Three years ago, I saw a silly article published by the Mackinac Center, under this headline: “Michigan Economy No Longer Dependent on the Auto Industry.”
The author based that ridiculous statement on the fact that more people now work in retail trade and in hospitals than in the auto industry. I wonder what he thought brought all the retail here in the first place, or created the need for all the hospitals.
Actually, what the article said about jobs wasn’t even correct. Yes, more people in Michigan do work in retail than work for one of the major auto manufacturers.
But when you count all the auto related jobs in Michigan, the total is 944,000, according to the 2017 Annual Automotive Industry report. That’s one out of every five jobs in the state.
According to MICHauto, a branch of the Detroit Regional Chamber of Commerce, the state has received $17.5 billion dollars in automotive investment in the last five years.
The industry’s total economic impact on the state is nearly $57 billion a year. And if you thought this was a business in permanent decline, the auto industry has added more than 38,000 jobs since the Great Recession started to end nine years ago.
Not too shabby, eh? Not exactly a minor part of our economy. Now, that doesn’t mean we can afford to get complacent. We’ve made that mistake before. The industry is constantly changing, and workers at every level are going to have to be riding the surf with it.
The fact that Ford, GM and Chrysler let quality controls slip in the 1970s and 80s is a good part of the reason we are in the mess that we are in. In any event, The Detroit Three will never again be mass employers of hundreds of thousands of unskilled workers at high wages.
General Motors will never again sell more than half of all the cars sold in this nation, as it did in the early 1960s. But neither do these companies seem likely to go out of business, and that was a real possibility, especially for Chrysler and GM a decade ago.
The auto industry does need to become much more aware of the need to change. They are doing much better. Years ago, George Romney told me that sometimes Walter Reuther would come to his house on a Saturday afternoon, back when Romney was head of American Motors.
Romney’s wife would make them sandwiches, and they’d talk. Romney told me that both men agreed that the economic model of charging ever more for cars and passing the cost off to the consumer was unsustainable. Neither man felt, however, that he could sell it to his constituency, and so nothing much changed – until oil shocks and the rise of the Japanese.
I don’t know exactly where the auto industry is going long-term and except perhaps for a few visionaries, I don’t think anyone else does either. My theory is that the future will see us use a complex array of transportation options. I don’t think the private car will vanish.
I think cars powered by gasoline and internal combustion engines may be around for longer than some believe. But I know that Michigan was bound to have its future wedded to the assembly line almost from the moment that old Henry Ford started using one.
And on the whole, it’s made us richer, and made us what we are. Now, we can stay tuned for and try to influence the next chapter.
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