The need to diversify: understanding the broader manufacturing industry in Michigan.

Author:Mead, Chris
Position:FEATURE
 
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"Why don't we make things in this country anymore?"

You hear people asking that question all the time. The simple answer is: We DO make things in this country, and we DO make things here in Michigan--particularly in the Detroit Region.

The real question we should be asking is, "Are we making the right things, and do we have the right people to make them?" The answer to this question is not so simple, but it is critical to the economic future of our state and our region.

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First the bad news: according to a recent report by the American Manufacturing Trade Action Coalition, Michigan has lost 315,200, or 35.5 percent, of its manufacturing jobs over the last eight years. That's the biggest percentage decline in the nation, and it is playing out primarily in our struggling automotive and automotive-related industries.

The evolving nature of Michigan's economy is most evident in the fortunes of our two most important industries, manufacturing and health services. According to the Michigan Department of Labor & Economic Growth, health services is on the brink of overtaking manufacturing as the state's largest source of jobs. At the same time, however, the job losses we are currently experiencing in the manufacturing sector far outnumber the gains in other sectors.

But wait, there's good news too. We are slowly but steadily taking steps to diversify our economy and build a robust non-automotive manufacturing industry in such areas as biotechnology, alternative and traditional energy, aerospace and defense, to name a few. It's a tentative process, to be sure, but many industry experts believe it will ultimately be a transformative process with major implications for our economic future.

Mark Tomlinson, executive director and general manager of the Society of Manufacturing Engineers (SME), headquartered in Dearborn, is one of them. He sees traditional manufacturers of automotive components engaging in some serious retooling to make products for non-automotive markets, such as medical devices. "Those who were ahead of the curve in this transformation are maintaining their revenues and profits," he said. "Those that were behind the curve, totally relying on the automotive sector, are in a catch-up mode."

Failing to build on this trend towards economic diversification is not a wise option, Tomlinson warned. "If we are no longer a force in producing a core component of what drives the engine of this country, i.e. manufacturing, we will become a service provider, a state that provides services rather than a state that provides a contribution to the GDP (gross domestic product) of the country. And with that there are consequences to our wage and tax base, our infrastructure, our population. All of those things would be...

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