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.”
For most of its history, the Federal Reserve has been a high temple of monetary matters, guiding the economy by setting interest rates but remaining aloof from the messy details of day-to-day business.
But the financial crisis has drastically changed the role of the Fed, forcing officials to get their fingernails a bit dirty, according to the New York Times.
Since March, when the Fed stepped in to fill the lending vacuum left by banks and Wall Street firms, officials have been dragged into murky battles over the creditworthiness of narrow-bore industries like recreational vehicles, rental cars, snowmobiles, recreational boats and farm equipment – far removed from the central bank’s expertise.
A growing number of economists worry that the Fed’s new role poses risks to taxpayers and to the Fed itself. If the Fed cannot extract itself quickly, they warn, the crucial task of allocating credit will become more political and less subject to rigorous economic analysis.
That could also undermine the Fed’s political independence and credibility as an institution that operates above the fray – concerns Fed officials acknowledge.
Executives and lobbyists now flock to the Fed, providing elaborate presentations on why their niche industry should be eligible for Fed financing or easier lending terms.
Hertz, the rental car company, enlisted Stuart E. Eizenstat, a top economic policy official under Presidents Bill Clinton and Jimmy Carter, to plead with both Fed and Treasury officials to relax the terms on refinancing rental car fleets.
Lawmakers from Indiana, home to dozens of RV manufacturers, have been pushing for similar help for the makers of campers, trailers and mobile homes.
And when recreational boat dealers and vacation time-share promoters complained that they had been shut out of the credit markets, Sen. Mel Martinez, a Republican from Florida, weighed in on their behalf with the Treasury secretary, Timothy F. Geithner, who promised he would take up the matter with the Fed.
“This is the most straightforward indicator of why we don’t want the government doing this, except in an emergency,” said Douglas J. Elliott, an economist at the Brookings Institution who supports the new lending program but worries about its long-term implications. “There is no clear line about who should be included and who shouldn’t be included. It’s an inherently political decision,” he added.
Big money is at stake. At issue is a joint venture of the Fed and the Treasury aimed at making more credit available. The program, known as the Term Asset-Backed Securities Loan Facility, or TALF, has bought about $27 billion in securities backed by credit card debt, car loans and student loans. In buying the securities, the Fed is providing the money that ultimately reaches businesses or consumers trying to borrow.
Despite a slow start, the program could soon expand broadly. This week, the Fed will add commercial real estate mortgages – a vast market – to the list of loans it will buy. Eventually, officials say, the TALF program could provide as much as $1 trillion in financing.
Fed officials say they, too, are uncomfortable with their new role and hope to end it as soon as credit markets return to normal. When R.V. manufacturers recently sought a meeting, senior Fed staff members refused to see them in person and instead heard their pleas in a conference call.
The central bank is increasingly having to make politically sensitive choices. For example, it is weighing whether loans to people who buy speedboats and snowmobiles are as worthy of help as those to people who buy cars. And it is being besieged by arguments from RV manufacturers and strip-mall developers that they play a crucial role in the economy and also deserve help.
Many of the decisions could have political repercussions. On Feb. 9, President Obama traveled to Elkhart, Ind., a Republican stronghold that Democrats hope to convert to their column. Elkhart is also home to much of the RV industry, which has been battered by the recession.
“When we talk about layoffs at companies like Monaco Coach and Keystone RV and Pilgrim International, we’re not just talking numbers,” Obama said, referring to three prominent RV companies. “We’re talking about people who’ve lost their livelihood and don’t know what will take its place.”
At the time, Fed and Treasury officials suggested that they would finance only car loans, credit card loans, student loans and Small Business Administration-guaranteed loans.
But the Recreation Vehicle Industry Association (RVIA) and Indiana lawmakers – among them, Rep. Joe Donnelly, a Democrat, and Rep. Mark Souder, a Republican – were already lobbying the Fed to include loans for recreational vehicles on its list of eligible collateral that the Fed would accept.
They were not alone. Rental car companies were pushing the Fed to finance their fleets. Hertz, which is owned by two private equity firms – the Carlyle Group and Clayton, Dubilier & Rice – hired Eizenstat to make its case.
In trying to persuade the Fed to relax its loan terms, Eizenstat led delegations of Hertz officials to both the Treasury and the Fed. They reached out to Ron Bloom, the co-chairman of the Treasury Department’s auto task force, as well as to top aides to Mr. Geithner. They also made detailed financial presentations to Fed officials in Washington and New York.
While the Fed so far has denied Hertz’s requests to relax loan terms, some of the lobbying appears to have worked. In March, the Fed announced that it would purchase loans used to buy light trucks and recreational vehicles. It also said that it would finance equipment leasing deals, rental car fleets and “floor plan” loans, which car and RV dealers use to finance showroom vehicles.
On May 17, the Fed refined its rules even more, saying that “recreational vehicles” included not just RVs but also boats, motorcycles and snowmobiles.
Fed officials said they had always intended to include those vehicles because they had long been financed through asset-backed securities of the type the loan facility was created to preserve. And the series of expansions, they said, did not reflect a capitulation to industry pleas. Rather, they simply announced additional details as policy decisions were reached.
Almost inevitably, industry groups are grumbling that the Fed’s terms favor some, like consumer car loans and credit card debt.
Mathew Dunn, a lobbyist for the National Marine Manufacturers Association, said collateral requirements for loans to recreational boat dealers are higher than those for securities backed by car loans.
That may soon change. In late May, the Small Business Administration said that it would open one of its main lending programs to RV dealers. Because the Fed has already agreed to finance SBA loans, it may not be long before it is financing boats, snowmobiles, motorcycles and campers.
The Pomona RV & Travel show, originally scheduled for April 23-26, will now be held June 19-21, and is partnering with Summer Fest ’09.
In addition to the RV show, visitors will be able to attend the Boat, Home & Backyard and Computer Spectacular all for one price, according to a news release. The show will run Friday, June 19, from 12 noon to 7 p.m.; Saturday, June 20, from 10 a.m. to 7 p.m.; and Sunday, June 21, from 10 a.m. to 6 p.m. at the Pomona Fairplex in Pomona, Calif.
Comedians with a love for life on the road, Pat Mac and Mike Faverman, will delight attendees with their outdoor cooking tips and easy recipes as they present “Ultimate Camp Cooking” on stage at the Show. They have several years of professional cooking experience and even more years performing to audiences as stand-up comics. They get crowds fired up about the outdoors and especially talking about great food.
Other events at the Fairplex during the weekend will include the 45th Annual LA Roadster Show and Wine and Cars Under the Stars events. (Separate admission is required for these two events.)
Show attendees will be able to register to win one of four Keystone RVs in the “Live Your Dreams Sweepstakes.” Other prizes include “The Rally 2010” dry camping reservation, a one-year Good Sam Emergency Road Service membership, a one-year RV Handyman Club membership, a Woodall’s North American Campground Directory and a one-year Good Sam Club membership.
The Pomona RV & Travel Show is produced by Affinity Events a division of Affinity Group Inc. (AGI). Call (805) 290-2203 for more information or visit www.agievents.com.