Michigan’s auto industry boondoggle: billions in subsidies, 287,000 jobs lost

Michigan taxpayers have dumped billions of dollars into the automotive industry for nearly 30 years but the state has lost 287,300 manufacturing jobs over that time.

Michigan’s manufacturing workforce dropped from 881,900 jobs in December 1999 to 594,600 jobs as of January 2025, according to data from the Federal Reserve.

St. Louis Federal Reserve

The Michiganders who lost manufacturing jobs over those 25 years could fill the University of Michigan’s Big House (107,601) twice over, with a Ford Field (65,000) to spare, according to John Mozena, who has worked at two of the Big Three automakers as well as at auto suppliers.

“[The auto industry] is highly cyclical and subject to giant macroeconomic factors that play a role in how balance sheets look at the end of any given year,” Mozena told Michigan Capitol Confidential in a phone interview. Now, he’s the president of the Center for Economic Accountability, a nonprofit organization that promotes the reform of economic development programs. 

Some automakers crashed during the 2007-09 recession, an “absolutely groundshaking” event for the auto industry when General Motors filed for bankruptcy, Saab was sold, and Oldsmobile disappeared, Mozena said.

“It was the result not of the fault of the auto industry, but Wall Street and the housing market screwing up people’s abilities to finance a car,” Mozena said.

Michigan’s economy is exposed to the auto industry because of Metro Detroit’s environment — the factories, engineers, and car culture, Mozena said.

“When you are overexposed to any one set of risks in your investment portfolio, the answer isn’t to double down and invest more into those, but rather diversify to try to hedge your risks so that you’re not so dependent on that one industry for the future,” Mozena said.

Michigan’s mobility jobs are disappearing, Mozena said, pointing out how GM has shifted from a full building in Detroit to a few towers in the Renaissance Center to a few floors at the Hudson building.

“Fewer and fewer people are needed at all levels to make cars, design, and manufacture cars and trucks,” Mozena said. “And that’s great from the perspective of the automakers, but not great if you’re trying to bet your economy on those workers living in your state.”

For example, Michigan taxpayers promised $1.7 billion to an electric vehicle plant in Marshall before it cut $1 billion of planned spending and 800 planned jobs.

Questionable forecasts drive these boondoggle projections of auto factories that garner billions of dollars from taxpayers, Mozena said, adding that either the government nor automakers can predict the future.

“The degree to which the MEDC is trying to claim the ability to predict and influence the broad economic cycles of the auto industry is unrealistic at best and fraudulent at worst,” Mozena said.

The primary recipient of corporate welfare is the auto industry, James Hohman, the director of Fiscal Policy at the Mackinac Center for Public Policy, told CapCon in an email.

“Lawmakers do not write big checks to big firms to increase their productivity,” Hohman wrote. “They write them because the companies and their lobbyists ask for money. People ought to be more skeptical when their elected representatives hand out their money to private companies.”

The industry has $21.5 billion in corporate welfare authorized since 2000, Hohman said.