For now, it has been a smooth road for Michigan’s auto industry –

Posted: Sunday, August 16, 2015

August is the month for vacationing and preparing for the start of school. But the auto business isn’t taking a break.

Saturday’s Woodward Dream Cruise and Flint’s Back to the Bricks brought out more than 10 percent of Michigan’s population to celebrate the state’s auto heritage.

In Ann Arbor, the industry’s future is being written at Mcity — a newly built faux town on the University of Michigan’s north campus where researchers are working to meld self-driving cars into daily life.

And the industry’s present is looking pretty spiffy, as well. Sales are booming and Detroit’s automakers are enjoying an era of prosperity not seen since at least the late 1990s.

Some analysts say sales this year could top the all-time record of 17.4 million cars and light trucks set in 2000.

But the environment is far different from 15 years ago when the Detroit Three’s profits collapsed with sales of big SUVs, nearly wiping out the domestic auto industry.

They hung on throughout the “lost decade” of the 2000s mostly on profits earned outside their home turf.

Today, the North American market is a huge moneymaker for them.

The restructured automakers no longer are drowning in debt. They claim they can remain profitable even if sales take a big dip, which is likely at some point in this highly cyclical industry.

During his 2008 campaign for president, Sen. John McCain famously proclaimed that many auto and other manufacturing jobs being lost in the Great Recession were never coming back.

While that remains true, the auto and parts manufacturing industry added 170,000 U.S. jobs between 2009 and 2014, according to Bureau of Labor Statistics data provided by University of Michigan economist Don Grimes. About 46,600 of those new jobs are in Michigan.

Many auto jobs don’t pay as well as they did decades ago when they afforded a cottage Up North and a college education for autoworkers’ offspring.

New workers in the Detroit Three’s factories start out at about half the $28 an hour veteran workers make.

Still, the average wage at an auto assembly plant in Michigan was $93,824 last year. Workers in supplier plants made an average $69,780, according to Grimes.
And high-paid technical jobs are in demand as the industry works to meet new federal fuel economy regulations and develop cutting-edge technologies, such as self-driving cars and alternative fuel vehicles.

Michigan’s auto industry faces various threats, including competition from California’s Silicon Valley. Detroit’s automakers have growing operations there to tap into the region’s computer software expertise.

Fiat Chrysler CEO Sergio Marchionne, who has been pushing for industry consolidation, has said it’s possible that Apple, Google or another Silicon Valley company could merge with an automaker.

But for now, the industry is enjoying a mostly smooth ride.


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