Detroit bankruptcy could hit millions of retirees
Future public sector workers can all but count on lower retirement benefits, as many state and local governments scale back the kind of financial promises that sank Detroit. With retirees living longer, those promises have become too costly to make.
(Read more: The new geography of American prosperity)
"I think there is going to need to be an understanding with public employees that working for 30 years and being able to have a pension for that much time or longer is not sustainable," said Rueben.
Automakers said they plan to standby the city.
"We believe a strong Detroit is critical for a strong Michigan and our industry. The city has a difficult job ahead, and we are optimistic that governmental leaders will be successful in strengthening the community," said Jay Cooney, a Ford spokesman.
Chrysler said it "believes in the City of Detroit and its people. We not only continue to invest in the city and its residents by adding to our presence in Detroit, we also are committed to playing a positive role in its revitalization."
The crisis is also being watched closely in the White House.
"The president and members of the president's senior team continue to closely monitor the situation in Detroit," said Amy Brundage, a White House spokeswoman. "While leaders on the ground in Michigan and the city's creditors understand that they must find a solution to Detroit's serious financial challenge, we remain committed to continuing our strong partnership with Detroit as it works to recover and revitalize and maintain its status as one of America's great cities."
—By CNBC's John W. Schoen. Follow him on Twitter @johnwschoen.