a high-stakes game of chicken between the orchestra’s directors, the musicians and the lenders, who aren’t likely to renegotiate the loans without a realistic labor agreement and an aggressive turnaround plan.
“This thing is at a tipping point and if we don’t get it back quick, it’s gone,” a ranking banker close to the situation said Wednesday. “It’s a sad situation. But somebody miscalculated badly. The labor situation is part of an overall restructuring that the banks want to see put in place.”
The transaction, completed by a five-bank consortium that includes JPMorgan Chase, Comerica and Bank of America, exchanges bonds set to mature in 2030 for debt controlled directly by the banks. The change moves the DSO one large step closer to a bankruptcy filing with existential implications for the organization, the musicians, the management and the future of world-class music in Metro Detroit.
Read the rest @ The Detroit News.
In Detroit, there seems to be little left that the hands of unions have not touched.
