On Sept. 27, Ford
celebrated 100 years of manufacturing at its Rouge Plant in Dearborn. And that's just one example of the long history of engineering and manufacturing automobiles in southeast Michigan.
Detroit area automakers and their parts suppliers have spent the last century building and refining the manufacturing infrastructure that serves the OEMs so they can create a variety of vehicles to scale. While technological innovation can crop up anywhere, there are powerful reasons why automotive companies continue to manufacture vehicles in southeast Michigan.
The greater Detroit area has been a hub for designing and building automobiles for decades, and the region is poised to continue to be an automotive hub into the future, even as the industry faces challenges ranging from the push for market-ready automated and connected vehicles to competition from technology firms around the world.
The automobile's past informs the industry's present
"In the 1920s, Henry Ford wanted to build everything about the car except the tires," says Alan Lecz, director of the
Advanced Transportation Center at Washtenaw Community College (WCC.) "But over the last 100 years or so, the model has changed dramatically for OEMs."
Today, manufacturing of subsystems for automobiles are outsourced to lots of places, but OEMs are integrators of all those subsystems.
"You still need Tier 1 and Tier 2 suppliers to be located pretty close to OEMs because there's so much collaboration and dialogue going on so rapidly," he says.
Tom Kelly, executive director and CEO of
Automation Alley, says that Silicon Valley and other innovation hubs are trying to compete on the digital front, but the Detroit region remains a hub for the automotive industry because it's where software and physical components meet.
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Tom Kelly, executive director and CEO of Automation Alley.
"Silicon Valley is extremely good at digital, at making software that can be iterated over and over. But when software has to meet the real world in a physical space in a car, it gets difficult," Kelly says. "You can't have 16 software updates on a safety system. It has to work out of the gate perfectly, every time. The marriage of digital and physical makes a difference for how Detroit maintains its lead in mobility."
This interplay is also evident in
Industry 4.0, the collection of key emerging tech sectors that are disrupting traditional manufacturing techniques. This "Fourth Industrial Revolution" is a focus for Automation Alley, which supports manufacturers throughout this rapid change.
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Automation Alley is a Michigan-based business accelerator and expert in Industry 4.0.
Samit Ghosh, CEO and president of consulting and testing firm
P3 North America, agrees that while California, Israel, and Germany all have strong technology startup scenes, integration is where Detroit continues to shine.
"If you really want to bring this technology into a vehicle, you have to have an understanding of how to handle the hurdle of integration and need a strong understanding of the vehicle itself," Ghosh says. "That's not so easily available with people who have no experience working on a vehicle."
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Samit Ghosh, CEO and president of consulting and testing firm P3 North America based in Southfield, Michigan.
Even when auto technology companies establish their headquarters outside southeast Michigan, they often have a research and development office in the Detroit area or recruit from the Detroit auto sector.
"In another non-traditional automotive location, we see startup companies that want to be car companies," says Ghosh, who was named to the advisory board of
PlanetM earlier this year. "And when they're ramping up, what is the first thing they do? They hire a Detroit-trained engineer to move and build up the vehicle knowledge you need in order to be successful."
David Palmer, senior director for strategies & partnerships at the
Workforce Intelligence Network (WIN) for southeast Michigan, says Detroit has the advantage of "multiple generations of talent that understand the ecosystem of the automobile."
He says that Detroit has built up a "brain trust" on the topic of automotive technology and says statistics about the density of engineers and IT professionals writing code for that new technology bears that out.
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P3 North America manufactures prototype decks to test automotive client innovations.
Chris Heiler, operations and supplier management BU lead for P3, also notes density of talent as an advantage. The Detroit area has the talent pool and experience auto companies need, all the way from vice presidents to the shop floor, and southeast Michigan has the schools that teach the relevant courses and the employers who provide the most relevant work experience, he says.
"That's what makes it a hotspot. Detroit is proving that in 10 or 15 years, they'll not just be the ones providing metal boxes but actively integrating all this technology [into cars]," Heiler says.
Remaining relevant in the future
For Detroit to remain the engineering and manufacturing center of the automotive industry, Southeast Michigan companies must stay ahead of the curve on autonomous and connected vehicle technology and solve workforce issues in the making.
Heiler says how automakers respond to new technologies will depend heavily on how they market and brand themselves. The utopian vision of a country full of driverless cars doesn't mesh with every brand or with every market.
For a driver in a congested metropolitan area who would like to answer emails during a long commute, a fully-automated car might seem like a blessing. On the other hand, some automakers sell their lines of vehicles with marketing around the joy of driving. Those drivers might buy a car with some autonomous safety features like assistive cruise control but aren't likely to buy a car without a steering wheel.
The biggest challenge for Detroit to stay relevant in the future, though, is workforce development.
The nature of the new jobs being created in the automotive industry requires more IT capability and cybersecurity training for product design engineers and other automotive jobs.
"The scope of the work is changing, and the technology required to do the job is changing," Lecz says, adding that there's a "widening gap" between open job positions and the skills of those trying to land those jobs.
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P3 North America's ADAPT vehicle used to test client autonomous vehicle innovations.
Lecz believes that community colleges, if they make the right moves, can be at the forefront of preparing students for the automotive jobs of tomorrow. One of WCC's strategies is using advisory committees with representatives from major auto companies.
"We're asking what skills are required, what's changing, what should we be teaching, what should students be experiencing in labs?" Lecz says.
WCC has invested in multiple pieces of state-of-the-art equipment, like an engine dynamometer, so that students don't have to wait in line behind 15 classmates to try their hand at using it.
Palmer says that, in order to stay an automotive hub, Michigan needs to invest in quality public education, from the K-12 level to college and beyond.
"Even if we quadrupled the output of engineers and software engineers from post-secondary institutions, it wouldn't meet the needs of employers during a growth phase," Palmer says. "In 2016, there were nearly 90,000 job postings just in IT, and not including engineering [job titles], and we're not putting out the equivalent numbers into the post-secondary graduate marketplace."
He says innovative programs for re-skilling and up-skilling existing workers are needed, along with more apprenticeship opportunities.
"Access to quality, lifelong learning is key to having a workforce that can adapt to technological and social innovations as they occur," Palmer says.
Visit Driven and learn how the Detroit region is leading the world in next-generation mobility.
Photos by Steve Koss.