Rising auto sales could rescue Michigan, Big Three

Michigan's economy still rises and falls with the Big Three because the auto industry is such a dominant employer. It accounted for 20 percent of the state's workforce in 2008 (the latest year data are available), says Sean McAlinden, chief economist for the Center of Automotive Research in Ann Arbor, Mich.

Here's the math: Every job at GM, Ford, or Chrysler supports three jobs elsewhere in the state, whether at a parts supplier or at the diner across the street from the plant.

Still, that dependency is shrinking. The Big Three employ about 98,000 people in Michigan, a far cry from the 460,000 who worked for them in 1979, their top production year.

"We're not going to get even a fraction of that back. It's too global of an industry," Mr. McAlinden says.

Whether Big Three auto sales will continue their upward trend is debatable. For one, the US government's "Cash for Clunkers" stimulus program for the auto industry has ended. For another, Toyota is moving aggressively to recoup lost market share, offering attractive financing to new-car buyers. Sales figures for March, expected April 2, will tell more.

In this region, the shining hope is Ford. The only domestic automaker not to take bailout money, Ford closed 2009 with a $2.7 billion profit, its first in four years. It is receiving accolades for the quality of vehicles like the Taurus SHO and the Fusion Hybrid, which won the 2010 North American Car of the Year in January at the Detroit auto show.

Ford is wary of making too much of its recent success, says Mr. Eisenstein, even though it is "the strongest of the Detroit makers with the biggest level of momentum." It knows that "just like a runner at an Olympics, it only takes one quick stumble to knock you out of the race."

January and February sales of almost 1.5 million vehicles, while better, nonetheless pale in comparison with the 2.3 million vehicles sold during those months in prerecession 2007. Few expect sales to hit that level again anytime soon.

"Automakers are currently pushing to be able to not just survive, but thrive at numbers that even three, four, five years ago would have seemed like unmitigated dis­aster," says Eisenstein. "Now they're looking at those sales numbers and saying, 'We could have a pretty good business at this point.' "

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