How Industrial Automation Helped Detroit Recover

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Michigan has a legacy of making things. Furniture, aerospace and military equipment, food products, the list goes on. Most famously, though, Michigan is home to the center of the U.S. automotive industry: Detroit, Motor City USA.

Detroit is still home to the Big Three auto companies. It’s where Ford developed the moving assembly line, paving the way for the mass-production of automobiles that would change the face of our nation. Despite facing dire challenges during the Great Recession, with the perseverance of its manufacturing industry and the help of innovations like industrial automation, Detroit has made an impressive comeback.

The Recession

Over the past two decades, Detroit has seen remarkable changes. In what has been called Detroit’s “lost decade” of the early 2000’s, the city fell victim to the struggles of the automotive industry. Nearly 1 million jobs left the state from 2000 to 2013, and Detroit lost almost 25% of its population. The Great Recession hit hard, even with the federal bailouts for Chrysler and GM. In 2013, when the city filed for the largest municipal bankruptcy in US history, the population was at its lowest since the 1910 census.

The Recovery

This low point pushed the city and the automotive industry to reflect and reinvent itself. As the recession ended, Americans started buying cars again. To keep pace with domestic demand, more automotive manufacturers and their suppliers brought operations back to the US. To handle the increasing demand despite a decreasing population, the industry had to grow smarter. A large part of that has been through automation, allowing domestic manufacturing and assembly facilities to become more efficient and productive – and therefore more competitive in the world market.

The Revival

The embrace of automation has led to growth in other areas. Detroit is the hub for robotics in America. In 2018, it was selected as a host city for the world’s largest robotics competition, the FIRST Championship, and will continue hosting in 2019 and 2020.  Two of the top robot manufacturers, Fanuc and ABB, have their North American robotic headquarters in Auburn Hills, just outside Detroit. Much of the growth these robot manufacturers have seen in the past decade is outside of the Automotive sector. For example, ABB sales for automotive is down to 60 percent of their business from 80 in the 1990s. Newer applications include machine tending and other material handling work.

Another automation enhancement is the turn toward self-driving cars. As the center of the automotive industry in the U.S., along with its STEM educational institutions, such as the University of Michigan, Detroit is looking to be a leader in the development of self-driving cars. There is even a new autonomous vehicle testing complex at Willow Run, near Ann Arbor, MI.

The Result

The biggest benefits that automation provides is freeing up both monetary and human capital. Yes, some jobs in manufacturing are being replaced by robots, but humans are still necessary to supervise, develop new processes and technology, and conduct quality control. The result is higher paying, less labor-intensive jobs. This also frees up resources and investment for other industries. Amazon has invested in the city by establishing an IT office. Dan Gilbert has invested heavily into the city, including the move of Quicken Loans’ headquarters and 1,700 employees downtown. Other companies like Shinola, a manufacturer of luxury watches, bicycles and leather, saw Detroit as an ideal destination to take advantage of the rich culture.

Detroit’s unemployment rate is now 5%, down from a high of 28.4% in 2009. The US auto industry currently employs more workers than at any time since March 2008. With the continued use of automation to keep US manufacturing competitive in the world market and free up resources for innovation, Detroit should continue to grow, reinvent itself, and make things that change the world.

 

Reed joined Bastian Solutions in January 2006 as a Field Application Engineer. In this role, he worked across industries including manufacturing, food and beverage and distribution providing business development, system design and project management. In 2014, Reed was promoted to Regional Manager for Bastian Solutions' Michigan offices, and most recently, relocated with his family to Florida to oversee the opening of the company's newest regional office. Prior to joining the company, Reed earned his degree in Mechanical Engineering from Notre Dame.

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