He keeps coming back to northern Indiana, as if magnetically drawn to some ore of truth there.
For the fourth time in 15 months, President Obama will arrive in this blue-collar manufacturing area –this time the town of Wakarusa — to sample the mood of the heartland and bring a message of change. He returns today (Aug. 5) to a community that has been as hard hit as any in this recession, according to the Los Angeles Times.
“Each time he comes here, I keep thinking things must get better,” said Rosalie Collins, 43, an unemployed recreational vehicle worker, as she waited in line at a local unemployment office.
Elkhart encapsulates a key part of the country’s industrial downturn. Unlike the great Midwestern auto towns that are locked with a single industry, the region occupies a slice of industrial America that encompasses a range of manufacturers from musical instruments to high-tech engines.
It is a place that Obama has also found attractive. Elkhart, locals say, is in a traditionally conservative region that has shown a willingness to tilt Democratic. The county backed Sen. John McCain in the last presidential election, but the state went to Obama.
The visit fits a pattern of high-level White House trips to states that are historic presidential battlegrounds. Obama is looking to hold the state in 2012 – and so Indiana is receiving a disproportionate share of his travel time.
Salvation won’t come soon enough for the nearly 16,000 people in a county of less than 200,000 who currently don’t have a job. More than 45% of the businesses in the area are in manufacturing, and one-quarter of those are tied to the RV industry. More than a dozen factories have shut down in the past 12 months.
People here say they have begun to see a slight turn in their world, small improvements and some hiring that hint that the worst may be over. But after so many months of grim news, they are still worried.
“We’ve all been scraping the bottom, and there’s not much left to scrape,” said Loren Begly Sr., 78, a retired truck driver whose six children have all had trouble either finding or keeping full-time work.
Since the late 1800s, when shops building medical products and brass machine fittings crowded along the rail line, the area’s backbone has been its diverse industries.
The region has grown accustomed to economic roller coasters.
It survived after many jobs making musical instruments were moved overseas. It bounced back after gas prices eased and interest in RVs resumed in the 1980s.
It recovered after the Miles Laboratories plant, where Alka-Seltzer and Flintstone vitamins were made, closed its doors in 2001.
“It’s a national icon for economic cyclicality,” said Ken Rosen, chair of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, Haas School of Business.
The latest cycle is about the worst it has ever been.
No one here could have imagined such hardship was coming when then-Sen. Barack Obama first stopped here in early May of last year in his campaign for the presidency.
When Obama returned that August, he was leading in the polls, and factories across this northern stretch of Indiana were shedding jobs. People were so eager to hear what Obama had to say, they arrived 12 hours early to wait outside of Concord High School.
When Obama came for a third stop in February, he came as a president trying to put a human face on why the country needed to support his $787 billion stimulus package.
Collins had lost her job by then and was scared. Gas prices had soared. Credit had dried up. Unemployment in the city of Elkhart had skyrocketed to 18 percent.
In the months since, the area has poured its resources into searching for the next manufacturer to bring new jobs.
The area has banked on help from the president’s stimulus plan. The county has attracted its share — $38 million approved so far. Of that, the city of Elkhart has had $14 million approved.
Now, there are hints of recovery. Seven area manufacturing companies, ranging from auto-insulation parts and an office-chair maker to RV manufacturers, have announced plans to expand.
On Tuesday, Dometic Corp. said it would put more than 240 people back to work in Elkhart, when it moves a manufacturing here from a factory in Sweden.
Obama is scheduled to speak today at the shuttered Monaco RV plant in Wakarusa.
He will use the trip to announce grants for advanced battery and electric-vehicle production, according to the White House. He’ll also talk about what’s needed to build conditions for sustained growth.
Indiana Gov. Mitch Daniels is scheduled to visit Elkhart, Ind., on Tuesday to announce the state’s role in helping to create 241 jobs at a new Dometic Corp. operation moving there this summer.
The Republican governor’s visit comes one day before President Obama is scheduled to visit the area. The nature of his visit has yet to be completely revealed.
Daniels will be speaking at 9 a.m. at the Dometic campus on the city’s east side.
Tonight, the Elkhart City Council is expected to approve a 10-year tax abatement program to facilitate moving Dometic’s refrigerator plant operation from Sweden to Elkhart, setting the stage for Daniels’ visit.
A state grant will pay 50% of Dometic’s employee training costs over two years — up to $170,000, according to a letter from the Indiana Economic Development Corp. to the company. Dometic also will receive $500,000 in tax credits over seven years for creating the new jobs.
Midwest news media looking at recent developments in the RV industry in Indiana are again finding something positive to talk about.
Following announcements that Fleetwood RV Inc. has begun to rehire workers for its motorized RV plant in Decatur, Ind., and that Dometic Corp. is planning to move production of RV refridgerators from Sweden to Elkhart, creating 241 new jobs there, the print and broadcast media jumped on the good news.
The Indianapolis Star stated that “Plans by two RV companies to hire additional workers could breathe life back into the slumping Northern Indiana RV industry, hammered by low sales and thousands of layoffs.”
The Star quoted Kevin Broom, a spokesman for the Recreation Vehicle Industry Association (RVIA), stating, “What we’re hoping is that this is a sign of a turnaround.”
Indiana factories make about 70% of the RVs made in the U.S. More than half are made in Elkhart County.
Statewide, about 60,000 Hoosiers worked in the RV industry at its peak in 2006, when the industry generated more than $65 million in state tax payments.
The announcements were good news for workers in Elkhart County, which has one of the highest unemployment rates in the nation, and Decatur, about 20 miles south of Fort Wayne.
“I think our area has been hungry for jobs for a while,” said Kyle Hannon, vice president of public policy for the Greater Elkhart Chamber of Commerce.
Dometic will receive a tax break as an incentive from Elkhart and the state of Indiana to invest in the area.
“I’m very optimistic about (Dometic’s) future and about the future of our area,” said Elkhart Mayor Dick Moore.
According to the RVIA, 25,000 jobs have been lost in the RV industry nationwide since its decline over the last pew years. But Broom says he has seen an uptick in hiring in the past few months
Fleetwood RV Inc. has already received 1,500 applications since posting the 650 openings last week. The company expects to fill the positions starting next week.
“This work force historically has been one of Fleetwood’s best work forces,” said Fleetwood’s John Draheim. “The support from the community has been very overwhelming.”
South Bend-based Fox 28 News said the Dometic announcement “brings with it hope that Michiana’s RV industry, once left for dead, has some life in it yet.”
The station quoted Hannon from the Elkhart chamber, saying, “You start to hear different things from the industry like we are busy. But this is the first time it’s more of an announcement that a supplier says yes, we are hiring.”
He said the fact that Elkhart has hundreds of qualified workers just waiting for a job is very attractive to companies in the industry.
“That’s the silver lining of the unfortunate cloud of layoffs. We do have a lot of skilled workers that are ready to go,” said Hannon.
While some are confident the industry is making a comeback, others aren’t so sure.
“We’ve got a lot of work to do. It’s not just bringing companies into Elkhart, you’ve got to have credit loosened up,” said Chris Huffer, who works in the RV industry. Huffer owns Midwest RV Connection and knows what it takes to run a business. He says nothing will happen until banks start lending again and the cost of gas keeps going down. However, he is hopeful.
“Do I think it will be back to where it was? Well, it’s a start, but we’ve got a lot of work to do,” said Huffer.
The Fort Wayne News Sentinel, noting that the rebirth of Fleetwood in Decatur, quoted community leaders in Decatur who suggested even more jobs could be resurrected.
Larry Macklin, executive director of the Adams County Economic Development Corp., said he couldn’t say how many jobs would be filled eventually as a result of the purchase of Fleetwood.
“Those numbers you’re seeing don’t include Gold Shield, and Gold Shield was part of the spinoff, too,” Macklin said.
Gold Shield Fiberglass makes components for a wide range of companies, including heavy-truck makers, medical-device manufacturers and bus builders. But a mainstay for Gold Shield is molded RV parts.
Macklin said bringing more workers back to Fleetwood would help smaller suppliers in Adams County, too, such as cabinet-makers that outfit RV interiors and a wiring-harness manufacturer.
Macklin said the recession may actually help Fleetwood in the long run, because weaker RV builders may be thinned out of the market entirely.
“Fleetwood survived because it’s the best. It’s the Cadillac of RVs,” he said.
The Northeast Indiana Regional Partnership and Indiana Economic Development Corp. helped persuade American Industrial Partners (AIP) to consolidate Fleetwood operations in Decatur, making Decatur the headquarters of the new company. He expects the state to announce more details of its incentives for AIP soon.
Decatur Mayor John Shultz said the Decatur City Council was scheduled to consider abatements Tuesday night to aid the reshaped Fleetwood, too. The abatements would be applied only to equipment valued at $14 million-$15 million, which is likely to be moved here as production is consolidated.
The Fleetwood plant drew most of its employees from a 35-mile radius in northeast Indiana and northwest Ohio, Macklin said. He said that despite the excitement of the return of Fleetwood jobs, people need to be patient.
“This isn’t going to happen overnight. It’s going to take a few weeks,” he said.
The biggest economic development announcement to hit the city of Elkhart, Ind., since the recession began quietly slipped in the back door Monday night (July 20) at a meeting of the Elkhart City Council.
There, it was revealed that Dometic Corp. was moving production of an RV refrigerator from Sweden to Elkhart later this year, bringing with it 241 new jobs.
“We’re happy it’s Elkhart. We’re happy it’s America,” said Douglas Whyte, Dometic president, in an interview the next day with RVBusiness.
The plant could have been relocated to China or Mexico but is coming to Elkhart because of Whyte and his management team, who see real advantages in moving the plant to within 50 miles of 70% of Dometic’s customers.
Also credit the city of Elkhart, which is providing hefty tax abatements or phase-ins, and the state of Indiana, which is provided unspecified training grants.
The Dometic operation will move into a 150,000-square-foot warehouse on the Dometic campus in Elkhart and feature a combination of manual and robotic equipment that is being moved from Sweden. Whyte said some $5 million to $7 million in equipment will be located to Elkhart from Sweden over the next three to five years, and an additional $3 million to $5 million in facility improvements will be made to retrofit the warehouse for the new production.
The Elkhart Truth front page story on Tuesday (albeit secondary to the appearance of Miss America at the Elkhart County 4-H Fair the day before) was the first official word on the new jobs.
Dometic already has a presence in Elkhart, namely about 60 employees working in warehousing, customer service and human resources.
Whyte deferred further comment on the nature of the product and its manufacture and any sales projections until after the Elkhart City Council casts its final vote Aug. 3 on the 10-year, property tax phase-in. But suffice to say the operation will be high tech and require some skilled workers up and down the production line.
Dometic will sponsor a job fair in September to begin the hiring and training with production beginning in November, Whyte said.
The average blue collar worker wage will be $11.70. But high-paying new jobs will be created, from welding to engineering, production management and assembly.
Whyte hopes to tap the local labor supply and should have no problems, what with the community’s jobless nearing 20%. “My preference will be to pull these people from this area,” he said.
Whyte, who appeared at Monday’s city council meeting, said the incentives Elkhart offered “made a compelling story for why Elkhart.”
“The mayor and the state’s representatives were absolutely fantastic to work with in helping us through the process, and in negotiations everybody was professional. It was a nice business arrangement so it meant a lot of sense to us,” he said.
The company plans to invest $500,000 in real property improvements, as well as $9 million to $12 million in personal property investments including the new equipment, according to city documents.
Through the phase-in, Dometic will save about $66,000 in real property taxes and $689,680 in personal property taxes. The company would pay $102,000 in real property taxes and $787,580 in personal property taxes over the life of the abatement,according to The Truth.
City officials estimate the jobs created will produce about $675,000 in local income taxes over the 10-year period. Dometic expects to retain about 12 full-time jobs in addition to the 241 new positions.
The company makes refrigerators, awnings, air conditioners and other products for the recreational vehicle and marine industries. Dometic Group’s international headquarters is in Solna, Sweden.
RVBusiness Publisher Sherman Goldenberg sat down recently with Doug Whyte, president of Dometic Corp., and Brad Sargent, vice president of marketing, to discuss how the company was able to continue to supply product to the RV industry after a fire on April 7 destroyed a major Dometic manufacturing facility in Juarez, Mexico.
Watch that 4-minute interview on this website.
The fire that destroyed the Dometic Corp. plant in Juarez, Mexico, late Tuesday (April 7) and three adjoining factories in a 900,000-square-foot complex has threatened the future of 1,000 workers, according to the El Paso (Texas) Times.
The Dometic plant produced components for awnings and air conditioners.
In an e-mail to Dometic customers, Dometic Group President J. Douglas Whyte said he does not have a timeline when the factory will be operatioinal again.
“We are fortunate that Dometic is strategically positioned with 28 factories throughout the world to ensure that we are not reliant on a single source for our products,” he stated.
“Also, due to the current economic conditions impact the industry, we have under utilization in some of these factories. This provides Dometic with immediately identifiable alternative sources for products currently manufactured in Juarez.”
Whyte does not anticipate any service delivery or disruptions, but said the company is evaluating every customer on a case-by-case basis
Juarez firefighters battled the fire for more than eight hours Tuesday and contained it about 11 p.m. They worked through the rubble Wednesday to clear hot spots that could ignite small fires, said firefighter Jesus Hernandez.
A city spokesman said officials were brainstorming to keep workers from the companies employed.
The 40-year-old building, originally built for Zenith, is across from the Abraham González International Airport, which was closed Tuesday because of the fire’s heavy smoke.
“Our understanding is because building had no sprinkler system, there was no way to fight the fire,” said Mike White, a real estate broker who handled the sale of the building in 2003. Juarez has no fire code requiring sprinkler systems, he said. However, most new developments have sprinkler systems installed by the developer or tenant, he said.
Fire has destroyed a Dometic Corp. plant in Juarez, Mexico, that produced component parts for RV awnings and air conditioners for its U.S. customers.
Brad Sargent, Dometic’s vice president of marketing, told RVBusiness that the fire started in an adjacent facility on Tuesday and spread to the Dometic plant.
He said he learned of the fire ” through an e-mail from the company president less than an hour ago” but had few details.
“They are assessing the situation right now,” he said.
He understands that the building was a total loss, there were no injuries and workers were able to save some finished goods from the flames.
Products built at the plant were shipped to Dometic facilities in Elkhart and LaGrange, Ind., and distributed from there.
“We’ve got 22 other factories thorughout the world,” Sargent said. “I don’t see a supply interruption at all to other customers. We are assessing that too. We have inventory available.”
Juarez has a population of 1.5 million and is located on the Rio Grande River across from El Paso, Texas.