Michigan has experienced a substantial decline in its automotive workforce over the past two decades, losing more than 125,000 auto jobs, representing a 41% drop. This significant shift has occurred as states in the American South, including Alabama, South Carolina, and Tennessee, have simultaneously gained tens of thousands of manufacturing positions, reshaping the nation's automotive landscape. The trend underscores a broader geographical redistribution of the auto industry.
The job losses in Michigan, historically the heart of the U.S. auto industry, are attributed to various factors, including outsourcing, increased manufacturing efficiency, and a shift in market share to foreign automakers. These foreign companies, such as BMW, Mercedes, Honda, Hyundai, Kia, Nissan, and Toyota, have predominantly established new production facilities in Southern states rather than expanding in Michigan since the 1990s. This has led to a diversification of Michigan's economy, though its auto manufacturing employment has not returned to peak levels.
Conversely, Southern states have actively courted auto manufacturers with favorable business climates, competitive labor markets, and significant incentives. From 2001 to 2023, Alabama, South Carolina, Georgia, and Tennessee saw their auto and auto parts jobs increase by 203%, 86%, 32%, and 24% respectively. Alabama, for instance, has more than doubled its auto industry employment between 2002 and 2019, becoming one of the top five states for auto manufacturing.
Major automakers have invested billions in these Southern facilities. Hyundai Motor Manufacturing Alabama, for example, has been producing vehicles in Montgomery for two decades, contributing to the state's economic transformation. The growth in the South has been driven by both foreign and domestic manufacturers seeking new operational bases.
The tweet from MichCapCon succinctly captured this transformation: > "Michigan lost more than 125,000 auto jobs over the last two decades — a 41% drop — while Alabama, South Carolina, Tennessee, and other states gained tens of thousands." This highlights a strategic pivot in the industry, moving production closer to new markets and benefiting from different economic conditions. The shift has profound implications for regional economies and the national manufacturing sector.