Making New York sink is hard, but as Modelcitizen pointed out, possible. Me, I'd prefer to get Detroit up off its feet with fewer problems, thank you. And what people have said about Detroit is entirely right - they screwed themselves, with the help of both overkill government regulatory efforts and the adversarial relationship with the UAW.
Fixing Detroit has a best POD in the late 1950s. I'm thinking that the Chevrolet Corvair is better-built and had the handling quirks ironed out, and scores B-I-G in the American car market, with at least three million made between 1959 and 1964. This convinces GM that better tech can work, and while they are beaten to the punch by Ford with the Mustang, when the Camaro comes out, it comes out with real overhead-cam V8s and fuel injection. The Corvair stays in production as GM's smaller sedan until 1981, through two redesigns. GM's tech binge causes them to be the vanguard of American car manufacturers, and even stuns the Europeans. Radial tires, disc brakes, independent suspension, fiberglass bodywork, aluminum engines and other innovations are wholesale taken up by GM, and Ford and Chrysler are effectively forced to follow.
AMC produces the Spirit, starting in 1970. Instead of the overweight, not-particularly-efficient Gremlin, the Spirit is a gem of a car, with a fuel-efficient engine, excellent handling, solid assembly quality and excellent amenities. Ford produces the Pinto similar to OTL, but owing to its antiquated design and serious flaws, it lasts just four years, and the Escort comes out for 1975. Chevrolet redesigns the Corvair in 1972 to match the Spirit, and switches to water cooling. When the energy crisis hits, AMC and GM have the right small cars, Ford and Chrysler don't, and it shows. Chrysler goes bankrupt in 1977, and is saved from the heap by Peugeot, which takes in a major share in it, wanting access to its dealer network. Ford gets hit hard as well, but counters fast. The energy crisis turns AMC from an also-ran into a major player, and their line up of cars in the 1970s is impressive.
In 1978, Lee Iacocca is hired to run Chrysler, with the approval of the French backers. Iacocca's turnaround of Chrysler is one of the biggest such actions in history, and despite Iacocca's personal eccentricites, Chrysler emerges from the 1980s back in full form. The Minivan, a Chrysler invention, proves to be the car for the 1980s, with rivals from GM (Chevrolet Lumina APV), Ford (Ford Transit) and AMC (AMC Walker). Peugeot's return to the US market is successful, and Iacocca is appointed to lead the entire company when PSA and Chrysler merge in 1986. Peugeot's tiny 205 hatchback becomes a major hit in North America in the 1980s for its incredible handling, and the Peugeot 405 and Chrysler Intrepid share the same chassis from their launch in 1987. Their successors, the Chrysler Intrepid and Peugeot 406, share chassis but are very different looking from 1993 onward. GM continues its technological prowess through the 1970s and into the 1980s, though some of these bite back, such as Cadillac's infamous V8-6-4 of 1982. But the majority of them work just fine, and when the technology and traditional big engines mix, the result can be awesome - the Corvette Grand Sport of 1984, with its 5.7-liter V8 engine producing an unbelievable 445 horsepower, being one such example. The Corvair is replaced by the Cavalier in 1982, with a 16-valve, 2.2-liter engine that makes 155 horsepower, again amazing for the time. The Cavalier is a blowout hit, moving 300,000 units in the first 12 months. GM ups its stake in Toyota to 33% in 1985, which leads to rumours of a buyout, but GM instead sells off its stake in February 1989, making a gargantuan profit on the deal owing to Japan's bubble economy. Ford starts the process of importing European models to run with its American models, and does alright. Not as advanced as GM is with regards to technology, they do fair in any case, and the Escort is a steady seller. Ford's "Fox body" cars of the 1980s are strong sellers. The Taurus, introduced in 1986 to replace the aging LTD, is one of the most popular sedans of the 1980s, and the LTD Crown Victoria goes into the bin in favor of the Falcon, nearly identical to its Australian counterpart, in 1991. Ford's tendency to make models for across the world pays off in the 1990s and 2000s. AMC's 1970s success gives them the resources to make other vehicles. Their highly-successful Jeep line and small car lines make up for the loss of the middle to Ford and technological lead to GM. With Detroit flying high, the imports struggle in the 1980s, to the point that several of them leave altogether. Japanese manufacturer Daihatsu never gets off the ground, and several others struggle. Toyota never gets as big a market share as it has IOTL.
The end of Coleman Young (following gridlocked's plan here) and the beginning of gentrification leads to Detroit beginning to regain much of its former status, but the 1980s are a turbulent decade.
Reagan's controversial firing of the nation's air traffic controllers in 1981 touches off a series of massive rolling strikes across the nation. Hamfisted responses to this by management see Roger Smith shown the door by GM's board. New management realizes the problems that a militant workforce can cause and spends much of the 1980s trying to fix that. AMC is fastest to follow, with Ford and Chrysler tailing along. The "Year of Discontent" of 1981-82 is a mix of major economic problems and civil unrest. Detroit is not immune to this - no Midwest city is - but big riots do not ever break out, and in several cities, including Detroit, black rioters frequently found themselves facing off against black citizens angry about the mayhem, which has a psychological impact as well. The problems with traffic from the outer suburbs lead to the beginnings of gentrification. (Again, gridlocked's plan works for this.) Reagan loses the 1984 election to the Democratic ticket of Ted Kennedy and Henry M. Jackson, the latter used to steal a lot of strong arm voters from Reagan. The 1980s see new manufacturing grow up in the United States, focused on quality and innovation, and in many cases with smaller businesses. Detroit is not left out of this. America's social and economic development in the 1980s and 1990s is very marked.
The 1981-82 riots had one unanticipated side-effect - as in New York following the blackout of 1977, many stolen pieces of electronic equipment are part of the base of a major music scene. Motown Records returns parts of its operations to Detroit starting in 1984, and as the city's music scene comes back, so does its number of labels. House music, which was born in Chicago, explodes across the Midwest in the 1980s and has a strong sub-culture, the Detroit Sound, born in the Motor City. This is followed by many musical acts out of Detroit in the 1980s and 1990s, from soul group Boys II Men to rapper Eminem. The diversity of the entertainment acts gives new life to Detroit's music community, which when combined with fixing windows theory-based law enforcement work, demolition of abandoned properties and the growing creative class, leads to people returning.
The vibrant arts communities, reduced crime, shorter commutes and economic prosperity sees the long flow of people to suburban regions completely reverse in the 1990s. Tens of thousands of old houses are rebuilt, abandoned warehouses are turned into condos, clubs, shops and smaller industries. Several large apartment buildings are built in the mid to late 1990s to house poorer residents, and middle-class residents are able to stay in the city center. Many of Detroit's landmarks are rebuilt, with such places as the Fox Theatre and Michigan Central Station massively rebuilt. The architecture of the city becomes a high point, with storefronts of the 1850s mixing with 1990s towers. Detroit's city population grows massively in the 1990s, from just over 1.1 million in 1990 to nearly 1.6 million in 2000. This has a few negatives, particularly with regards to cost of living, but the city's growth is put forth as an example of America fixing its problems and building a 21st Century city.
The 2000s are taken up by improving the infrastructure of the area. From the waterfront to the city's growing system of above-ground transit (and light-rail surface transit, starting in 2004) and buses, the city's transit system improves markedly in the 2000s, further helping the growth of the city's inner areas, including several areas which become loaded down with middle-class residents, many of them working for the automakers. Detroit blows past its 1950 peak population in 2005, and the 2010 census records a population in Detroit 2,107,455, 250,000 people above the 1950 peak. The average income in Detroit is still considerably below New York, San Francisco or Boston, but higher than Chicago (or indeed, any other major Midwestern city) and higher than most. The city's entire urban area has a population of 6.4 million, the fifth largest in the United States (behind New York, Los Angeles, Chicago and Houston) and seventh-largest in the North American (those five, plus Mexico City and Toronto).
Detroit in 2003 joins with the Canadians in building a major high-speed rail line along the St. Lawrence River Valley, with Detroit responsible for a new bridge over the Detroit River for the trains and the section of the line from the bridge to Chicago. The Alliance Bridge is completed in 2007, and the first high-speed train between Chicago, Detroit, Toronto and Montreal runs on July 1, 2008. The system proves to be a cash cow for the city in many ways, from tourist draws to hockey and football fans going to see games in another city. By 2011, Detroit fans traveling to NHL games in Chicago, Toronto, Montreal and Quebec City is a common occurence, as is Bears-Lions games being flooded by fans from the other city. The St. Lawrence River Valley HSR would become seen as a critical tool for cities, and eggs on the expansion of Amtrak's Northeast Corridor and the building of similar systems in Texas, Florida and California.