Howes: Michigan auto towns get some love — and capital

Howes: Michigan auto towns get some love — and capital
Daniel Howes, The Detroit News Published 10:24 p.m. ET Aug. 8, 2019

Southeast Michigan’s auto towns are hot again.

Even as General Motors Co. prepares to stop production at four U.S. plants — including one in Detroit — the automaker and its rivals are unspooling plans to reinvest in the Motor City, in Flint the “Vehicle City,” in old assets with new plans to secure places in both the traditional industry segments as well as the Auto 2.0 spaces of mobility, autonomy and electrification.

The reasons: today’s politics, to be sure, in the era of “Make America Great Again” and the presidential bully pulpit known as Twitter. But there’s also recognition that untapped capability still exists in the auto strongholds of the last century — and that today’s companies reap a special benefit from reinvesting in old plant towns and sites.

An auto town win: Mayor Karen Weaver speaks after GM President Mark Reuss announced a $150 million investment earlier this summer in the Flint Assembly plant.Buy Photo
An auto town win: Mayor Karen Weaver speaks after GM President Mark Reuss announced a $150 million investment earlier this summer in the Flint Assembly plant. (Photo: Max Ortiz, The Detroit News)

They do in this town, and they should in places like Flint. Automakers spent a lot of years and billions in capital adding capacity mostly outside the industrial heartland, only to shut down in states like Virginia and Delaware, Georgia and Louisiana as they expanded in Mexico and touted growth in China.

Trump partisans would credit the president of the United States for bending the industry to his will — and there’s no question he uses social media to try to influence decision-making at the highest reaches of the industry. But something more is going on.

Investing at home is good business in towns America gave up for dead. They’re places like Flint where disinvestment and deindustrialization are real, where the past several generations failed to experience the boom of nation-leading per capita income, ever-richer union contracts, the quiet assurance that the plant nearby would always get new product to build.

They’re also places like Detroit, where risk can be rewarded. GM is doubling down on its Flint Assembly Plant, adding jobs and investment to build its heavy-duty pickups, even as it idles Lordstown Assembly in northeast Ohio and signals plans to do the same at its Detroit-Hamtramck plant. Ford Motor Co. acquired the long-vacant Michigan Central Depot with plans to transform it into the anchor of its Auto 2.0 campus in Detroit’s Corktown neighborhood.

Fiat Chrysler Automobiles NV is investing more than $4.5 billion in southeast Michigan to meet demand for its Ram pickups and Jeep Grand Cherokee SUVs. The east side of Detroit will get a $1.6 billion assembly plant on the site of its old Mack Avenue Engine Plant, soon to be home to its coming three-row version of the best-selling Jeep.

And would-be competitors are looking to join the game. Mahindra Automotive North America Inc., a unit of the Mumbai-based Mahindra Group, told The Detroit News earlier this week that it is pressing ahead with plans to build the company’s first major U.S. assembly operation on Flint’s vacant Buick City site, where GM stopped building cars 20 years ago.

Yes, something’s going on. Investing in Detroit and Flint is cool again. And old auto sites discarded (or in the process of being discarded … by GM) are catching the fancy of startups angling to beat big, established players at a new game.

Not too long ago, the verdict on Detroit vs. Silicon Valley was rendered: tech would win and exemplars of the Old Economy, of Old Detroit, would lose. Until reality set in, until the smartest people on the planet learned the hard way that building cars and trucks repeatedly and with precision ain’t as easy (or as profitable) as it looks.

The founder of Lordstown Motors Corp., angling to produce electric trucks at the idled GM assembly plant in Ohio, touts the deep well of local expertise for assembling world-class vehicles. Google parent Alphabet Inc.’s Waymo LLC self-driving car unit is using FCA’s Chrysler Pacifica van to tally mile after mile of autonomous-vehicle testing.

And automakers are pumping real capital into cities they left, whether by choice, competition or both. Yes, the prospect of Flint getting more GM investment, or a redevelopment by the likes of Mahindra, is scant comfort to the men and women of the Mahoning Valley taking transfers or waiting to see if national contract talks can rescue their Lordstown plant.

They probably can’t, if consensus among both GM leaders and union types in Lordstown are any indication. But some other auto towns, including Detroit and Flint, are winning some big ones again — and that’s worth celebrating.

daniel.howes@detroitnews.com

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