Where Michigan positions itself as an automotive hub in the age of electrification

When we talk about U.S. auto manufacturing, one state inevitably comes to mind: Michigan.

But as the industry races toward an electric future, Michigan faces competition from the Southeast’s burgeoning “battery belt.” Electric vehicle and battery makers have flocked to the region in recent years, drawn in part by a non-union workforce and proximity to their supply base in Mexico.

“The South actually stepped in and planted a flag. Part of this change was about unionization, but these plants are starting to be unionized as well,” said Bill Rayl, executive director of workforce solutions for the Michigan Manufacturing Association.

Despite this change, experts see Michigan as a key player in the evolving automotive landscape. Rayl likened Michigan to the “buckle” of the battery belt, highlighting the state’s inherited strengths — from deep automotive manufacturing know-how to a strong talent pipeline and supply chain.

“All things considered, Michigan has a lot to offer,” Rayl said.

Withstand uncertain market conditions

So far, the auto industry’s path to electrification has been bumpy, with consumer demand for electric vehicles growing slower than expected, said Mike Wall, executive director of automotive analysis for S&P Global Mobility. The decline comes when the market reaches a all-time high in the availability of electric vehicles.

“The EV programs right now are not achieving the volumes that were promised to these suppliers, and we were concerned from the beginning that this would not be a linear transition,” Wall said, adding that, “We’re in this soggy middle , let’s call it 2024 to 2027, 2028.

However, Michigan may have an advantage over states that have invested heavily in electric vehicles. Traditional automakers in the state, such as Ford Motor Co., General Motors Co. and Stellantis, according to Wall, have a strong internal combustion vehicle manufacturing base to support their businesses while continuing to invest in electric vehicles for the long term.

“If you’re building electric vehicle battery plants as far as the eye can see, if they don’t get that volume, you’re going to end up with cutbacks: reduced investment, layoffs,” Wall said. “Not to take anything away from the South, they have internal combustion engines over there too, but in terms of preponderance, we have a long history of experience within that base camp – we’re not neglected on the electric vehicle side, but we have a good mix ”.

An advantage in terms of industry know-how

From vehicle design to workforce training programs, Michigan’s roots in traditional automotive set it apart.

“We know how to build cars, and now we’re moving towards making cars that run without electricity,” Rayl said. “An electric vehicle actually has fewer parts. It is much easier to make than an ICE vehicle, so we have a lot of institutional knowledge about how to design, engineer and produce cars, which we can take advantage of in this transition.”

Major automakers, including General Motors and Ford, as well as global tier-one suppliers such as Magna, Bosch and Denso, are headquartered in Michigan, with dedicated research and development operations. Even automakers without a manufacturing footprint in the state, such as Toyota and Honda, maintain extensive research and development facilities there, said Jonathan Smith, senior deputy director of the Michigan Department of Labor and Economic Opportunity.

For years, the Environmental Protection Agency’s laboratory in Ann Arbor has helped develop local ICE expertise and engineering expertise for more fuel-efficient engines, while LG’s early battery investments recruited engineers in battery industry in the state, Smith said.

On the other hand, states attracting new automotive and battery investments are starting from scratch in terms of needing to build that base, including talent. According to Smith, Michigan’s workforce, however, is well positioned to adapt quickly through new programs or upskilling programs run by training providers with decades of experience.

Enhancing that flexibility, experts say, is Michigan’s successful alignment of federal and state agencies, universities, and local and private sector groups on developing EV-specific curricula. Numerous programs are already underway and stakeholders are leveraging existing workforce training infrastructure for implementation.

“Michigan has a strong history of workforce planning geared towards automotive manufacturing, and when we think about the shift to electric vehicles, it’s not the first time we’ve encountered a technological or economic shift,” Smith said. “We are used to responding quickly.”