The US automotive industry, is in serious fiscal trouble. The city may soon be taken under Michigan state's control and could potentially even face bankruptcy.

Michigan Governor Rick Snyder declares last Friday the state's largest city is facing a fiscal emergency.

The Motor city is laden with $14 billion in debt, and a current fiscal year budget deficit of $100 million.

The declaration paves the way for the state to take over the running of the city.

"There is an emergency here. The citizens deserve better services in Detroit. Let's work together as Michigan to solve these problems. For Michigan to be a great state, we need Detroit on the path to being a great city again."

Detroit was once the fifth largest US city, but in the past decades, the decline of the auto industry and the bursting of the housing bubble led to the sharpest population drop of any major US city.

"The underlying reason in my view as to how we got into this situation is the dramatic loss of population in Detroit since 1950. The city had 1.8 million people, today it has 700,000 people and government has not adjusted properly."

But the state takeover is not a done deal. Detroit officials now need to hold a hearing with the Michigan governor on March 12. The governor is expected to have final say on who will be the emergency manager to try fix the city's operations. If Detroit can't get its financial house in order, it could become the largest US city to file for bankruptcy protection.