Economic impact: what manufacturing means to our economy.

Author:Armstrong, Melissa
Position:FEATURE - Statistical table
 
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Detroit's Manufacturing Legacy

Detroit's early economic development was spurred by a combination of factors: the opening of the Erie Canal in 1826, the city's Great Lakes location, the increasing use of rail transport, the growing lumber and flour-milling industries and the availability of a skilled labor force. By the second half of the nineteenth century, Detroit and its environs developed a substantial and diverse industrial base. Bulk product industries made iron and steel, copper ingots, salt, chemicals and a bewildering variety of wood products. The city's industrialists achieved great success and national fame by manufacturing a wide spectrum of goods seldom remembered today as products of Detroit. The city was home to substantial manufacturers of consumer goods such as shoes, tobacco products, paint and varnish, packaged seeds for flowers and vegetables, beer, pharmaceuticals, healing and cooking stoves, and big-ticket capital goods including ships and railroad cars.

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In 1896 Charles B. King determined Detroit's destiny when he drove a horseless carriage on the city streets. Soon Henry Ford introduced his own version of the conveyance, and Detroit was on its way to becoming the automobile capital of the world. The sudden emergence of automobile manufacturing after 1900 changed the city's industrial character nearly overnight. By 1915 Detroit was the automobile-manufacturing center of the United States, and the auto industry dominated Detroit's economy. For the rest of the 20th century this single industry determined the city's fate and defined its character.

The Legacy is Challenged

You'd have to be living in a cave to not know by now that manufacturing employment in the United States is declining. In the last ten years, employment in the manufacturing sector has declined nearly 25 percent. The reason for this is subject to debate. Many blame off-shoring, while others cite improvements in productivity and increased foreign competition. For the Detroit Region and the auto industry, these trends have contributed to the economic turmoil currently challenging one of this region's proudest legacies.

In 1990 about one in five people (21.2 percent) in the Detroit Region worked for a manufacturer. By 2007 this number had dropped to about one in seven (14.8 percent). But manufacturing employment in the Detroit Region is still above the national average. Manufacturing firms provide about 12 percent of U.S. jobs, compared...

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