Good news travels fast in this small Indiana community in western Elkhart County.
The Goshen News reported that the morning after Navistar International Corp. announced it would move 400 manufacturing jobs from Oregon to Wakarusa, the town was buzzing with optimism.
As retiree Don Foster walked his Chihuahua down Elkhart Street near the post office Wednesday morning he was excited about the good news.
“I think it is good for the community,” he said. “It is going to put a lot of people back to work. That’s what we need.”
Foster and other town residents are well aware of the long-term economic woes that hit the town when Monaco Coach closed and terminated more than 1,000 people at its Wakarusa plant. Now, this new iteration of Monaco will be adding to the 250 employees producing Class A and Class C motorhomes at the massive complex that dominates the industrial park along Nelson Parkway.
Foster said he has friends who have worked in the recreational vehicle industry.
“Some of them,” he said, “have had a hard time finding work.”
‘That kind of excitement’
Down the street at the Chamber of Commerce, President Deb Shively had already met with her board of directors.
“It’s great news,” she said. “We are excited about that growth. And Utilimaster will be up to 1,000 employees by Labor Day and we feel Wakarusa is going to get back to where it used to be. There is that kind of excitement.”
Utilimaster converts box trucks for parcel delivery companies and a variety of other applications. The company has a joint venture with Isuzu Motors of Japan to build a line of new, light-weight vans and is adding jobs to fill orders.
Wakarusa developed in the 20th century as a hub of manufacturing activity. The small town — with its wide, tree-lined streets and early 20th century homes with large front porches — is bordered by industrial plants to its east. The industrial complexes reach out to Ind. 19 and line that highway to the north and south of C.R. 40.
Besides building RVs, Navistar builds its eStar electric truck in town. Visitors gawk at the site of the quiet electric trucks being test-driven around the town, something the locals have become used to.
“It’s like you are in the space age,” Shively said. “It is two extremes — it’s where small town USA and high-tech meet. It is very cool.”
Monaco and Navistar not only provide jobs to the town’s residents, Shively said, but the companies provide vital financial support for town activities. The companies returned as sponsors of the annual Maple Syrup Festival last year, Shively said.
“It was nice to see that support come back,” she said.
But it is the paychecks and the turn of those dollars from Monaco workers that will boost the local economy the most.
“Hopefully we will get people moving in and they will plug into the community, shopping locally and attending events,” Shively said.
Shane Weldy knows all about the hard hurt the economic downturn has visited upon Wakarusa families. He had been selling insurance for home warranties to local real estate agencies when the recession killed his career. Since then he and his wife, Charlotte, opened The New To You resale shop on Elkhart Street and also work part-time jobs as well to get by.
“Four hundred jobs is a lot,” Weldy said. “If we can get people to move to town it would be great for the community.”
He said people visit his store all the time who say they would like to live in Wakarusa. Now, with jobs being created in town, Weldy believes that will help sell homes.
“It’s definitely going to help the market,” he said.
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It may not feel like it for those who are out of work or deep in debt, but Elkhart, Ind., the nation’s RV headquarters, is one of the 79 U.S. metro areas that was economically “in recovery” in August, according to the Adversity Index, a gauge of economic activity produced by Moody’s Economy.com for msnbc.com.
The index, which is based on government data on unemployment, housing and industrial production, had previously rated the city as “in recession” for 32 consecutive months, dating to December 2006., according to msnbc.com
The positive signal for Elkhart lends support to pronouncements by local officials that business activity has been picking up in recent months. But it also comes with warnings that the recovery – if it has in fact begun – will be neither quick nor smooth.
Still, word of the uptick was warmly received by Dorinda Heiden-Guss, president of the Economic Development Corporation of Elkhart County, who said it jibes with what she’s been seeing.
“Based on what I’ve seen from both existing companies and prospective new companies, that appears to be the case,” she told msnbc.com.
Heiden-Guss said that RV makers, which have recently been hiring back some laid-off workers, are expected to see sales rebound in the coming year, citing an EDC forecast calling for a 20%. And over the past two months, EDC staff have identified as many as nine local businesses interested in expanding operations. The group also continues to see “extremely heavy interest” from manufacturers of a variety of non-RV-related products who currently do not have operations in the area, she said.
But despite such positives, economist Andrew Gledhill of Moody’s Economy.com warned that Elkhart is by no means out of the recessionary woods.
“Elkhart definitely remains in a quandary, and the economy may never fully recover to what it once was,” he said. “In fact, in our long-term employment forecast, we never have Elkhart reaching its pre-recession peak. … Elkhart is in bad shape and will be for the foreseeable future.”
And Grant Black, an economics professor at Indiana University at South Bend, said that a one-month surge in the Adversity Index doesn’t necessarily mean that the recession is in fact in retreat.
“It’s going to give you a good ballpark of what’s going on,” he said of the measure, “but it may not tell you where you are right at the moment. In other words, it’s not going to be the best instrument for saying we’ve bottomed out and turned the corner.”
Black said recent data show Elkhart County has several areas of continuing concern. Chief among them, he said, is that while the unemployment rate has been steadily declining since spring, so too have employment numbers. The labor force in the county now stands at roughly 94,000, down more than 6,800 since the fourth quarter of 2007, he said.
And 12,000 households in the county were receiving food stamps in July, up 11% from January, he noted.
Figures like that keep County Commissioner Mike Yoder from taking too much satisfaction from the recent surge of business activity and interest that he’s seen. He’s worried that many recently rehired RV workers will soon be laid off again as manufacturers pare back during what are the traditionally slow winter months.
“I’m really concerned that it’s going to be a really rough winter for a pretty good segment of our community,” he said. “We can all celebrate next summer when everyone’s employed again.”
Newmar Corp. doubled its Class A motorhome market share in January compared to January 2008, the company noted in a news release.
The Nappanee, Ind.-based manufacturer cited the latest data compiled by Statistical Surveys Inc., Grand Rapids, Mich., showing that Class A motorhome retail registrations in January of this year showed a 61% decline vs. the numbers a year prior. In the face of these declining numbers, Newmar experienced an increase of its Class A motorhome market share from 3.2% in January 2008 vs. 7.6% in January 2009. Newmar’s market share growth was 136.3%.
“Although one month’s worth of data does not make it a trend, this is welcome news and a good sign for Newmar and its dealers,” said John Sammut, Newmar vice president of sales and marketing. “Newmar will continue to work hard through the 2009 calendar year, but this certainly is a strong start to the year for our company.”
Newmar ‘s growth in market share came from both the gas and diesel motorhome segments of its Class A business.
“The improvements made to the interior and exterior designs of Newmar’s 2009 motorhome product line up appear to be having a positive impact even in a declining motorhome market,” added Pat Terveer, Newmar’s director of sales. “Developing great looking product at a great value will continue to be our company’s focus.”