The auto industry flourished in Michigan for a number of reasons, but one of the simplest explanations is that key innovators just happened to live there: Henry Ford was born on a farm in nearby Greenfield Township, and Ransom Olds settled in Lansing from 1889. These two would go on to be two of the most important pioneers in the industry by the turn of the 20th century.
Detroit’s well-connected position between the east coast and Chicago and abundant natural resources made it a good location for manufacturing. With that in place, Ford and Olds had everything they needed to set up their businesses close to home.
Perhaps another big reason for the boom was Olds’s decision to outsource the manufacturing of parts for his Oldsmobile, which meant a wide range of companies and individuals were exposed to the growing industry and developed their own skills and knowledge. Notable suppliers include Henry Leland, who supplied engines to Olds and went on to found Cadillac and Lincoln; Benjamin Briscoe, who later helped to launch Buick; and the Dodge Brothers, who were also initial investors in Ford before starting their own company in 1915.
Olds’s invention of the assembly line and Ford’s creation of the first conveyor belt-based assembly line in 1913 enabled mass production on a scale other cities couldn’t match, and the money generated by this innovation was invested heavily in research and development, enabling the whole city to pull ahead of its rivals. Detroit became the best place to start a car company because of a skilled workforce, an established supply chain, and a large customer base. Once the industry began to flourish with multiple auto companies, specialists moved to the area from other cities, strengthening Detroit’s businesses and weakening rival cities at the same time.
By 1924, the three biggest car companies that dominated the field—General Motors, Ford, and Chrysler—were all based in the Detroit area. By 1950, the auto industry had 296,000 manufacturing jobs in Detroit, and the name Motor City was in wide use, furthered by the popularity of Motown Records in the 1960s.
With the big three still headquartered in Metro Detroit today, it seems Detroit will go on being the Motor City for the foreseeable future.