How Midwestern States Are Powering America’s Automotive Supply Chain

When supply chain disruptions rocked the automotive industry over the past few years, one region stood resilient: America’s heartland. The Midwest has quietly become the backbone of the nation’s automotive supply chain, proving that geography, skilled labor, and industrial heritage still matter in our globalized economy.

Automotive Manufacturing Powerhouse

The midwest has the highest concentration of automotive companies, with more than 950 auto manufacturing plants in Michigan alone. But this isn’t just about Michigan. Ohio ranks #1 in production of engines and #2 in transmission production. Over 1.1 million cars and light trucks were produced in 2018, the 4th most of any state in the nation.

Indiana has emerged as a particular standout. Indiana is the No. 2 state in the U.S. for automotive production and produces 1.3 million trucks and cars each year, with a total manufacturing output of approximately $102 billion. The state hosts everything from major suppliers like Toyota’s body parts manufacturer Futaba Indiana of America to specialized companies like Jasper Engines & Transmissions, which remanufactures engines and transmissions for automotive, marine, and industrial applications.

Strategic Location Advantage

Geography is destiny in logistics, and the Midwest sits at the perfect crossroads. Indianapolis offers a 48 hour shipping window to over 65% of the United States, thus increasing efficiency and lowering transportation costs. This central positioning allows manufacturers to serve both coasts efficiently while keeping inventory and shipping costs manageable.

Such transportation activities have long been more important to the Midwest economy. The movement of materials, parts, products, and finished goods is as much a part of its commerce as farming and manufacturing. The region’s multimodal transportation network—combining rail, trucking, inland waterways, and air freight—creates the redundancy that coastal ports often lack.

Skilled Automotive Workforce Legacy

The Midwest’s automotive strength runs deeper than location. Michigan has a highly skilled labor force with tons of expertise in automotive manufacturing. According to the U.S. Bureau of Labor Statistics (BLS), the state employs over 175,000 workers in the motor vehicle manufacturing sector.

This isn’t just about current workers. With more than 200,000 top-tier university graduates within 200 miles and the FWCS Career Academy in Northeast Indiana (including 17 high schools with career and technical programs), businesses in the region have no shortage of options when sourcing talent. These educational partnerships ensure a steady pipeline of workers trained specifically for automotive manufacturing.

Complete Automotive Supply Chain Ecosystem

What makes the Midwest truly powerful isn’t just the big assembly plants—it’s the intricate web of suppliers surrounding them. Ten Midwestern states account for almost two-fifths of nationwide transportation equipment employment, and transportation equipment (NAICS 336) is a core part of Midwest manufacturing, with nearly a fourth of the region’s durable goods manufacturing employment.

The automotive manufacturing infrastructure in Northeast Indiana is unbeatable with 21 Tier 1 suppliers offering diverse product lines. This clustering creates what economists call agglomeration effects—cost savings that come from having related businesses close together. When Ford needs a specific part, chances are good there’s a supplier within a day’s drive.

The diversity is striking. Indiana alone hosts companies making everything from trailer axles (Dexter Axle Company) to automotive paint supplies (FinishMaster) to precision metal stampings (Small Parts, Inc.). This variety creates resilience—if one supplier faces problems, alternatives are usually nearby.

Economic Muscle

The numbers tell the story of the Midwest’s automotive impact. This includes $68.3 billion in the South, $42.1 billion in the Midwest, $13.3 billion in the West and $0.3 billion in the Northeast. The Midwest’s $42.1 billion contribution makes it the second-largest regional concentration of automotive economic activity.

Each job for an auto manufacturer in the United States creates 10 other positions in industries across the economy. This multiplier effect means automotive employment supports everything from steel mills to trucking companies throughout the region.

Adapting to Change

The industry is transforming rapidly, with electric vehicles and new technologies reshaping manufacturing. Many suppliers are preparing for moderate growth, driven by increased demand for electric vehicles and related technologies. Midwestern suppliers are investing in new capabilities while leveraging their existing manufacturing expertise.

Companies are also embracing digitalization. Improved efficiency, productivity, and cost reduction have been identified as important benefits achieved through generative AI implementation. This technological adoption helps regional suppliers stay competitive globally.

Automotive Supply Chain Resilience

Recent disruptions highlighted the Midwest’s strategic value. Having a stockpile of goods inland and away from the consistent logistics hot spots year-round could minimize disruption of last-mile delivery to retail outlets or individual consumers. The Midwest is open for business with opportunities that are not available on the coasts.

When coastal ports faced congestion and labor shortages, inland logistics networks kept moving. The region’s transportation diversity—from Great Lakes shipping to interstate trucking—provided alternatives that coastal areas couldn’t match.

Looking Ahead

As automotive supply chains continue evolving, the Midwest’s combination of manufacturing expertise, strategic location, and skilled workforce positions it to remain central to America’s automotive future. The continued push towards electric mobility, connected vehicles, and autonomous driving technologies offers significant growth prospects, even as the market for used vehicles remains hot.

The story of America’s automotive supply chain increasingly runs through the heartland—from Michigan’s assembly lines to Indiana’s component manufacturers to Ohio’s engine plants. In an uncertain world, the Midwest’s automotive ecosystem provides the stability, flexibility, and expertise that keeps America’s vehicles rolling.