Posted September 17, 2009

Citing steep cash losses, buildings will be sold, employees laid off

DETROIT (CNS) – A major financial restructuring plan for the Archdiocese of Detroit, which is losing approximately $42,000 per day, calls for a 29 percent decrease in the number of employees, the sale of buildings, moving administrative support offices to a more cost-efficient property in the city, and the elimination of the subsidy for The Michigan Catholic, the archdiocesan newspaper.

The six-county archdiocese will be reorganized into four regions for the delivery of programs, services and ministries to its 1.4 million Catholics under the restructuring plan announced Sept. 3 by Archbishop Allen H. Vigneron.

The archbishop, who was installed Jan. 28, said he had accepted the restructuring recommendations from two separate committees, comprised of laypeople and clergy, following a six-month study on the financial viability of the archdiocese.

“The financial realities of our current circumstances are sobering; the resulting changes for the administrative structure of the archdiocese are significant,” he said.

In addition to a decrease from 264 to 187 employees, other changes include the elimination of the subsidy for programming at the Retreat Center at St. John’s, the sale of the Print Shop building and the outsourcing of studio productions for the Catholic Television Network of Detroit. The Gabriel Richard building, down the street from the chancery and the workplace for 112 archdiocesan employees and the Catholic Youth Organization, also will be sold.

After receiving the recommendations, the archbishop conferred with the archdiocesan finance council and the college of consultors, the priest council of advisers on administrative and financial issues. Then, after prayer and reflection, Archbishop Vigneron accepted the recommendations.

Currently, the archdiocese loses approximately $1.2 million each month. In the fiscal year 2008-09, the archdiocese lost $14.5 million. The recommendations were designed to keep the archdiocese “cash-neutral,” and without the changes, the archdiocese faced exhausting its cash supply by 2011.

The Detroit area has been one of the hardest hit by the faltering economy with the world headquarters of each of the Big Three automakers – Ford, Chrysler and General Motors Corp. – all within the archdiocese. The bulk of the work force within the archdiocese has ties to the auto industry.

Ned McGrath, director of communications for the archdiocese, cited a confluence of circumstances that brought the cash crunch to a head. “Our investment portfolio took major hits in 2001 and 2008,” he said.

Beyond coping with increased expenditures for operations and benefits, McGrath said, the archdiocese also had to deal with rising costs for a number of major construction projects started in the last decade.