Before Silicon Valley, There Was Detroit

There was a time when America’s automakers weren’t just building cars—they were building the middle class.

You could argue that it all started in 1914, when Henry Ford shocked the industrial world by announcing he would pay factory workers $5 a day—twice the going rate at the time. Ford’s logic was radical in its simplicity: if you want to sell cars, your workers need to be able to afford them. This may not have been about generosity. But it was about building an ecosystem where workers were also customers. Other industrialists called him foolish, but Ford built something that became the blueprint for American prosperity in the 20th century.

When I came of age, that blueprint was still in effect. I was a newly minted engineer. My first job after college was as a skilled trades production supervisor at a Michigan-based General Motors factory in the mid-1980s. One of the UAW-represented journeymen who worked for me didn’t have a college degree. He had a wife and two kids he was putting through college. He also owned a second home in northern Michigan (“Up North,” as it’s still called today). He had a girlfriend on the side that he treated to her own Cadillac. I’m not endorsing the behavior—but the economic reality it reveals is remarkable: this was a factory worker whose job provided enough income to fund his chosen lifestyle.

And I was a beneficiary of that same system. I attended General Motors Institute (GMI), a university that GM wholly owned at the time. Between 1981 and 1986, my tuition was modest—subsidized by GM—and every GMI student participated in a cooperative education program. We alternated 12 weeks of classroom learning with 12 weeks of paid work experience at GM facilities around the country. Over five years, we earned both an engineering degree and several years of real-world experience. Upon graduation, GMI students had a leg up. GM paid us while we earned our degrees, and we graduated job-ready.

That era—the height of Detroit’s dominance—wasn’t perfect. But it worked, especially for those who were able to plug into the system. But of course, this was before Silicon Valley was Silicon Valley.

The shift toward technology eventually redefined where innovation—and wealth—was concentrated. But how many non-college-educated workers found their footing in the new economy the way they once could in the auto sector? Silicon Valley has created immense wealth, but it’s largely been for a different kind of worker—often with elite degrees, coding skills, or access to capital. That leaves an open question: has any modern industry stepped in to create opportunity at the scale the auto industry once did?

Often, I‘m frustrated as Detroit automakers are frequently belittled as clunky, slow-moving dinosaurs stuck in the past. Tesla gets praised for bypassing the dealer model entirely, selling directly to consumers. It’s deemed to be business savvy to bypass union structures that Detroit has navigated for a century. Startups tout their “asset-light” models while legacy OEMs are criticized for pension obligations, health care costs, sprawling dealer networks, and decades of plant infrastructure. But here’s the thing: you can’t have legacy costs without having a legacy.

These are companies that helped usher in the Industrial Revolution. Detroit automakers retooled factories overnight to win World War II, producing tanks and planes at a scale no one thought possible. These companies have survived for over 100 years in an economy where most businesses disappear in a fraction of that time.

Take the automotive dealer network, for example—often criticized as outdated and inefficient compared to the sleek direct-sales model. But those dealers are small businesses embedded in their communities. They provide sales, service, repair, parts and logistics jobs. They sponsor local youth sports teams and donate to local and regional causes. Every town with a Chevrolet, Ford, Jeep, or GMC dealership is connected to a broader web of jobs and opportunity. Critics see overhead. Yet, I also see infrastructure that employs hundreds of thousands of people.

Today, it’s the technology sector—not the industrial Midwest—that drives much of the global economy. The companies that dominate market valuations, set cultural trends, and increasingly shape public policy are no longer headquartered in Detroit. They’re in Silicon Valley, Seattle, and Austin.

The combined market capitalization of the “Magnificent 7” tech giants—Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia, and Tesla—dwarfs the total value of every global automaker combined. The tech sector has captured investor imagination, global supply chains, and consumer attention. In contrast, automakers—even the ones pushing forward in EVs—are often viewed as low-margin, capital-intensive laggards.

I’ve been a subscriber to Automotive News for decades. It’s long been the gold standard for keeping up with the auto industry, with deep reporting on product plans, labor issues, regulatory shifts, and dealership trends. But in recent years, I also became a subscriber to The Information, a publication that’s only been around since 2013—but in many ways covers the tech sector the way Automotive News covers autos. That small anecdote reflects a larger shift: even for someone who spent a career immersed in the automotive space, I now follow tech just as closely, because that’s where the power and disruption increasingly reside.

So here we are, at a crossroads. Technology companies are shaping the future, but legacy automakers built the foundation. As investors continues to reward scale, AI, software, and speed, we shouldn’t forget the quiet power of stability, infrastructure, and community.

Detroit may not be the engine of the modern economy, but it once was the engine of the American Dream. And for many people, the automotive sector still is this same American Dream engine.