A new report says Michigan faces 'a critical time,’ needs innovation to
retain $348B auto industry
[January 10, 2026] By
PAULA GARDNER/Bridge Michigan
Michigan needs to confront risks to its $348 billion piece of the global
automotive industry this year and move decisively toward keeping jobs,
engineering and production in the state.
That message comes from Glenn Stevens, executive director of statewide
industry advocacy group MichAuto that last month released a report he
describes as a “call to action.”
This is “a critical time in the industry’s history,” Stevens told Bridge
Michigan.
“We are at an inflection point like we’ve never seen before. We’ve got
to be making changes and doing things differently to protect our
signature industry and our economy as a whole.”
The concern is escalating as Michigan readies for its largest automotive
celebration: The annual Detroit Auto Show, which returns to Detroit’s
Huntington Place from January 17-25.
The auto industry accounts for about 20% of Michigan jobs and has a
payroll of $83 billion.
The report warns Michigan must bolster its innovation economy or “be
left behind.”
Over 2026, MichAuto will launch a roadmap for policy, economic
development and talent attraction for the industry to thrive in
Michigan, Stevens said.
That will come after a year when the auto industry reeled from waves of
tariff changes, new fuel economy standards and more. Underlying it all
were federal changes and market forces that prompted automakers to
curtain their electric vehicle strategy.
Among them, Ford Motor Co. in December said it would take a $19 billion
hit to shift its EV capacity to gas-powered vehicles, while adding new
energy storage systems to its EV battery lineup.
Beyond that, southern US states are building a “battery belt” by
actively recruiting automakers and suppliers, including those from
Michigan. And the Chinese auto industry is advancing “at an astounding
rate as it attempts to dominate the race for electrification,” the
report says.
Combined, the report says, changes mean that Michigan cannot rest on its
automotive legacy to maintain economic benefits, like employment and
powering the state’s GDP.
Due to automation and the digital economy, Michigan needs to elevate
innovation as a business goal that will create jobs and economic growth,
Stevens said.
“We have to double down on the research and development part of the
industry,” Stevens said, noting that Michigan is the top state for
privately funded auto R&D research.
Innovation centers — including Michigan Central, funded by Ford and the
state — should play a bigger role in the state’s economy as they
develop, Stevens said. And they will support other industries, he added,
such as the life sciences.
MichAuto also is advocating for Michigan to:
- Prioritize workforce development, including Going PRO, a training
program for which the Legislature recently reduced funding. Other goals
include increasing the number of bachelor’s degrees awarded and creating
a pipeline to replace aging workers
- Improve the state’s business climate through tax and regulatory
changes that make the state more competitive
- Set long-term, sustainable economic development incentives. This has
been controversial, notably after lawmakers in 2025 defunded the $2
billion Strategic Outreach and Attraction Reserve (SOAR) Fund
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Vehicles move along the 2023 Chevrolet Bolt EV and EUV assembly line
at the General Motors Orion Assembly June 15, 2023, in Lake Orion,
Mich. (AP Photo/Carlos Osorio, File)
 - Add support for the industry
transition. MichAuto says that helping companies and workers to
adapt to new technologies, manufacturing processes, and skills will
keep auto jobs in the state
The most recent “State of Automobility ” report from MichAuto
represents a switch from the group’s typical reports, which are
released every 18 months or so, Stevens said, and contain data
updates.
The warnings for the state and its auto industry come amid still
more reports about Michigan’s prosperity slide, including alerts
from the Detroit Regional Chamber that the state needs to sharpen
its education system.
Business Leaders for Michigan in November released the 40-page “
Michigan in a New Era ” roadmap for state success under the next
governor, who will be elected in fall 2026.
While the nation has grown, the report notes, Michigan:
- Ranks 50th in household income growth over the past 25 years
- Shows flat growth in high-wage professional jobs over 20 years,
while they’ve grown 35% nationally
- Fell from 16th to 44th in fourth grade reading over 30 years
- Has one of the highest chronic school absenteeism rates in the
nation
The next administration needs to focus on “changing what’s within
our control … to change our state’s trajectory,” the Business
Leaders for Michigan report said.
Also in November, University of Michigan economists warned that the
state is poised to miss out on expected national job growth in 2026
due to its aging workforce and slim population growth.
When it comes to the auto industry, the report said, 2025’s tariffs
ended up slightly positive for the sector despite fears that they
could prompt job losses.
However, estimates of tariff effects “are highly uncertain both
because tariff policy remains fluid and because it is inherently
difficult to quantify the effects of such a major policy shift,” the
U-M economists note.
So far, the economists expect light vehicle production to increase
2.7% — and prices on new vehicles to increase 6.6%, or about $3,100
per vehicle. According to Anderson Economic Group, a policy analyst
company in East Lansing, the average new vehicle price in November
was $49,814.
At the same time, the Detroit Three’s share of US light vehicle
sales fell from 36.1% in 2023 to 34.2% in 2024. U-M’s economists say
the two-decade market share slide of General Motors, Ford and
Stellantis is expected to reverse in 2026 “as the new (federal)
policy mix takes effect.”
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