Michigan: The Heart of the American Auto Industry

Michigan plays a crucial role in the American auto industry, contributing $304 billion annually to the state’s economy and accounting for 21% of all U.S. auto production in 2022. The concentration of 98 out of the top 100 auto suppliers in Michigan illustrates the state's significance. This phenomenon, known as industrial clustering, arises from the need for an interconnected supply chain, specialist workforces, and innovation networks. The historical context shows that Michigan’s industrial development began in the late 19th century with industries such as lumber, facilitated by railroads. Detroit emerged as a pivotal site for the auto industry, attracting early figures like Ari Olds of Oldsmobile due to its ample resources, including water power and proximity to heavy industry and rail connections. Over time, major automotive companies like Ford, Dodge, and General Motors established their bases in Michigan, leading to the formation of a North American auto production system that extends throughout the Midwest and into Canada and Mexico.