By Jim Davis
The Wolverine State remains on the move.
Henry Ford didn’t invent the assembly line. He wasn’t even the first to
manufacture automobiles using an assembly line. Like many successful
entrepreneurs, he adapted and improved upon the initial concept.
Ford produced his company’s Model Ts on a rolling assembly line in 1913
at his Highland Park Ford Plant in Michigan, 10 years after Oldsmobile
pioneered the assembly line in auto manufacturing.
Ford’s innovation was using a conveyor belt to move the chassis from station
to station. Within a year, Ford reduced assembly time from 12 1/2 hours to
93 minutes. In just over a decade, 10 million Model Ts rolled out the door at
Although not nearly what it was in its heyday, the automotive industry
remains a vital part of the Wolverine State’s economy today. Michigan ranks
as the top state in the U.S. for auto manufacturing with 975 manufacturing
plants. In 2014, the auto industry supported 532,000 jobs in Michigan.
The second closest was Ohio, with 305,000 jobs.
About $10 billion a year is spent on research and development for the auto
industry in the state, including funding for the American Center for Mobility
— a global center for testing self-driving cars.
As the auto industry’s fortunes improved after the recession, so did
Michigan’s fortunes. The state has seen nine years of uninterrupted job growth
from 2009 through last year.
Michigan’s economy goes beyond the auto industry, however. The state is
home to more than 500 medical-device manufacturers. Health care is an important part of the state’s economy, generating $65 billion in total economic
impact per year. About 930,000 jobs in the state are directly or indirectly
connected to the health care industry.
More than 600 aerospace companies are based in the state, enjoying
Michigan’s long history of manufacturing expertise as well as tapping into
highly rated engineering universities. Michigan was ranked eighth in the
nation last year for aerospace-manufacturing attractiveness. The state also
is a leading force in research for carbon fiber and other lightweight materials.
Michigan faces challenges like any state. Michigan’s per capita personal
income was $46,201 in 2017. That ranked 31st in the U. S. and was just 80 percent
of the national average of $51,640. That could be exacerbated if the trade war
continues with China.
The state’s automakers cut their profit forecasts as a result of the trade tensions.
Ford has said that steel and aluminum tariffs enacted by the Trump administration could cost the company $1 billion.
Michigan has an estimated population of nearly 10 million. About 14.2 percent
of the population lives in poverty. n
What the locals say
“There’s an old saying around here, ‘If the U.S. economy sneezes,
Michigan gets pneumonia.’ I think that’s less true than it used to
be, because any time you’re heavily dependent on durable-goods
manufacturing, that’s more cyclical than the rest. People can’t put
off buying groceries, but they can put off buying a car. The auto
footprint is smaller than it once was. I think we are less cyclical than
maybe we were, but I say maybe because the Great Recession was
horrendous for Michigan.”
Economist, Michigan State University
Home sales and prices
Residential properties sold in Michigan generally have been climbing
in the past few years, but there are some signs of softening. The total
number of properties sold in 2017 was 133,764, nearly 3,000 sales shy
of the 2016 mark, according to Michigan Realtors statistics. The figure
declined to 125,534 in 2018, a 6 percent year-over-year drop.
Home prices, however, appear to be on an upward trajectory. The average residential-property sales price reached $185,170 in 2018. That’s far
higher than 2012, when the average sales price was $110,998. It’s also
higher than pre-recession levels. In 2007, residential properties were
being sold in the state for an average price of $142,438, according to
Concerns exist over available housing inventory in the state. The Home
Builders Association of Michigan estimates that 25,000 homes per year
should be built in the state to keep up with population growth and to
replace aging housing. The state has seen construction slow in recent
years and estimates that only 17,000 homes were built in 2018.
Michigan Residential Sales
Source: Michigan Realtors
Unit sales Median sales price