Why Windsor deindustrialized differently than Detroit

Abstract

ABSTRACT This paper examines the divergent trajectories of automotive investment and employment in Detroit, Michigan and Windsor, Ontario. Located on opposite shores of the Detroit River, in the United States and Canada respectively, Detroit and Windsor are the founding cities of the North American auto industry. Long dominated by the Big Three, their factories have produced vehicles for the same continental market since 1965. Each has weathered parallel challenges since then, including spikes in the price of oil, the Big Three’s loss of market share, the transition to lean production, and the near-collapses of Chrysler and GM. Yet Detroit began deindustrializing decades earlier and lost much more employment than Windsor. To determine why, we compared their automotive sectors from 1900 to the 2010s. Since the Depression, each city has repeatedly confronted the prospect of deindustrialization, but three factors have made Windsor more resilient: (1) federal and provincial interventions on its behalf, (2) Windsor’s greater competitiveness with respect to factor costs, quality, and innovation, and (3) Windsor’s annexation of outlying territory to capture new factories. These differences show how national, subnational, and regional/local policies have mediated corporate decision-making to produce a variegated North American Rust Belt, with Canada outperforming the United States.