Economist: GM investment, recent supplier expansions point state economy in good direction
FLINT, Mich. (WJRT) - General Motors' announcement Tuesday of investing millions of dollars into Michigan’s auto factories and plants over the next few years is a strong sign of a rebounding economy, according to a University of Michigan-Flint economist.
About $150 million is coming to GM’s Michigan plants over the next few years and $32 million of that is coming to GM’s Flint Assembly for product changes down the road.
“When GM makes that type of investment, not only do we benefit from it, but the community also so it’s a huge win for everybody," said Paul Muehlenbeck Jr. of UAW Local 598.
U of M-Flint economics professor Chris Douglas echoed that same thought.
“It’s great for Michigan, because despite everything that’s happened in the auto industry over the last 40 years, auto manufacturing is still a huge component of the Michigan economy,” Douglas said.
Auto manufacturing accounts for 6% to 7% of the state economy to be exact and roughly 1% of the U.S. economy.
Despite the UAW strike about a year ago, the COVID-19 pandemic and all the economic uncertainty surrounding the current state of affairs for the United States, Douglas called GM’s announcement Tuesday a vote of confidence in the state’s economy going forward.
“If you look at consumer spending on durable consumption goods, which autos are durable consumption goods, consumer spending on those is actually higher than what it was before the pandemic hit,” he said.
Meaning demand is up. And with that demand comes jobs. We’ve seen Lear Corporation and Northgate – both which supply to GM hire dozens of workers in recent weeks.
“That’s a good feeling. And it helps out everybody when your trucks are in demand and suppliers have to hire and GM has to hire,” Muehlenbeck Jr. said.
“It’s a great sign that companies are making these types of investments, it’s just surprising that it’s occurred given the severity of the recession we’re in,” Douglas added.
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