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Recovering Auto Industry to Help Reduce Jobless Rate in Michigan

It’s a well-known fact that the auto industry has always had a huge impact on Michigan’s economy, as it employs hundreds of thousands of people in the state, where all three big U.S. car makers have their headquarters, so it’s only natural that when the industry was hit by recession, the state’s economy suffered, as well.


Image credit: mediad.publicbroadcasting.net.

Vehicle production dropped considerably, many automotive suppliers had to close up shop, and a lot of workers were laid off by car makers. This also means that when the auto industry is in a good shape, Michigan’s economy is thriving, which has already started to happen, thanks to the growth the industry has seen in recent years.

Over the past couple of years, the U.S. auto industry has started showing signs that it’s on its way to recover from the crisis, and 2013 was an especially good year. In fact, it was the best year since 2007, as all three major car makers reported a huge increase in yearly sales.

This growth has already had a positive impact on the state’s jobless rate, which has been among the highest in the country for a while now. According to the Bureau of Labor Statistics, Michigan’s unemployment rate was 9.3%, as of December, 2016, which is one percentage point higher than the national rate.

Ford, GM and Chrysler reported impressive sales figures for 2016, selling about 7.4 million vehicles in the U.S. in


Image credit: http://www.americanprogress.org.

total, which is a 13 percent increase over 2014. General Motors topped the list, with 2.8 million units sold, followed by Ford, with 2.5 million, and Chrysler, with 1.8 million.

These numbers indicate that the auto industry is doing pretty well at the moment, and even though sales are expected to slow over the next 12 months, car makers should keep on bringing people back to work in the following years. According to some estimates, the industry could add about 200,000 jobs to the existing 550,000 by 2015, and obviously, the vast majority of those jobs will be in Michigan.

Ca sales are projected to grow 2.6% this year, according to a University of Michigan forecast. Sales for 2015 should reach 16.3 million vehicles (cars and trucks), with a 1.9% growth rate.

Michigan auto workers AP

Image credit: http://www.wbez.org/

Not all of these jobs will be manufacturing jobs, as car connectivity grows, and cars get smarter, being equipped with the most sophisticated infotainment and safety systems, which means that more engineers and software developers will be needed, in addition to factory workers.

Also, automotive suppliers will surely start hiring much more than in previous years, and considering that dozens of suppliers are based in Michigan, it will put a significant dent in unemployment rate.

However, although Michigan will undoubtedly benefit from the auto industry growth, experts warn that it shouldn’t continue to rely solely on the automotive sector to ensure economic growth, and should focus on the knowledge-based service sector and increase investment in higher education.

Jordan Perch

Jordan Perch

Jordan Perch is an automotive fanatic and “safe driving” specialist. His expertise includes subjects like traffic regulations and green car technologies. He is a writer for DMV.com, which is a collaborative community designed to help ease the stress and annoyance of “dealing with the DMV”.

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