Are We Stuck in Detroit?

As we learned earlier in class, producers in similar fields tend to gather in the same geographic locations.  This can be due to availability of resources, trained workers, customers, and even the possibility of sharing ideas and innovations with others.  Additionally, industries tend to build up in certain areas because of spin offs setting up close to their parent companies.  Many of these factors have played into Detroit becoming American’s auto producing capital.

In the past, Detroit thrived as a hub of production in the country, with plenty hiring potential.  This is no longer the case.  In his piece, “Demand for Detroit housing leads to expanded cash incentive program”, JC Reindi discusses programs in Detroit called Live Midtown and Live Dowtown which attempt to make incentives for certain professionals to live in Detroit.  Currently, the programs subsidize workers for the Henry Ford Health System, Wayne State University, and Detroit Medical Center, offering $20,000 towards the purchase of a home in Detroit.

Although these incentives don’t apply directly to those involved in the auto industry, it seems to be a sign that people are less willing to live and work in the struggling city of Detroit.  When this is paired with the fact that foreign car companies have been setting up shop outside of Detroit, seeming to favor the south, the question arises of whether or not Detroit is the best place for the American auto industry to be centered.  It would be interesting to see if manufacturers would choose to stay in Detroit, or if they just feel anchored by their existing plants and connections.

I think that when we are in Detroit it will be interesting to see if Detroit still seems like the best place to be making cars, or if producers just feel stuck there, forced to introduce new systems for attracting capable employees.

2 comments to Are We Stuck in Detroit?

  • Bill Cosgrove

    When journalists and commentators talk about Detroit, they are sometimes talking about issues facing the Detroit automakers, sometimes about Southeast Michigan (which includes the city of Detroit but also vibrant suburbs like Ann Arbor, Troy and Birmingham) and of course they are sometimes talking about the City of Detroit. Although there are issues that are common with all three “Detroits”, there are many others that are unique like the housing incentive you highlight. It’s important not to confuse the three Detroits.

    Many offshore OEM’s build their new assembly plants in the South (primarily because of right to work laws, anti-UAW sentiment and big state incentives). Almost all however locate significant research and development activities in Southeast Michigan.

  • Jier Qiu

    I remember the academic paper we read in the beginning of the class mentioned something about agglomeration of auto companies. That contributed to the companies gathering in Michigan. However, as Mr. Cosgrove states new companies are all moving to southern states such as Texas. I don’t think Michigan by itself has any effect on auto industry. It is more due to major companies started there in the beginning. And now there are OEMs and part supplier factories near the border of Canada, making Michigan too expensive for the companies there to leave.