Will the Electric Vehicle Revolution Leave Michigan Behind?
As more automakers invest in the American South, is Michigan being left behind?
Detroit may one day find itself becoming the Motor City in name only if
automakers
continue to divest from Michigan
's largest city in favor of the American South.Will Michigan be left behind in the auto industry's race to build electric vehicles?
The downfall of the Motor City?
As
CNBC
reports, the automotive industry has long been investing in facilities in the American South—such as Ford's Kentucky Truck and Louisville Assembly plants, as well as General Motor's Spring Hill plant.While Detroit was the city that "put the world on wheels" and served as the Arsenal of Democracy during World War II, automakers have increasingly been ditching the Motor City to go south to states like Kentucky, Tennessee, Georgia, and Texas.
A history of investment
Ford was one of the first automakers to invest in Kentucky in the 1950s-1960s. Nissan soon followed with a facility in Tennessee in the 1980s, while Subaru and BMW moved south in the 1990s.
Even new automakers like Tesla have invested a considerable amount in their southern factories.
As more automakers set their eyes toward the American South for their
electric vehicle
production, their investments are transforming local communities as well as the labor, supply chain, and logistics of the auto sector. CNBC reports that officials consider companies that are first to set up shop in the South have an early advantage over their northern counterparts.
Automobile executives state they're
investing
in the South for a variety of reasons, including cheaper energy costs, an accessible staff, and livability. Many Republican-controlled southern states also have some contentious perks like all-in lower pay for workers, millions in tax breaks, and a practically nonexistent unionized workforce.
Is Michigan getting left behind?
Maybe, if General Motors and Ford keep shifting their electric vehicle investments from Michigan to the southern states.
In general, southern states have lower electricity prices than Michigan—which adds up to tens of thousands of dollars in
electricity
savings annually at Ford's new battery plants
, for example.But some southerners are apprehensive about automakers establishing factories in their rural communities.
Rivian
faced some pushback from communities and politicians arguing against a proposed $1.5 billion tax break for its proposed plant outside of Atlanta.There's also the fact that autoworkers' unions haven't been able to establish themselves in a non-Detroit automaker in the South.
Even then, Ford and GM have said they're leaving the decision of unionizing to the workers at its new battery plants—a blow to the labor movement if they vote not to.
But so long as workers don't unionize and utilities remain cheap, non-Detroit automakers will likely keep moving their facilities to the American South, leaving the Great Lakes in the rear-view mirror. But hey, anything that helps the bottom line, right?
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