Michigan Then and Now: A Tale of Industrial Recovery

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). I clearly remember the old joke when I was a boy of a mere 12 years: Last one out of Michigan, turn out the lights. Those words were almost ringing in my ears, as my family packed up the old station wagon and made the trek down to Houston, Texas.

The time was 1981 and Michigan's economy was hurting. OK, hurting does not really do the situation justice. Michigan's economy was in tatters. Industries were closing their manufacturing plants' doors left and right, with the automobile industry leading the pack.

Traditionally a staple of the Michigan economy, the automobile industry was experiencing some very rough times in the early 80's. Plants were being shut down in Flint, like it was going out of style. Thousands lost their jobs. Thousands packed up and moved to, hopefully, greener pastures. And the jokes kept on coming.

The unemployment rates in Michigan rose to 12.4% in 1980 and a high of 15.5% in 1982. Industry was suffering, and as a result, the people suffered along with it.

Click on the image at right to view the Michigan Unemployment History Chart.

Like an old punch-drunk fighter in his last round, Michigan was staggering around the ring, barely managing to keep itself on its feet, just moments away from hitting the canvas for that final ten count. However, the end didn't come.

Michigan industry managed to pull itself up by its bootstraps, maybe not returning to its glory days, but certainly breaking out of the unemployment slump. Through industrial diversification, unemployment in Michigan went down to 8.8% by 1986 and it kept dropping for the next 15 years, before taking a slight upswing in 2001-2003.

Things began to look brighter for the state in the late 1980's, when foreign automakers began to increase their presence in the U.S. As the foreign automakers began to ramp up their efforts to take a larger market share from the U.S. automakers, this directly affected the Michigan economy, with its heavy reliance on the auto industry.

The mild recession of the early 1990's also hurt the state and its industry. However, in this case, the recovery was much faster than that experienced in the early 1980's. In addition, foreign automakers were making progress in their attempts for a larger market share. All through the 1990's, U.S. automakers, all relied heavily on by the state of Michigan, were steadily losing the market share battle. More and more tier suppliers were moving south to states like Kentucky, Tennessee, Mississippi, Alabama, and Texas, to support the foreign automakers and their new assembly facilities.

As the state moved into the new century, the industrial base was recovering. The state's industry continued to diversify and the automakers were beginning to make a comeback, with some significant capital plans in store for the state in the early 2000's, with much more planned for the future.

In 2003, Michigan's unemployment rate was 7.3%, not the best in the nation by any means, but a far cry from the low teens the state experienced in the early 80's. Currently, Industrialinfo.com is tracking 177 capital and maintenance projects in Michigan, with an anticipated construction kick-off in July 2004 or later, and representing projects worth in excess of $10.4 billion.

Click on the image to the right to view the Michigan Active Projects Pie Chart showing TIV by project timing.

Of those planned projects, the majority of them fall under the power (64 projects worth over $6.7 billion) or industrial manufacturing (75 projects worth over $2.1 billion) industries, although the pharmaceutical/biotechnology industry also has over $1 billion worth of projects in the works. Within the industrial manufacturing industry, the automotive industry accounts for 37 projects worth over $1.6 billion.

Click on the image at right to view the Michigan Active Projects Pie Chart showing TIV by industry.

All in all, one could say that Michigan has made a very healthy recovery from the low point of the early 80's. Once again, employment appears to be stabilizing, industries within the state are spending both capital and maintenance money. Industry in general, and especially the automotive industry, is getting back on kilter. The state's industrial future looks bright, provided that the automotive industry, and all of the smaller industries that support it, can continue to grow and evolve. Only time will tell if this future will boom or bust.

For more information on the plants within the state of Michigan and the rest of our Great Lakes Region, check out our Great Lakes Online Plant Directory and for a more detailed analysis of the automotive industry, not only in Michigan but throughout the United States, check out the Automotive Database.