Automakers Optimistic About Constant Progression

Detroit's largest industry getting gears turning after fallout

Detroit Auto

The woes of the auto industry have dominated business headlines all year – which has had and will continue to have a devastating toll on African American suppliers. “We had some projections going in that we might lose 50% of the black automotive suppliers. Now, with having a better sense of some additional data, it may be closer to 75%,” says Louis Green, president of the Michigan Minority Business Development Council. “They are probably responsible, just that group that might go away, they’re probably responsible for 38 to 45,000 employees. They provide a lot of opportunities to the black accountants, black IT firms, black marketing the trash and trinkets.”

This industry will most likely remain inextricably linked to Detroit and will continue to have an impact on the future of this city – even as the former Detroit Three struggle to regain their footing and market share. “One of the big bets that we are making is that electric vehicles will be an integral part of the automotive platform and strategy for years to come,” says Rod Gillum, vice president of corporate responsibility and diversity. “So we start talking about the Chevrolet Volt, with plug-in technology, we think we’re ahead of the game, we’re going to be the leader of the pack, and we’re going to bring out the vehicle next year.”

Should this vehicle – and others like it – succeed, this creates yet another opportunity in Motown. No infrastructure is currently in place to equip traditional gas stations with plug in ports for electric vehicles. “You have to put those in garages, you have to put those in carports, you have to locate those around cultural institutions. There will be hardware that will be required for that technology,” says Gillum. “Someone has to install that, someone has to manufacture the hardware, someone has to put it in commercial locations. So we fully expect that there will be a robust industry built around all the requirements associated with it.”

While General Motors places part of its hopes on electric powered vehicles (which have failed in the past), one thing is certain: the automobile isn’t going away and the automakers will continue to have an impact on the city in which they’ve operated for the last century. “GM is on good, solid footing. I don’t buy all of their rosy outlook regarding floating stock next year and being able to pay back the government real quick,” points out George Magliano, who heads US auto analysis for Global Insight, a provider of financial analysis, forecasting and market intelligence. “I think it’s going to take them awhile but they’re definitely going to survive. The Chrysler Fiat deal has a lot more risk involved but I think at the end of the day, they’re still going to be there. Ford is on good footing. They’ve ridden to the top of the heap right now.”

Magliano remains cautiously optimistic about the industry but sees the landscape continuing to evolve in Detroit. “The industry has been shifting all along. It’s not new. We’ve gone from the Big 3 to the Detroit 3 to the Big 6 and with this bankruptcy reorganization, you’re going to have different people in this business,” he says. “It’s a whole gamut of different things we’re going to be living with for awhile. The whole face of this industry has changed where Detroit controlled it and felt it was born into this business and this is the way it operated and it’s not that way anymore.”

Further Reading:

Can Detroit Be Saved?

Tourism Holds Prime Opportunities

Aerotropolis Is Expected to Help Revive Detroit’s Economy

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