For more than a century, Michigan has been known as the center of the automotive industry, with much of the focus and attention on Detroit (aka the Motor City). Over the last 50 years, however, West Michigan’s automotive supply chain has grown significantly and become a critical and robust sector not only for the region, but for the automotive industry as a whole.
While the auto industry has experienced explosive growth since the Great Recession, it continues to go through significant adjustments as major changes are made in the wake consumer trends and the impact of autonomous vehicles. As we've seen with the recently announced GM plant closures, it is natural to theorize that major shifts and disruptive changes will continue to be felt by regional automotive suppliers over the coming years as the original equipment manufacturers (OEMs) implement their electric and autonomous vehicle strategies.
West Michigan’s automotive cluster
Despite being located on a peninsula, West Michigan is geographically well positioned to supply the automotive OEMs. Within a day’s drive (10 hours) of Grand Rapids, Michigan, there are currently 38 automotive assembly plants, with 11 of them located in-state.
According to our data, we estimate there are more than 530 existing manufacturing and engineering design firms in West Michigan that supply or serve the automotive industry. These companies support more than 55,000 jobs in the region.
(Note: These figures do not include automotive dealership or automotive maintenance businesses)
While West Michigan does not have a large automotive OEM presence, its supplier base is strong and diverse. The largest sector in its automotive supply chain is the machinery manufacturing sector. These companies make the machinery, tools, and dies that are sold to other suppliers as well as to OEMs.
In addition to the nearly 150 machinery manufacturing companies in the region that supply the automotive industry, there are also nearly 120 fabricated metal product manufacturers. Other major supply industries in the region are: plastic and rubber product manufacturing, transportation parts manufacturing and primary metal product manufacturing. These top 5 automotive supply sectors employ more than 33,500 workers in the region.
From The Right Place
In recognition of our region’s strong and diverse automotive cluster, The Right Place dedicates a large amount of time meeting with automotive suppliers through our business retention and expansion efforts. During the last calendar year, The Right Place business development team met with more than 100 manufacturing companies that supply the automotive industry. Here’s what we heard:
The recent and ongoing strength of the automotive suppliers in our region is apparent when you look at our recent expansion and attraction projects.
Over the last two years (2017-2018) we have worked with 14 automotive suppliers to assist with 11 expansion and 3 attraction projects, which collectively created:
- 576 jobs
- $35.6M in payroll
- $102.2M in capital investment
Through many of these expansion and attraction projects, The Right Place also connected companies to more than $1.8M in training incentives and $5.5M in other performance-based incentive programs.