The slogan was displayed at the entrance to several concentration camps by the Nazis. The most famous example was over the main gate at the Auschwitz I camp in Poland.
The sign with red capital letters on a white background appears to have been copied from Auschwitz, the Detroit Free Press reported Tuesday. The B has an upper loop larger than the lower one as the Auschwitz sign does.
The sign was hung from an overpass next to the empty factory.
David Schulman of Huntington Woods told the newspaper he first noticed the sign last week and found it "disturbing." Schulman had relatives killed in the Holocaust.
"It's a form of hate speech," Schulman said. "It really appalled me."
The Packard Motor Co. produced one of the most famous U.S. luxury cars of the early 20th century. But Studebaker, which then owned the name, stopped producing Packards in 1958.
The factory is in limbo because of a legal battle over its ownership and demolition. John Bologna, a lawyer for Dominic Cristini, who says he owns the plant, said the sign would be removed or covered up.
No one has taken credit for the sign. In recent years, artists have used some of Detroit's many abandoned buildings in their work.