Members of the Elkhart County Council Saturday (Aug. 11) approved two tax phase-in agreements for Elkhart, Ind.-based Forest River Inc. that promise to bring as many as 160 new jobs to the area.
According to the Goshen News, a tax phase-in is a partial or temporary exemption of a company from having to pay property taxes with the express purpose of stimulating economic development.
First to be approved Saturday was a resolution supporting an eight-year tax phase-in agreement involving Forest River’s Millersburg complex. Dave Ogle, director of business retention and expansion for the Economic Development Corp. of Elkhart County, helped present the proposal for Forest River.
“I always want to reiterate our appreciation of Forest River being one of our premiere employers in the marketplace, employing well in excess of 3,000 Indiana or Elkhart County employees at their facilities, and certainly one of the higher paying facilities in the county,” Ogle said. “So we appreciate the opportunity to compete for their business.”
According to county attorney Craig Buche, the Millersburg expansion promises approximately $2 million in real estate redevelopment coupled with approximately $150,000 in new manufacturing equipment.
In addition, the company has indicated plans to hire approximately 120 new full-time positions. Such hiring is expected to lead to an annual increase in payroll of nearly $5.5 million.
“We recognize the fact that Forest River could build their plants anywhere,” said Elkhart County Council President John Letherman following the phase-in approval. “We’re thankful that you’re choosing to make significant investments in Elkhart County, which further cement Forest River in the community.”
In order to qualify for the tax phase-in agreement, Forest River has agreed to stay in operation at its Millersburg location for no less than 10 years. Should the company fail to meet its obligations under the phase-in agreement, Forest River would be forced to repay the county a prorated portion of the total real estate and personal property taxes saved as a result of the tax phase-in agreement.
The Goshen News reported that also approved Saturday was a resolution supporting a five-year tax phase-in for Forest River’s Middlebury complex that should bring 40 new full-time positions to the area.
In connection with this expansion, the company has indicated plans to invest approximately $1.25 million in new manufacturing equipment.
As for the 40 new full-time positions expected, Buche indicated that an annual increase in payroll of nearly $1.8 million can be expected.
As part of its tax phase-in agreement, Forest River has agreed that it will stay in operation for no less than seven years at its Middlebury location or face forfeiture of the agreement.
Editor’s Note: The following is an excerpt from an article in the Goshen News assessing the growing number of jobs in Indiana’s Elkhart County and the search by businesses to fill the positions. To read the entire story click here.
Elkhart County manufacturers have hundreds of job openings. Now they need the workers to fill them.
As the economy continues to inch upward and consumer spending rises, demand for products of all kinds is spurring a need for more workers.
“We have positions that have opened up. We need commercial sewing operators and we need people to do assembly and upholstering,” said Steve Yoder, vice president for human resources at Wieland Designs in Goshen.
The company manufactures seat covers for the airline, automobile and furniture industries.
To attract workers to the plant, Wieland partnered with the worker recruiting company Specialty Staffing Solutions to hold a job fair Saturday (June 23) morning.
“Right now we could use 10 to 15 sewing operators and seven to eight assembly and upholstery people,” Yoder said Friday before the fair.
For those workers who have some sewing training and possess a desire to learn, it takes the Wieland staff six to 10 months of training to get the new hire’s skill level up to an acceptable level, according to Yoder.
“When you are making a high-end seat cover for a high-end Ford Mustang Cobra, there is very little room for error,” he said.
Wieland’s situation typifies many area manufacturers, which is reminiscent of the good times before the recession took hold.
In June 2007 the nation’s economy was steaming full-speed ahead. As consumers grabbed up luxury goods of all kinds, the dominant recreational vehicle industry in Elkhart County had trouble finding enough workers to build its products. During the heyday of June 2007 the county’s employment grew to 132,200 people. Many of those were driving into the county from southern Michigan and surrounding Indiana counties.
The recession hit the RV industry hard and jobs and companies disappeared quickly. In January of this year the county’s employed workers numbered 107,700, which was actually a 4.6% boost over January 2010. But as the national economy continued its agonizingly slow growth, Elkhart County had a spurt of job creation.
There were 9,900 jobs added in the county from January to May, according to Indiana Workforce Development statistics.
Dorinda Heiden-Guss, president of the Elkhart County Economic Development Corp., said her agency is working to lure manufacturers to the county and retain those already here.
She said the EDC in 2011 recorded more than 1,800 new jobs being announced through the agency and more than $115 million in new investment in the county’s companies.
Goshen, Ind.-based Supreme Industries is moving ahead with plans to add hundreds of jobs.
WSBT-TV, South Bend reported that the Goshen City Council granted final approval Tuesday (April 17) to a tax abatement request from Supreme Industries. The company says it expects to hire an additional 350 workers by 2015, while retaining more than 600 positions.
The company is planning to invest around $7 million as part of the expansion project. The new jobs should pay around $17 per hour.
Supreme Industries manufacturers specialized truck bodies, shuttle buses, armored vehicles and trolleys.
Editor’s Note: The following is an excerpt from a Sunday feature in Indiana’s Elkhart Truth offering a snapshot of the area’s economy as it recovers from the devastating unemployment and impact on its manufacturing base during the “Great Recession.” To view the entire article click here.
No one seems ready to exhale.
Most everyone can point to signs of an economic rebound around Elkhart County, with new jobs, business expansions and brightening attitudes about the future, but many are still holding their breath. While they see the community improving, they worry about a number of events and possibilities that could reverse the recovery.
Alex Strati, president for the northern region at Old National Bank, explained the hesitancy that consumers and businesses owners are feeling. The headwinds created by the presidential election and climbing fuel prices are giving people pause but, at the same time, the steady, upward performance of the stock market is giving them confidence about their investments.
Indeed, the bank has budgeted for growth this year, although that growth is anticipated to be modest.
“I really do think we are on the right track,” Strati said. “It’s much better than it was.”
Other professionals in the area hold similar opinions. They, too, believe things are better but challenges remain.
Pain at the Pump
With gas prices surpassing $4 a gallon and three suppliers hiking the price of their products as a result, Bill Dawson, vice president and general manager at Clean Seals Inc. in South Bend, is fearful another recession could bloom.
“If oil prices keep going up, it will derail what we have done,” he said.
He has met with his employees and prepared them for the possibility that if the economy sinks, everyone will take a pay cut. The smaller paychecks and fewer hours that were the norm during the recession could return if fuel prices drag down the recovery.
What happens at the pump ripples through the entire economy, Dawson noted. Consumers will be putting more money into their gas tanks and have less to spend on clothes, extra food and leisure activities like eating out.
Looking at his Elkhart County-based customers, Dawson believes fuel costs will eventually whack the recreational vehicle industry. Not only will gas crimp how much money consumers have for making a discretionary purchase of a motorhome or travel trailer, it will force manufacturers to pay more for every component that goes into a unit.
“I’m not trying to paint doom and gloom,” he said. “I think the economy is headed up but it’s very fragile.”
Even if the gas crisis eases and the economy continues to strengthen, Dawson doubts Elkhart County will boom like it once did. Still, he admires the work ethic and willingness to change to meet the demands.
“I don’t know of any place that has people like Elkhart County,” he said.
Looking for Workers
The people he sees walking along Middlebury Street in the afternoon draw special admiration from Scott Welch, president and CEO of Elkhart-based Welch Packaging Group Inc. In fact, he said he wants to hug them because they are making the effort to get and keep a job.
Surprisingly in the city with 12.1 percent unemployment, Welch said he is having trouble finding good candidates to fill the 10 to 15 positions he has open locally. Many of the people who submit applications, he said, have work histories that indicate they collect a paycheck until they qualify for unemployment. Then they quit.
“We’re trying to find people who want to work for the next 10 to 20 years and we’re not finding a very big pool,” Welch said.
The problem was common when unemployment was 4 to 5 percent and, after being dormant for the past couple of years, has cropped up again. It has reached such a point that recently Welch called company officials into a brainstorming session to figure out ways to attract people.
Over time, the difficulty finding workers could mean projects will get shifted from the Elkhart plant to Welch Packaging’s other operations across the Midwest. Plants in Cleveland, Chicago and Toledo, for example, Welch said, do not share Elkhart’s unique problem of finding people to employ.
“We have the work if we have the people,” he said.
To view the entire article click here.
Indiana’s Elkhart County is holding out hope that Think, the electric car company that set up shop there, can be resurrected by its Russian owner.
“We want them to be successful,” said Barkley Garrett, Elkhart’s economic development director, in an interview with the Chicago Tribune. “We’d like to see them meet all their numbers. Certainly sooner rather than later we’d like to see them up and operating, producing the vehicles they thought they would be.”
But if the car company doesn’t restart, Garrett isn’t concerned. “If they were to go away today, it wouldn’t cost the city much.”
So far, Elkhart is out only $1,500 in tax benefits given to the company.
Others believe this city of 50,000 will find a way to reinvent itself another way, as it has done throughout its history.
A few short years ago Elkhart County could have been named RV County. But as gasoline prices rose, it didn’t take long for the impact to hit Elkhart. Monaco RV, which at one point had $1.2 billion in sales making high-end RVs, was among the consolidations and closures that hit the area when it sold itself to Navistar and then shuttered local operations.
When Hurricane Katrina devastated the Gulf Coast in 2005, Elkhart’s RV industry thought it was making a comeback because of the renewed need for portable and temporary housing. The bulk of RV orders, however, proved an illusion, masking the fact that real demand for RVs had declined precipitously, said Gregg Fore, president of Dicor Corp., an RV industry supplier based in Elkhart.
When the county’s unemployment topped 20% in 2009, up from 4% when the RV industry was at its peak, building electric cars looked like a viable future.
“One of our strengths is we reinvent ourselves,” said Philip Penn, who heads the local chamber of commerce.
For example, the city used to be the world’s largest band instrument manufacturer. The industry employed thousands from the late 1800s until the 1960s. One manufacturer, C.G. Conn, once employed 2,000 people.
“When the whistle blew for quitting time, you didn’t want to be in the way because, man, they’d come running out of there like ants,” Penn said.
According to the Chicago Tribune, when the bulk of instrument manufacturing moved overseas, Miles Laboratories, which was founded in Elkhart and best known for Alka-Seltzer, became the city’s largest employer. At one point, more than 4,000 people worked at the pharmaceutical-maker’s 1 million-square-foot campus.
But in the late 1970s, Bayer AG of West Germany, the world’s fourth-largest chemical producer, acquired Miles. By the 1980s, the Bayer campus essentially had been abandoned.
The city sold the property, turning over the campus to the Feed The Children charity for $1. The nonprofit today occupies a fraction of the campus, and the city plans to tear down many of the buildings.
Think isn’t the only green-tech company that has promised jobs that never surfaced. Two years ago, Indiana’s governor said Elkhart County would be the home of hybrid and plug-in trucks with old RV manufacturers partnering with young clean-tech companies.
Those deals never took place.
“How many are here today? None. How many received government money? All of them. Oops,” Fore said.
The county also has dabbled in alternative energy. “We’ve had our experiences with solar, wind and electric and, to date, we’ve not see those pay the dividends Washington promised,” said Dorinda Heiden-Guss, president of the county’s Economic Development Corp.
If another reinvention is in the works, Heiden-Guss says the county will have to raise the money because three visits from President Barack Obama haven’t brought much change to the unemployment rate.
Her department’s budget is scraped together from local town budgets and has just four employees, she said. “Our organization doesn’t have a dime more.”
Elkhart County ranked first nationally by achieving the largest percentage increase in employment among 256 of the 322 most populous U.S. counties where employment grew from March 2010 to March 2011, according to a report by Inside INdiana Business.
Elkhart County recorded an employment gain of 6.2%, the U.S. Bureau of Labor Statistics reported Sept. 29. Elkhart County’s employment increase of 6.2% outpaced a national job growth rate of 1.3% during March 2010 to March 2011. Within Elkhart County, the largest employment gains occurred in manufacturing, where the number of jobs rose by 5,125, amounting to a 12.4% boost in manufacturing employment.
“These results highlight a renewed vitality as WorkOne has helped strengthen Elkhart County’s workforce to a high-level of skill and innovation. As the U.S. and global economies have slowly rebounded from the depths of the economic crisis, Elkhart County employers have continued to build operational efficiencies and workers have enhanced not only their technical skills but also ‘soft skills,’ such as teamwork, communication and discipline in the workplace,” said Chuck Knebl, communications manager for WorkOne in Northern Indiana.
Three Indiana cities are among the tops in the nation for growth in the value of goods and services they produce, according to an Associated Press report.
The U.S. Department of Commerce reports that the Elkhart-Goshen area saw a 13% increase in its Gross Domestic Product from 2009 to 2010. Columbus’ Gross Domestic Product rose 10.1% over the same period.
Only Elizabethtown, Ky., and San Jose, Calif., fared better.
Columbus Area Chamber of Commerce President Jack Hess said that educational efforts, increased productivity and global growth led largely by engine maker Cummins Inc. helped boost the city.
Elkhart-Goshen’s growth reflected the area’s rebound since the recession that decimated manufacturers including recreational vehicle makers.
The Kokomo MSA ranked 17th nationally for GDP growth in a sign of the auto industry’s rebound.
Indiana’s Elkhart County has been the RV manufacturing capital of the world 52 weeks a year, according to a report by WNDU TV, South Bend.
And now, for one week a year, it’s the home of an open house for RV dealers that has become so big, some feel the event rivals what has traditionally been the industry’s premier trade show in Louisville.
“It’s getting more and more comparable to Louisville,” said Joe Murray of Canada-based Roadtrek Motorhomes Inc. “I think we’re going to, we may see some transition where dealers are going to stop going to Louisville and come here in place.”
Today, for the first time ever, Roadtrek was taking part in Elkhart’s Open House for dealers despite the fact that all of the units are made in Kitchener, Ontario.
“I think if you’re a major entity in the RV business it’s to the point now where you need to be here,” said Murray. “It’s like our Louisville show, you know, if you’re not there, it’s like you’re not in business.”
That’s high praise for an Elkhart event that had humble beginnings. “Well, the first show, we were the only ones,” said Doug Gaeddert, of Forest River Inc.
WNDU reported that four years ago, Forest River held its first open house for dealers. It came at a time when many RV companies were going out of business or bankrupt, and Forest River wanted to show dealers that it was still solid and here to stay.
“You know, expectations at that time is that we would certainly do business, because we’re in business to do business, but we far surprised I think anybody’s expectations as the amount of volume that was written,” said Gaeddert.
During this year’s dealer open house week, Forest River is one of 25 companies taking part. “And today, you know this industry, there’s not a lot of pioneering that goes on after something has been pioneered, a good idea gets jumped on and built upon,” said Gaeddert.
Gaeddert said that he welcomed the out-of-towners, and welcomed the competition.
One Elkhart open house ‘first timer’ with a big name leased the former Fastec plant, hoping the trip would be a win-win for Winnebago Industries Inc.
“The event has continued to grow, but we were outside of the footprint of Elkhart, based in Iowa as we are,” said Chad Reece of Forest City, Iowa-based Winnebago.
The problem was solved when Winnebago bought Middlebury based manufacturer SunnyBrook RV. To make up for lost time, the two companies brought a larger number of units to display.
“This is a great venue because the manufacturers have the ability to showcase as much product as they can possibly bring,” said SunnyBrook’s Fred Hershberger. RV makers apparently don’t have the same luxury at the Louisville show. “At Louisville, some of these product lines where I’ve brought 13 different models in a single product line (to Elkhart), at Louisville, I might be able to show three or four.”
At Forest River, where it all began, there was enough room for an elephant ear booth while buses shuttled dealers to and from their hotels.
Forest River expects about 3,000 dealer representatives to visit the plant during open house week.
“Louisville may see some decline, it may not, at this point there hasn’t been an attrition,” said Gaeddert. “The dealer is going to decide, dealers want to come here, we’ll be here. Dealers want to do Louisville in addition to the open house week, we’ll be in Louisville. The dealers will determine the fate of both.”
Gaeddert says that a survey was taken after last year’s show in Louisville and that it showed dealers overwhelmingly wanted to keep the Louisville show going at its regularly scheduled time.
RV dealers are flocking to northern Indiana this week to view new 2012 models as Elkhart County’s 4th Annual RV Open House Week kicked off Monday (Sept. 19), according to a report by WNDU TV, South Bend.
Some 3,500 RV dealers representing 1,600 dealerships are expected to pass through by the week’s end.
“This is a really big deal,” said Ed Kinney, vice president of sales and marketing for Millersburg-based Carriage Inc. ”It developed into a big deal with dealers coming in to look at product, buy product, take it back to their lots and get ready for the fall season.”
In a field just east of the RV Hall of Fame, about 500 units are on display for Thor Industries Inc. companies. Meantime, Carriage RV and several other companies set up on the south side of town, near the U.S. 20 Bypass and County Road 17.
“We’ve got several new floorplans in the Carriage line,” said Kinney. “We’ve got a new Cameo here that’s got a resort shower in it, which is like a 48-inch by 32-inch shower, which is new.”
At the Monaco RV LLC display, representatives were showing brand new Vesta Class A motorhome. “The Vesta is the only coach that was really designed with a wind tunnel,” said Tim Jones of Monaco.
While the Vesta is big and brawny like most motorhomes, it is also sleek and aerodynamic. “We’re hearing people driving these coaches around that are getting 9 1/2 to 10 1/2 ten miles per gallon in a 36-foot to 40-foot motorhome,” said Jones.
At last year’s open house, factory shipments to dealers were running about 70% higher compared to the year before. This year, the increase is a much more modest 6%.
“It’s still a steady year, it’s a good year for who are still in business and survived and doing OK,” said Kinney.
Kinney and others hope that making better products will make up for the bad economy. “I think we’re cautiously optimistic but we also know there’s a lot of uncertainty out there.”
Kenny Gipson is an RV dealer in Mountain Town, Ark., who made the trip to Elkhart. “You have to be optimistic or get out of the business. They’re trying to make the product better suited for what people want.”
By the end of 2011, the industry is expected to deliver about 247,000 units to dealers which would be an increase of about 2% over 2010 figures. However, experts are predicting that dealer shipments will decline in 2012 by about 2%.
Editor’s Note: The following is an article authored by Gene Stowe appearing in Tribune Business Weekly, a publication produced by the South Bend (Ind.) Tribune, outlining Elkhart County’s successful drive to generate significant investment in the local business community.
Speaking by telephone from a pub in Germany, Nicholas Gwynne muses that not so long ago, his first reaction to a mention of Elkhart, Ind., might have been: “Where the hell is Elkhart?”
Now Gwynne, vice president of operations for Kiel N.A. LLC, urges others across Europe to consider northern Indiana for business relocation. The international seat-manufacturing firm is investing $3.79 million in an Elkhart operation.
“Northern Indiana has some fascinating opportunities,” says Gwynne, who heard of the area through some associates in Italy and Canada. “It’s got a vast pool of potential employees that are pretty well trained. It has a vast pool of second-tier suppliers, which is what we want to use.
“The cost of shipping, the cost of the infrastructure, the interstate — it’s fantastic. You can go east, west, north, south without a problem. You’ve got three international airports within a three-hour drive. What more do you want? You’ve got the Port of Indiana. It’s amazing.”
The amenities are attracting more and more investment to Elkhart County, identified just three years ago as the “white-hot center of the economic meltdown” and visited by Barack Obama as both candidate and president.
In the next two years, new and expansion projects brought $345 million in investment and nearly 6,500 jobs to the county, with more coming this year.
Last month, the Economic Development Corporation (EDC) of Elkhart County at its annual Investors Lunch honored six companies that made significant contributions to the 2010 success:
• Abrasive Blasting and Coating Services, which invested $167,600. Chris Wert from administration and Joe Grandstaff, operations manager, represented the company, which provides corrosion control services for parts used in power generation.
• Livin’ Lite RV, which invested $757,000. President Scott Tuttle represented the company, which manufactures ultra-lightweight automotive campers and aluminum trailers and markets them in North America, Europe and Australia.
• MSC Industrial Supply, which invested $8.06 million. Rick Spriggs, senior director of Midwest customer fulfillment, represented the company which is one of the nation’s largest direct marketers of industrial supplies and equipment.
• Nexus RV, which invested $1 million. President Claude Donati and Vice President David Middleton represented the company, which builds and sells motor homes at the same site.
• Santelli Tempered Glass, which invested $3.8 million. President Joe Santelli represented the company, which makes tempered glass and serves the RV market among others.
• Vixen Composites, which invested $7 million. President Gregg Fore represented the company, which manufactures structural and exterior composite panels for the RV industry.
Those were part of $100 million in investment last year that created 1,765 jobs. In 2009, $245 million in investment created 4,700 jobs.
Earlier this year, six manufacturers and a large distributor have announced plans for $22 million in investment that will add at least 350 jobs, including Kiel N.A.
Gwynne says the company will eventually employ 150 people and keep another 150 busy in local vendors.
“We’re going to be using services,” he says. “I found them in Nappanee. I found them in Goshen. I found them in South Bend. I found them in Elkhart itself. The whole area has very supporting opportunities for us.”
Gwynne says small-town opportunities in the United States are usually undersold, but Dave Ogle, director of business retention and expansion for the Economic Development Corporation of Elkhart County, enlightened him about the possibilities.
“One thinks of the United States as a big country, but the backbone of your country is what politics has forgotten,” Gwynne says. “I was impressed with the volume of small and middle-sized companies. I talk about it here in Europe.
“Northern Indiana has fantastic opportunities to the east, to the west, to the south and to the north. America has got an opportunity because you’ve still got an industry that can provide you with fantastic product, and it should be utilized.”
Open Range RV Co. is the latest builder to join the growing list of companies participating in Elkhart County’s 4th Annual RV Open House, set to run Sept. 19-23 at the industry’s manufacturing hub in Northern Indiana.
The family-owned company, based in Shipshewana, will be showing its line of towable products at a site along County Road 6 – a major artery in Elkhart County – at the intersection of Northland Dr. According to Mike Crane, national sales manager, Open Range will be situated across from the Forest River Inc. display.
Crane reported that Open Range will be showing over 20 models, highlighted by the introduction of its Light series of travel trailers and fifth-wheels. The company will set up at noon on Sept. 19 and be available 10 a.m. to 6 p.m. through Sept. 22.
“We’re very excited about the Open House,” said Crane. “We have already received calls from a lot of our dealers anxious to view our product, especially the new Light line.”
Over 4,000 dealer representatives are expected to converge on the area as the event continues to gain traction with Elkhart’s manufacturing base since its inception in 2007.
Open Range, founded in August of 2007 by industry veteran Randy Graber, builds travel trailers and fifth-wheels under the brand names Open Range, Mesa Ridge, Journeyer, Residential, Light and Roamer along with the Rolling Thunder toy hauler line.
Dealers can contact Open Range at 260-768-7771.
Indiana’s Elkhart County became a symbol of what was wrong in the U.S. economy when President Barack Obama traveled there in February 2009 to make an appeal for more federal spending during a “deep and dire” recession.
Bloomberg reported that today, the county’s rebound is evident in the “Employment Opportunities” sign at truckmaker Utilimaster Corp., the return of laid-off workers at recreational-vehicle producer Jayco Inc., and the restoration of a downtown theater. The manufacturing community, which was losing jobs faster than anywhere in the U.S. as its unemployment rate soared to 20.3% in March 2009, is now a leader in the year-over-year drop in joblessness.
Elkhart’s turnaround, largely a result of the revival of its main industry, recreational vehicle production, reflects a nationwide strengthening in manufacturing, one of the few bright spots in a U.S. economy whose growth has slowed.
“What’s happening in Elkhart is typical of what’s happening across America,” said Morton Marcus, an Indianapolis economist and former Indiana University professor. “It’s just noticeable in Elkhart because the unemployment rate was so high.”
U.S. manufacturing unexpectedly accelerated in June as factories rebuilt inventories, a report this month by the Institute for Supply Management showed. The group’s measures of production, new orders and employment also climbed.
“With the recovery has come a rebound in RVs and autos, so now you are seeing places like Elkhart doing much better, as are towns like Toledo and Youngstown, Ohio where the auto industry is the dominant influence,” said Ken Mavland, president of ClearView Economics LLC in Pepper Pike, Ohio.
Motor vehicle output nationwide, which includes RVs, has climbed at a 40% annual rate per quarter on average since the recession ended in June 2009. As a result, the unemployment rate in the Elkhart County area declined to 10.1% in May.
“While we had the worst situation in the country, our recovery is probably the fastest,” said Dick Moore, the mayor of Elkhart, the largest city in the northern Indiana county. “We weren’t passive, and we weren’t stagnant.”
Elkhart has gone from the epitome of economic malaise to a standout during the recovery as much of the nation struggles with slow job growth. American employers added jobs at the slowest pace in nine months in June and the unemployment rate rose to 9.2%, sparking concern the economy is faltering.
While the Elkhart area has a long way to go to return to its pre-recession unemployment of 4.7%, it’s benefiting from economic-development efforts and a push from Washington.
This year, new and expanding manufacturers aided by state and local tax abatements have made more than $66 million in capital investments and created at least 700 jobs, said Dave Ogle, director of business retention and expansion for the Elkhart County Economic Development Corp. In 2010, companies invested $96.2 million and added almost 1,800 jobs countywide.
Obama put the national spotlight on Elkhart, making it his first trip as president to push Congress to pass a stimulus plan now valued at $830 billion, mentioning the town eight times in a press conference, then returning to the area six months later to announce Energy Department grants for electric cars.
The city of Elkhart received $41 million in stimulus money, which has been used to rebuild a runway, make sewer improvements and redo roads and sidewalks. About 200 jobs resulted, said Barkley Garrett, who heads the economic-development department.
“Everyone had written us off,” said Garrett. “The things we’ve been able to do in the past two years are pretty amazing.”
Elkhart County, home to about 200,000 residents, makes more than 60% of the recreational vehicles sold in the U.S., a $13 billion market, and manufacturers have called back workers let go after the credit crunch in 2008 and early 2009. RV shipments dropped 33% in 2008 and another 30% in 2009, prompting a 50% workforce reduction, according to the Recreation Vehicle Industry Association (RVIA) in Reston, Virginia.
The loosening of lending and the stock market’s recovery helped fuel a 46% rise in shipments in 2010, according to RVIA data.
“All the lots down here are full of RVs again,” said Barbara Rowe, 73, recalling how her church in Nappanee opened a food pantry when unemployment skyrocketed. “They don’t mention the food pantry from the pulpit anymore.”
Lot of Uncertainty
Keystone RV Co., a Goshen-based unit of Thor Industries Inc., cut its payroll to about 2,000 workers during the recession from 3,000. It’s now back to more than 3,000.
“We’ve seen the credit come back very strong,” said Bob Martin, Keystone’s president. “It’s been nice to see many of the companies hire people back and the community come back to life.”
Jayco Inc. in Middlebury cut almost half of its 2,300 workers and has since brought back more than 600.
“We’re not striking up the band and having any parties in the street, because there is still a lot of uncertainty out there,” said marketing director Sid Johnson. “But we are pretty pleased with how things have gone.”
The racket at the Utilimaster production plant, where workers assemble truck bodies for companies, including UPS and FedEx Corp., is welcome noise to John Marshall, senior vice president of sales and marketing.
After dropping to about 400 workers from 600 during the recession, the unit of Charlotte, Michigan-based Spartan Motors Inc., soon will peak at about 930 employees.
Positions to Fill
Utilimaster hired 150 workers in the last three weeks of June. It still has 105 positions to fill at its plant in Wakarusa, about 10 miles south of Elkhart, as the company prepares to manufacture its new, lightweight Reach van, in a joint venture with Japan’s Isuzu Motors Ltd.
Customers are replacing aging fleets, and Utilimaster is in the middle of a $1.9 million plant expansion.
A tax measure Obama signed last year that included a provision allowing companies to write off 100 percent of some capital investments helped spur sales, Marshall said.
Elkhart resident Dedrick Brown, 30, was making $7 an hour as a fast-food restaurant cook until he got a job on Utilimaster’s assembly line last year. He’s now earning $13.85.
“We bought a house and we’re making our bills,” said Brown, whose wife is expecting their second child.
Kem Krest Corp., a supply-chain management company whose clients include General Motors Co. and Caterpillar Inc., is investing $6 million in a second warehouse and will double its staff to about 200 over the next five years.
Anybody Can Fail
“People are working their tails off because they are no longer thinking their industries can’t fail,” said Chief Executive Officer Amish Shah.
Some federal stimulus money will help pay interest on bonds used to finance part of an $18 million restoration of a 1,700- seat, 1924 theater, which opened in June and held two sold-out Broadway productions of Fiddler on the Roof.
Still, the Elkhart County area had more than 60,000 manufacturing jobs before the recession and has 47,300 now. While that’s up from a low of 36,900 in March 2009, wages mostly have remained stagnant. The average weekly salary unadjusted for inflation rose to $812 in the third quarter of 2010, the most recent data available, from $797 in the fourth quarter of 2007.
Moore, Elkhart’s mayor, estimates it could take 12 years for the city to see employment peak again as it looks to diversify beyond the RV business.
“We’ve still got a lot of empty factories and warehouses that we need to get filled,” he said. “We’re not down and out.”
Lower unemployment, bankruptcies and foreclosures in March reduced the nation’s economic stress to its lowest point this year, according to The Associated Press’ monthly analysis of conditions around the country.
More than 85% of the nation’s 3,141 counties and every state but two — Louisiana and South Dakota — enjoyed better conditions in March than in February, the AP’s Economic Stress Index showed.
In Elkhart County, hub of the RV industry, the stress index has improved.
The county’s economic development board is negotiating to land 11 projects from companies in Britain, China and Norway that want to expand in the United States, said Dorinda Heiden-Guss of Elkhart’s Economic Development Corp.
About 40% of workers are employed in manufacturing in Elkhart County, whose Stress score was 13.36 in March, down from 22.28 two years ago. The county’s notoriety as a casualty of the recession might have put it on the radar of the international companies now looking to open plants there. The greater availability of financing also helped.
“Banks loosened up,” said Heiden-Guss.
Meanwhile, manufacturing activity, a major driver of economic growth since the recession ended in June 2009, has helped ease hardship in the Great Lakes states and Indiana over the past 12 months — more than in any other region.
By contrast, Louisiana, Iowa and the Mountain states of Idaho and Montana have suffered the sharpest increases in stress, year over year.
The average county’s Stress score was 10.5 in March, the lowest level since December. It was 11 in February and 11.5 a year earlier.
Under a rough rule of thumb, a county is considered stressed when its score exceeds 11. Using that rule, less than one-third of the counties were stressed in March, down from nearly 40% in February.
Unemployment in March declined or was unchanged from February in every state but South Dakota and in nearly 90% of the counties. Bankruptcies dipped in 43 states and 70% of the counties. And foreclosures dropped in 44 states and in more than 70% of counties.
In March, economic strains eased the most in counties with heavy concentrations of workers in manufacturing, retail and temporary staffing jobs. By contrast, stress rose the most in counties with many workers in wholesale trade and mining.
The government reported last week that the overall economy’s growth slowed sharply to an annual rate of just 1.8% from January through March. That was down sharply from a 3.1% rate in the final three months of 2010.
Many economists think the slowdown will be temporary. Nariman Behravesh, chief economist at IHS Global Insight, thinks growth will rebound to nearly 3% in the current April-June quarter. He predicts it will strengthen further to around 3.5% in the second half of the year.
The unemployment rate, now 8.8%, will dip possibly as low as 8% by year’s end, Behravesh says. He says the economy should be able to withstand this year’s jump in gasoline prices.
“Gasoline prices at around $4 per gallon will be a headwind, but they would have to go quite a bit higher to derail things,” Behravesh said.
Among all the most economically precarious states, stress levels declined in March. Nevada was again the most stressed state, with a score of 20.67. Next were California (16.19), Florida (14.52), Michigan (14.23) and Arizona (14.23). Still, thanks to gains in tourism, stress has declined more sharply in Nevada and Florida than in any other states over the past six months.
North Dakota remained the economically strongest state with a score of 4.89. It was followed by Nebraska, (5.7), South Dakota (6.27), Vermont (6.51) and New Hampshire (6.85).
A year after a national ABC News team traveled to recession-plagued Elkhart County, Ind., to gauge the responses of a group of residents to President Barack Obama’s 2010 State of the Union address, yet another ABC network production crew returned to Elkhart Tuesday evening (Jan. 25) for Obama’s 2011 address to hear those same residents’ perspective of the economy and how things compare to last year.
“Last year, ABC wanted people who had been affected by the recession,” said Andy Fies, producer for the news segment. “The point this year primarily was to reconvene the same group as last year. There are some here who weren’t here last year, but our goal was to check with the very same people that we talked to last year and see what had changed for them.”
Those changes, as reported by “20-20” correspondent Deborah Roberts, were a mixed bag. In a brief link with the network’s New York studio, Roberts noted that some were still unemployed and others under-employed — including Ed Neufeldt, the Wakarusa resident who introduced Obama to Elkhart and a national TV audience during a stirring 2009 visit. Neufeldt now works three jobs.
At one point, Roberts asked the local audience how many were unemployed last year and now had jobs. Nearly half raised their hands. Only four, however, responded in kind when she asked how many had a better financial outlook this year than last.
“We’re here at the Keystone RV plant which is one of the few bright spots here in Elkhart (County),” she told ABC News anchor Diane Sawyer. “It’s actually rehired a lot of the workers they had to let go years ago. But a number of people who watched (the State of the Union address) with us are unemployed or some are working three jobs just to try to make ends meet.”
Likewise, Roberts said the reception to the president’s speech was mixed.
“Some said they felt encouraged by the president’s comments,” she told Sawyer. “They felt inspired. Others said they felt he was a little ‘mushy,’ They didn’t have enough detail and didn’t feel he worked hard enough in talking about cuts in this economy. And the economy is what they’re really worried about here because, as you say, the unemployment rate is really high and a lot of these folks are looking for something to hold onto.”
Ironically, Indiana unemployment figures were released the same day as the president’s address. And while Elkhart County’s unemployment numbers have dropped substantially from the depths of the recession, they still lead the state’s 92 counties in joblessness with an estimated 12.8% of its workforce unemployed.
The area’s recessionary status, of course, was the prime reason Roberts and her crew returned to the factory floor of one of Keystone’s Goshen manufacturing plants for the evening. One of the largest employers in Elkhart County, Keystone was forced to trim its numbers by more than 1,000 workers at one point. As Keystone President Bob Martin reminded RVBUSINESS.COM, however, the company has reversed the trend.
“We went from over 3,000 employees to 2,000 — and now we’re back up to more than 3,000,” said Martin. “We’re still growing and expanding. The RV industry is up, but Keystone is gaining more market share. We’re up to close to 25% market share. That translates into more orders and us being able to hire more people.”
One of those hired was Sue Christophel, one of the individuals on ABC’s local panel.
“Most of the people here were on the panel last year,” said Martin. “One of them, Sue, was unemployed at the time. As I met everyone, I was given business cards, resumes. Many were very interested in getting a job. She’s one that I met, and I sent her down to my customer service department. She ended up getting a job about two months after this event last year.”
Not surprisingly, Christophel was among those who responded positively when Roberts quizzed the audience about their financial outlook for 2011. She also came away from the president’s address with cautious enthusiasm.
“I thought it was good, better than last year,” she responded. “The way I look at things now is really different. I’m more optimistic with the opportunities that have come my way. I’m more able to receive what Obama had to say. Before, when he was talking, it was just talk; it was too far out in the future and I didn’t believe what he was saying. I was almost two years without a job, so what he was saying meant nothing to me.”
The speech also resonated with John Ruple, a warehouse worker for a distribution company in Elkhart.
“To me, Obama struck a much more moderate tone this time, and I liked a lot of what he said,” noted Ruple. “There are a lot of long-standing problems; everyone knows the government is too big, it’s inefficient. If they can address that and start streamlining things, that’s a start. I also liked what he said about the government being unsustainable. If you continue to spend more than you make, where does that leave you?
“I’m a little more optimistic this year,” he added. “The economy is starting to improve. Whether that’s due to the things that they (the government) has done, or just natural progression, I don’t know.”
Wendell Powell also found something he liked in the president’s speech to Congress. While noting that he was searching for full-time employment, Powell consulted part-time for a renewable energy engineering vendor and perked up considerably when Obama spoke of wanting to see the government invest $150 billion over the next 10 years in clean energy.
“I liked some of the examples he used,” Powell said. “Particularly the roofer company that, instead of being discouraged due to the economy, shifted gears and started producing solar energy panels. We need that kind of innovation; we need alternative sources of fuel. We’ve got to get on the fast track — maybe even faster than President Obama was talking about.”
David Schrock-Shenk, on the other hand, was less optimistic.
“I thought the speech was a little ‘lame and tame,’” he said. “I don’t think his proposals matched the rhetoric. The things he laid out — his goals — were not very big and not very brave.
“We here in Elkhart County — and maybe nationally — have sort of settled into a chronic emergency,” he added. “Last year there was still a sense of emergency — the unemployment was high — and this year I don’t think the president actually talked about addressing unemployment. It was ‘We need to create jobs.’ We’re sort of used to 14% unemployment … and so the people who are still unemployed do feel a little bit left behind and do feel it’s a little inconvenient to still be unemployed in January of 2011, whereas in January of 2010 it was still high news.”
Due to the extended length of the president’s address and the response from the Republican Party, the Elkhart presentation did not feed live to the network as first anticipated. Instead, the production crew taped the audience’s remarks for use in news programs today (Jan. 26). As Keystone’s Martin noted, however, the publicity for the industry is beneficial, however it’s used.
“It’s exposure for the RV industry,” Martin acknowledged. “It’s national news. It helps our lifestyle, it helps our industry.”
Elkhart County recorded a jobless rate of 12.8% in December, lower than the 13.3% tally in November but not enough to avoid retaining the top spot among Indiana’s 92 counties, the state’s Department of Workforce Development reported today (Jan. 25).
The rate for the city of Elkhart improved to 14.9% from 15.5% in November and 17.9% in December 2009.
The rate for Goshen stood at 13.9%, an improvement from 14.8% in November and 14.9% in December 2009.
Indiana’s preliminary seasonally-adjusted unemployment rate dropped 0.3% to 9.5% in December, a 0.2% decrease from one year ago. The last time Indiana’s unemployment rate was at 9.5% was February 2009. The number of unemployed Hoosiers is below 300,000 for the first time since January 2009. Private sector employment in Indiana declined in December (-9,100); however, the state added 36,400 private sector jobs in 2010.
“Indiana’s unemployment rate is at its lowest level in almost two years,” said Mark W. Everson, commissioner of the Department of Workforce Development. “Over the course of 2010, we saw growth in manufacturing and professional and business services, partially offset by declines in construction.”