The manufacturing industry is one of the main backbones of the Michigan economy. Over the years, it has provided the state with a steady source of employment.
Manufacturing jobs in Michigan pay exceptionally well compared to other industries. In fact, a manufacturing employee can earn an average of $1,132 per week in 2011. 37% of the total manufacturing workforce who work for private companies earn 37% more than the average weekly gross income.
With all that, it is undeniable that manufacturing is ingrained in the DNA of Michigan. In this article, you will learn about the important facts that describe the current state of the manufacturing industry in Michigan.
The History of Manufacturing in Michigan
Before discussing its current state, it is vital first to understand the humble origin of Michigan’s manufacturing industry.
Michigan has a long history in manufacturing that can be traced to the beginning of the automotive industry. Ford and General Motors established their companies and factories in Michigan during the early 1900s. This was the beginning of the rise of the manufacturing industry in the state.
After Ford and General Motors, a few other automotive companies also established their factories in Michigan. In fact, at one point, over twenty automobile factories were in Jackson, Michigan.
Many other manufacturing plants were established around the area to supply the demand for car parts needed by the major automotive brand’s assembly line.
Food manufacturing also holds a huge chunk of Michigan’s manufacturing history, especially when it comes to breakfast cereals. The Post Company and Kellogg Toasted Corn Flake Company further solidified the manufacturing industry in Michigan during the 1900s.
Aside from automotive and food manufacturing, there is also a huge presence of furniture companies and plants in Grand Rapids dating back to the 1800s. This was because the logs were easily transported via the Grand River, making it an ideal location. As time went by, the city was later dubbed as “Furniture City.”
The Importance of the Manufacturing Industry to Michigan
The manufacturing business accounts for 19.38% of the total output of Michigan. It employs over 14.24% of the state’s workforce. As of 2018, the total output was $102 billion, with more than 630,000 workers. Furthermore, the average salary for employees working in the manufacturing industry is around $79,320 a year since 2017.
Here is a breakdown of the manufacturing sectors prevalent in Michigan and the number of employment opportunities that they provide:
1. Automotive Manufacturing
The automotive manufacturing sector takes the largest chunk of the pie in the manufacturing industry of Michigan. It offers over 137,000 job opportunities across the state. This sector includes companies and plants that manufacture vehicle parts and trailers.
2. Metals Manufacturing
Refine metal or smelt manufacturing is also very prevalent around Michigan. It provides over 91,400 jobs to Michiganders. This includes Michigan machine shops, coating and heat treating, structural metals, and steel mills.
3. Machinery Manufacturing
The machinery manufacturing sector in Michigan provides around 60,000 jobs. This pertains to the designing and assembling of equipment used in various industries. Some of these are metalworking equipment, engine and transmission, and HVAC.
4. Food and Beverage Manufacturing
As mentioned above, Michigan has a large presence of food manufacturers. They produce over 38,300 jobs, which deal with the packing, processing, and canning of various edible goods.
5. Plastics and Rubber Products Manufacturing
There is also a large presence of plastics and rubber product manufacturers. They provide over 32,00 jobs. These companies mostly manufacture foam products, plastic bottles, urethane, and other rubber and plastic automotive parts.
6. Bioscience Manufacturing
The bioscience industry includes the manufacturing of agricultural chemicals, pharmaceuticals, and medical grade. This sector provides around 24,000 jobs in Michigan, making them one of the country’s largest producers.
7. Furniture Manufacturing
Although Michigan has what is known as “Furniture City,” the furniture manufacturing sector only creates around 19,200 employment opportunities, which is relatively lower compared to what the automotive sector brings to the table.
8. Chemical Products Manufacturing
Chemical product manufacturing refers to the process of transforming raw materials using chemical processes. This sector provides Michigan with around 18,000 job opportunities for its residents to manufacture products such as adhesives, coatings, paint, cleaning, soap, and synthetic fibers.
9. Computer and Electronic Manufacturing
There has also been an emergence of computer and electronic manufacturing plants in Michigan in the past few years. This has resulted in the employment of over 13,000 people.
Many defense-related manufactures have also decided to select Michigan as a location for their plants and factories. Over 5,900 people are employed in this sector. They manufacture products such as military armored vehicles, navigation and guidance, and aerospace products.
The defense-related manufacturing sector only employs a few people because most of its employment opportunities require a higher degree of skill and education due to its advancement and delicate natures.
The State of Manufacturing in Michigan During COVID-19
Without a doubt, Michigan has a thriving manufacturing industry. However, just like the rest of the world, it has taken a significant toll due to the COVID-19 pandemic.
In the 1.3 million Michiganders who filed for unemployment benefits since the beginning of the pandemic, 37% are from the manufacturing industry. The unemployment from the manufacturing industry is high because Macomb, Oakland, and Wayne, which are the major counties with manufacturing hubs in Michigan, have many positive cases.
In addition to that, six types of manufacturing businesses have decided to lay off over 40% of their workforce. These businesses are also closely related to Michigan machine shops, transportation equipment manufacturing, automakers, plastic and rubber, and fabricated metals.
Although food manufacturing is considered an essential business and still continues to operate, many factories are still laying off employees due to dropping sales. An estimate of around 18% of the food manufacturing sector has employees filing for unemployment.
Here are some of the manufacturing companies in Michigan who have done major employee layoffs as cross-cutting due to the financial loss because of COVID-19:
1. Aludyne Inc.
Aludyne is an automotive parts manufacturer. It has totally closed its plant in Warren, resulting in the permanent job loss of 115 Michiganders. This company also permanently laid off 44 employees from its Stevensville and Benton Harbor facilities.
Another 40 employees from the Montague facility of this company also suffered the same faith.
2. AK Steel Corp.
AK Steel Corp is a steelmaking company with Dearborn and Troy facilities. It has announced that it will close its Dearborn plant and permanently terminate 343 employees because of the huge reduction in production demand because of COVID-19.
3. ZF Friedrichshafen AG
ZF is a German auto supplier. As of March 2020, it has ceased its operation in Lapeer. This resulted in 240 workers losing their jobs.
4. Mann + Hummel USA Inc.
Mann + Hummel USA Inc. provides industrial machinery. It has announced that their Portage plan will stop operation in March. 377 employees will lose their jobs because of this.
5. Adient PLC
Adient PLC announced that it would be cross-cutting employees’ salaries who do not work in their plants to stay afloat from the ongoing crisis. They say that this is a better alternative for the time being, compared to permanently laying off employees.
Although the number of terminated employees is devastating, it will only continue to grow by the thousands in the next few months as many more manufacturers will be unable to bear the operation cost without any sufficient sales coming in.
The Implications in the Future
The effects of the COVID-19 pandemic on the manufacturing industries in Michigan is devastating. Since there is yet to be a cure for the virus, it is yet to be announce when the hard times will end.
Even when the COVID-19 pandemic ends, the manufacturing sector in Michigan will still have difficulty bouncing back to its former glory since many factories have permanently closed.
As for the employees who have been laid off, they will have difficulty finding jobs in the next few months. The opportunities are very sparse since other areas, and industries are also greatly affected.
This will take a toll on the state’s financial capacity because thousands of people will depend on unemployment benefits. Only a few will have sufficient buying power to sustain the economy.
Many compare the effects that have come due to the COVID-19 pandemic is highly similar to what was feel during the great depression. Michigan manufacturers need to fight tooth and nail to stay afloat during these trying times.
There will be plenty of plants that will be closing and more people will lose their jobs. However, since Michiganders and the manufacturing industry have resilience, some of them will somehow survive the storm and continue to thrive in the future.