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Stimulus Comes None Too Soon for Strapped Hoosiers

August 5, 2009 by · Leave a Comment 

President  Obama returns to Elkhart County, Ind., today (Aug. 5) at a moment when the county — so hammered by recession that Obama made it a symbol of the need for his stimulus plan — is finally getting some good news, according to Bloomberg.com.

Obama will announce Energy Department grants for electric-car development during a speech at a Monaco RV factory in Wakarusa, about 10 miles south of Elkhart.

That will follow Tuesday’s announcement by Sweden’s Dometic International AB that it plans to hire 241 people to make refrigerators for recreational vehicles in Elkhart, a city of 53,000 about 100 miles east of Chicago.

“There are signs that it is getting better,” said Wakarusa Town Manager Tom Roeder, 61.

Preparing for the president’s second appearance in six months, Elkhart County, with almost 200,000 residents, has become a symbol of Obama’s assurances that the economy, still facing tough challenges, is beginning to improve.

At the same time, indications that the economy in northern Indiana is coming out of its free fall are tentative, and balanced by signs that many people are still struggling.

Unemployment in the Elkhart-Goshen metropolitan area rocketed to 18.9% in March from 4.8% at the end of 2007. The jobless rate has eased for three straight months to 16.8% in June. Manufacturing employment, which hit an 18- year low of 44,900 jobs in March, inched up to 45,300 in June.

“Retail merchants tell me spending is up, there’s some slight improvement in housing starts and a few more vehicles are selling,” said Elkhart Mayor Dick Moore, 75, a Democrat who shared a stage with Obama on Feb. 9 when the president came to promote the stimulus.

Housing Market ‘Awful’

Still, in the automotive and housing industries, the economy around Elkhart hasn’t provided many encouraging signs.

The Elkhart area, which calls itself the RV capital of the U.S., lost more than 15,000 jobs in the past year as sales slumped at local RV and manufactured-housing companies.

“The housing markets are still just awful,” said Rick Lavers, president and CEO of Coachmen Industries Inc., which makes modular homes and sold its RV business last year to Forest River Inc. and Warren Buffett’s Berkshire Hathaway Inc.

Housing won’t recover until banks are more willing to make loans, Lavers said. “The cash has to get moving in this economy,” he said.

Since April 9, Coachmen’s shares have jumped to $1.32 from 25 cents.

Job Worries

Robert Wilson, president and chief operating officer of Supreme Industries Inc., a maker of specialized truck bodies and shuttle buses in nearby Goshen, said demand for trucks isn’t picking up yet.

“People are still worried about their employment, whether they’re going to find a job or keep their job,” Wilson said. “Until that changes, I don’t see the truck business getting any better.”

Obama is traveling to Indiana two days before the scheduled Aug. 7 release of unemployment figures for July. The national unemployment rate is projected to rise to 9.6%, according to the median estimate of economists surveyed by Bloomberg, from a 26-year high of 9.5%in June.

Touching Bottom

Other measures suggest the national economy may be touching bottom. Gross domestic product shrank at a 1% annual rate from April through June, after contracting at a 6.4% annual pace in the first quarter. The Standard & Poor’s 500 Index has risen almost 25% since Obama took office.

The Obama administration has prodded manufacturers to develop more efficient vehicles through a $2.4 billion grant program for development of batteries and related technologies that was included in the $787 billion economic stimulus legislation.

In addition to Obama’s trip, Vice President Joe Biden and Energy Secretary Steven Chu will travel today for events at other battery-technology developers in Detroit and Charlotte, N.C.

The factory where Obama will speak, formerly operated by bankrupt recreational-vehicle manufacturer Monaco Coach Corp., was purchased by Navistar in June. 

Electric Vehicles

Wakarusa-based Electric Motors Corp. will use a plant for a partnership with Nappanee, Indiana-based Gulf Stream Coach Inc. to develop an electric vehicle, Electric Motors CEO Wil Cashen said.

The company has applied for stimulus funds and would be “ecstatic” to get federal help, Cashen said.

If a local company gets an energy grant it “could be huge for our town,” said Wakarusa Chamber of Commerce President Nadine Lengacher, who owns J&N Stone, a family-run stone-veneer manufacturing company.

In Elkhart, projects funded by the stimulus, including sewer improvements and a $4.2 million airport-paving project, may have saved or created between 400 and 500 jobs, Moore said.

“We can see a light at the end of the tunnel,” said Bill Stevens, 41, vice president of Brooks Construction Co., of Fort Wayne, Ind., which rehired about 10 or 15 laid-off employees to work on a $10 million stimulus-funded construction contract on part of U.S. Highway 33 in Elkhart County. “It’s a matter of riding out the storm.”

While Lengacher sees some signs of recovery, she credits the “determination of the people who live in this county” and not Obama’s economic-recovery plan. “It’s a community that’s not one to sit back and cry because things are so bad.”

Counseling Patience

In Wakarusa today, Obama will counsel patience, said chief spokesman Robert Gibbs.

“It is going to take some time to move our economy from where we are, to get our economy back on track,” Gibbs said Tuesday. “The president will not be satisfied until we’re creating jobs.”

Coachmen CEO Lavers said many of his neighbors are getting tired of waiting.

“We’re eight months into 2009 and there’s no real perceptible turn on Main Street,” Lavers said. “I think people’s patience is about done.”

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