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A new kind of auto industry is emerging from the one that put America on wheels

Mar 31, 2017

Forget the “Lost Decade.”

Profitable automakers racing for the new-new thing of mobility are starting to create the "Next Decade." On one track are the likes of General Motors and Ford Motor, each booking record profits on the strength of trucks and SUVs. On the other track is a whole new world with the power to change the perception – and reality – of Michigan as we know it.

Credit Daniel Howes / Detroit News

Nowhere is that transformation more symbolic than in Flat Rock. The Blue Oval is investing nearly $1 billion there to build a second Michigan data center and to produce electrified and autonomous vehicles.

You want to see the future in autos? This is it.

Now, they’re still building cars and trucks there – think Mustangs and Lincoln Continental. Along with a full line-up, they account for the company’s revenue and profit … for now.

But they’re also building two data centers – for a car company – because Ford expects its data usage to soar 1,000 percent by the early part of the next decade. That’s 1,000 percent.

Old Detroit it’s not.

The coming transformation contemplates technology this business couldn’t fathom just a few years ago. It’s attracting young techy college grads who wouldn’t have been wooed by the metal bending of it all. It’s angling to change the investment cases for automakers still hungering for capital and respect on Wall Street and to create jobs.

New auto-related jobs in Michigan swelled by 200,000 since the end of the global financial meltdown. That’s more than any other state in the nation.

The Center for Automotive Research says automakers and major suppliers have invested more than $30 billion in the state between 2009 and last year. More than 75% of all North American automotive research is conducted here. And Michigan boasts more autonomous-vehicle test sites than any other state.

The state economic development arm says Michigan is home to 27 assembly plants. It claims 63 of the top 100 North American suppliers. It’s the largest producer of cars and trucks in the United States, boasting 19 percent of total U.S. production.

The bottom line: the smaller footprint of the Detroit-based industry is more geographically concentrated in Michigan than it was before the meltdown. But it’s not just manufacturing anymore.

It’s high-tech. It’s greener and cleaner. And that so much of it is happening here is huge. It’s a testament to the industry’s human capital and the current political environment’s bias for investing at home. This in the state synonymous with the “Lost Decade” of job losses, plant closures, economic decline and epic bankruptcy.

This in the home of Detroit automakers that many investors still do not believe in. Memories of capital incinerated and promises broken, of deep cutbacks, asset sales, even bankruptcy, are still too fresh for too many on Wall Street.

The stakes are enormous. The Detroit auto industry is finally profitable at home, but it’s still beset by perceptions it’s less competitive, less nimble and less innovative than rivals. Executing the high-tech vision for its future is the best way to change that – and Michigan in the process.

Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.