Economist: GM plant closures wont impact economy as bad as in the past

Posted at 10:38 PM, Nov 26, 2018
and last updated 2018-11-27 12:10:17-05

On Monday, General Motors announced plans to close down two plants in the Detroit area, leaving people living in the area concerned about what it will do to Detroit’s economy. 

“Is there another way they can do it besides closing all these plants? A lot of people will be out of work,” said Carla Brown who lives in Detroit. 

Despite the growing concern, local economist David Sowerby says the news may not provide the same blow to Michigan and Detroit’s economy than in the past. 

“We will have a bruise but we won’t break a leg this time around when we have these announced plant closings,” Sowerby said. 

He points out that Michigan’s unemployment is currently at 3.9 percent, compared to 14 percent in 2009.

Sowerby also points to The Tax Foundation’s numbers on taxation and business climate. In 2009, Michigan was ranked 29th out of 50 states, but jumped to the 13th spot in 2018. 

“While Detroit and Michigan won’t be immune to some of the fall out of this my strong belief is we are in a much better position to deal with this type of adversity than any time in the last thirty years,” Sowerby said. 

He says it will be easier for people to find jobs in this economy and says the blow will lessen for businesses depending on the plants. 

Even with Sowerby’s predictions, some are still skeptical. 

“Closing is closing and people losing jobs," Brown said. "It’s still no. I don’t think that doesn’t give me hope at all,” Brown said.