Eight months after unemployment in Elkhart County, Ind., hit 18.9% and helped make this middle America spot a symbol of the economic meltdown, people are starting to go back to work.
In November the unemployment rate in the county fell to 14.5%, the lowest since November 2008, when it was 13%. A big reason for the turnaround is the rebound in the recreational vehicle industry, which is responsible for about a quarter of the county’s annual economy, according to the Wall Street Journal.
As a result, Elkhart RV makers that were laying off workers last year are now hiring. The Keystone RV division of Thor Industries Inc. is one of them, adding about 500 workers in recent months. “It’s a very positive thing for our community,” said Ron Fenech, Keystone president and CEO.
Keystone laid off 1,000 employees as the recession took hold, cutting the staff from 3,100 to 2,100 before the recent reversal. The turmoil in the marketplace last year created a lot of uncertainty, Fenech said, but that began easing earlier this year and the buying trend has continued through the summer and fall. “I think things are positive and heading in the right direction, but we certainly are not all the way back,” he said.
Nationally, the Recreation Vehicle Industry Association (RVIA) projects that shipments to dealers from manufacturers will increase 27% in 2010, rising to 203,000 units from 159,500. RV sales nose-dived in 2008 as gasoline prices soared and consumer credit contracted.
At one point Elkhart County had 71 manufacturing facilities that produced about 65% of all recreational vehicles made in the U.S.
For years, employment in Elkhart and the surrounding area was stable, rising from 3.3% in 1997 to 4.6% by the end of 2007. In 2008 high gas prices and the downturn accelerated that, and unemployment in the county tripled to 16% in one year. The two hardest-hit industries were construction and manufacturing.
Earlier this year, when unemployment was at its peak, many restaurant and shopping center parking lots were virtually empty.
President Obama visited in February, pointing to the problems in the area to support his argument that Congress should pass a stimulus bill.
Things have improved significantly since then. Jayco Inc., another Elkhart RV company, has hired 250 employees in recent months, bringing staffing levels to 1,450 people. During the downturn it let go 900 employees and cut its daily production from 30 units to 15 on some assembly lines. Those assembly lines are now producing about 23 units per day, said Sid Johnson, the company’s director of marketing.
The company now has back orders, Johnson said, adding there was “a certain amount of optimism, albeit pretty cautious, as to what we think next year will be like.”
Dorinda Heiden-Guss, president of the Elkhart County Economic Development Corp., said a positive aspect of the notoriety from Obama’s visit was business interest. She said she was hoping to get 25 companies to tour the county this year and consider locating there. Through early December 59 had come, looking at buildings, meeting with local officials and, in some cases, exploring financing.
The county has more than $134 million in new projects going on from outside companies that are investing in property, equipment, buildings and other improvements. That equates to about 3,300 new jobs, Heiden-Guss said.
Electric Motors Co. hired Ed Neufeldt, a laid-off RV plant worker who introduced Obama during a presidential visit. Now the 62-year-old father of seven is helping the company, which partnered with Gulf Stream Coach, to build a prototype truck modeled on the Ford F-150 pickup truck but with an electric engine.
Neufeldt made cabinets for Monaco Coach Corp. for 32 years before he was laid off in September 2008, along with 1,400 other workers. He was volunteering with several out-of-work RV plant employees at a local shelter when he was asked to introduce Obama during one of his visits to the community. He got a part-time job delivering bread afterward and is now working both jobs. “I’m still not making what I made on unemployment, but I am blessed,” he said.
Phil Penn, president of the Greater Elkhart County Chamber of Commerce, said stimulus money — through October Indiana received $848 million, according to the federal government — has to be credited with helping keep some people in the area employed and accelerating work on some local infrastructure projects.
“But that’s not what our economy is built on. We certainly welcomed the stimulus dollars to our community, but as far as direct job creation, quite frankly, that will come from the private sector.”
The fall of the recreational vehicle industry in Oregon’s Lane County was swift, relentless and brutal.
A year ago at this time, local RV makers sent workers home for their customary holiday furloughs. Most workers never came back. Within months, two companies, Monaco Coach Corp. and Country Coach LLC, filed for bankruptcy, reported The Register-Guard, Eugene, Ore.
Today, Country Coach is all but dead, its bankruptcy case now in Chapter 7, meaning everything it owns will be sold to satisfy debtors. Monaco Coach, once a high-flying publicly traded company headquartered in Coburg, became a tiny division of a multinational corporation, Navistar International, after its assets were sold off in bankruptcy. A third manufacturer, Marathon Coach, remains in business, but has limped along on a curtailed production schedule, building a fraction of the high-end bus conversions that it did in previous years.
“It was one of those business cycles that happens once a century,” said Steve Schoellhorn, president and chief operating officer of Marathon Coach. “It came so fast and so hard, it was like a tsunami, and we couldn’t get out of the way of it. … The whole thing blew up.”
While the Oregon RV industry is not gone, what’s left is a mere shadow of what was a major force in the local economy.
As recently as 2005, transportation equipment manufacturing — an industry dominated by the three RV makers — employed 4,500 people in Lane County, second only to the wood products industry. By last March, that number had fallen to 900, before rebounding to 1,400 in October, according to the state Employment Department.
Monaco Coach employed more than 2,000 people in Lane and Linn counties as recently as 2008. Today, about 400 people are working at the Coburg plant, Navistar spokesman Roy Wiley said. Country Coach employed nearly 2,000 workers at its Junction City plant as recently as 2006. Today, the company is defunct. Marathon Coach employed more than 400 people in 2008. Today, it has 240 employees.
Ron Folk is among the former RV workers who hopes things start turning around soon. A production worker at Monaco for 51/2 years, Folk now is working part time, doing maintenance at an RV resort on the coast, making about one-third of what he earned at Monaco. He stays in a travel trailer, and only makes it home to see his wife in Springfield a couple of times a month, he said.
“It pays more than unemployment,” he said. “You do what you got to do. … As soon as the economy turns around, and people start hiring inland, I’ll probably find something closer.”
Other workers, such as Todd Wilson of Springfield, were called back to work for the new Monaco last summer after being unemployed for more than six months.
“When I got the call, I was ecstatic,” he said.
With fewer people on the job, workers carry more responsibility for quality, he said. Workers also make more money than before, and get similar benefits, he said.
“It’s still a great place to work, and a great crew of people to work for and work with,” he said.
Skilled workers remain
Jack Roberts’ job is to find the silver lining — or at least a ray of hope — in all those clouds. As executive director of the Lane Metro Partnership, Roberts works to retain and recruit employers. One bright spot he sees in the implosion of the RV industry is the number of skilled workers left behind. He said he’s hopeful most will stick around Lane County until the economy turns around.
“When people get back into the production cycle, when manufacturing jobs start to come back, the presence of that work force here should make us attractive,” he said.
Roberts said that, in hindsight, it’s obvious that a business that relied on wealthy people spending large wads of cash on discretionary, luxury items would be vulnerable in an economic downturn. But, he said, “It’s very hard to say no to people who have large sums of money and who want to buy what you’re selling.”
While the industry looked at demographics in its favor — aging baby boomers with time and money to spend on leisure — they missed the economic clouds, he said.
“We didn’t fully understand how much we were riding a stock market and real estate bubble,” Roberts said.
Monaco is building both motorhomes and towable RVs. Wiley, the Navistar spokesman, was vague on production levels, saying it has “gone up somewhat.”
“We’re looking for a pickup in the market next year,” he said.
Navistar, based in Warrenville, Ill., is best known as the maker of International brand buses and heavy trucks, and Roberts said he’d like to see the company move some of that production out to Coburg. The proximity to the large California market makes an Oregon location attractive, he said, but there isn’t the supply network established here that there is for its Midwest factories.
The local RV companies weren’t the only ones hurt by the downturn. The Recreation Vehicle Industry Association (RVIA) predicts companies will ship 159,500 units this year, down 40 percent from the 265,000 units shipped in 2008. Those numbers include both motorized and towable RVs.
As for 2010, Richard Curtin, the University of Michigan economist who does forecasts for the industry, predicts RV shipments will increase by 27% to 203,500 units.
Richard Coon, president of the RVIA, points to signs of a recovering economy, including a stronger stock market, slowing job losses, higher productivity, increasing home sales and rising manufacturing hours. But weak consumer confidence, continued high unemployment, and anemic consumer spending remain cause for concern, he said.
RVs, he said, “are woven into the fabric of America.”
High-end market survives
Marathon’s Schoellhorn said the high end of the RV market — the niche that his company occupies with its $1 million-plus custom bus conversions — “is still really, really challenging.”
“It’s better right now than it was a year ago, but it’s still way, way off from the highs of a few years ago,” he added.
Marathon built fewer than 20 coaches in 2008, compared to 70 or 80 per year a few years back.
“We really slowed down production” in 2008, Schoellhorn said. “We’re just starting to ramp up a little bit.”
Marathon, which is a privately held, family owned business, specializes in building high-end coaches, bought by race car drivers, professional golfers, actors and others who can spend $2 million for what Schoellhorn once called the “Ferrari” of motor homes. That rarefied niche has enabled the company to survive the recession, he said.
“Our niche doesn’t require the volume that a typical RV maker requires,” he said. “Even though things are bad, we can get by and even prosper with fairly minimal sales, while other companies need substantial volume.”
But the recession has hurt prospective Marathon buyers, he said.
“I put a lot of our customers and prospects in two categories: One group doesn’t have the money they used to because of lost investments; the other has it, but is afraid to spend it.”
“Every now and then I hear people express the view that the rich will always have money,” said Bill Conerly, a Lake Oswego consultant.
“It’s kind of true, but there are times when the rich don’t want to spend money.”
Comeback will take time
As the RV industry comes back, it will look different than the prerecession industry, experts say. The high end of the market in particular will take time to come back, said Frank Magdlen, a Portland analyst.
“It’s going to be smaller until times get better,” he said. “It might take three to five years for it to be what it was in ’06.”
Bob Lee is the godfather of the local RV industry, co-founding the company that became Monaco Coach in 1968, and starting the company that became Country Coach in 1973. He said that while lower-end RVs, such as trailers and toy haulers, will bounce back, he thinks the high end of the market — the niche that Country Coach carved out for itself — “is pretty much history.”
“The tribal knowledge to build high-end is going away fast,” he said. “With that gone, there’s no way to crank it back up again.
“It’s not just a production line product,” he added. “It’s not an easy program to just go out and build some of these. I’m not even sure I could put together a company that could build these at this point.”
More than 1,000 laid off employees from Monaco Coach Corp. will receive worker retraining assistance through $3.85 million in federal grants announced Thursday.
The money is intended to extend aid to 1,430 workers who lost their jobs at the recreational vehicle maker’s operations in Coburg and in the Eastern Oregon community of Hines, according to the Register-Guard, Eugene, Ore.
Lane Workforce Partnership and the Oregon Consortium will each handle grants awarded by the U.S. Department of Labor. Most of the money will flow to Lane County, where the vast majority of Monaco workers lost their jobs as the RV industry contracted during the high fuel prices and economic recession of the past two years. The March termination of 2,200 Monaco workers, including 1,355 workers at its Coburg plant, was the biggest layoff ever in Lane County.
Kristina Payne of Lane Workforce Partnership said earlier grants of nearly $1 million had provided 70 scholarships to workers seeking retraining last spring, as well as 66 scholarships during the summer and 73 this fall. With the latest award, she said her agency could now more aggressively promote the availability of aid to help laid off Monaco workers get retrained for new careers.
“It’s hard when you don’t know that you have the funds in hand,” said Payne, the work force investment manager for Lane Workforce Partnership.
Payne said the Lane Workforce Partnership had not been sure it was going to get the grant money. “We were starting to wonder if this was really going to come through for us,” she said. “So it was somewhat of a surprise. It’s not automatic to receive the funds.”
Monaco filed for bankruptcy protection in March, and in June sold its major assets to Navistar International Corp., which created a new division called Monaco RV LLC to build recreational vehicles.
Editor’s Note: Fleetwood Enterprises Inc. and Monaco Coach Corp. remain on Robert Salomon’s list of what he calls “noteworthy” bankruptcies of 2009. The associate professor of management at the Stern School of Business, New York University, filed the following story on his blog at http://blog.robertsalomon.com/2009/10/05/notable-bankruptcies-of-2009-q3/
In January I predicted that “major” bankruptcies in 2009 would challenge the 383 mark set in 2001 (the high-water mark after the dotcom bubble). I even suggested that it was possible that we could exceed 400 “major” bankruptcies in 2009.
According to Bankruptcydata.com, there have been 208 “major” filings thus far in 2009. Assuming that bankruptcies are equally distributed throughout the year, this puts us on pace for 277 bankruptcies. That is tracking well shy of my prediction. In fact, bankruptcies were down significantly from Q2 to Q3, and have been trending downward throughout the year.
That stylized fact begs the question: Is that a “green shoot” dip in bankruptcy filings, or might the Fed/Treasury liquidity programs be keeping weaker firms on artificial life support?
Although I cannot be sure why bankruptcies have tracked lower than forecast — whether due to a better-than-expected economy or government intervention (or some combination of the two) — I am certain that my prediction was way off. At this point then, if the bankruptcy pace quickens in the 4th quarter (as is typical), the final number will likely come in around 300. With 300 major bankruptcies, we would exceed last year’s number by 30%.
But looking forward, the question now becomes: What should we expect for 2010? I will wait for the final 2009 numbers to make a definitive prediction, but right now, my informed guess would be 350, … and that’s even if the economy rebounds in 2010, barring a double-dip recession scenario.
Gheen Irrigation Works, which lost its historic Eugene, Ore., plant to a massive fire two years ago, is preparing to buy a piece of commercial real estate in Harrisburg, Ore., from the bankrupt Monaco Coach Corp.
The $2.2 million purchase requires approval of the bankruptcy judge overseeing the Monaco case. A hearing on the issue is scheduled today (Sept. 11) in U.S. Bankruptcy Court in Delaware, according to The Register-Guard, Eugene.
Gheen has signed a sales agreement to buy the property in Harrisburg, according to court documents. The deal includes five buildings, totaling 93,600 square feet, on 13.8 acres on the Willamette River, according to a listing of the property on the website Loopnet.com. The original asking price was $2.9 million.
Gheen, established in 1933, sells irrigation equipment to farmers nationwide and in Canada and Mexico.
The company’s 40,000-square-foot plant went up in flames in April 2007, causing $5 million in damage and temporarily idling more than 65 employees.
The company shifted its manufacturing work to a 15,000-square-foot building that survived the fire, and to outdoor production lines. In December 2007, Gheen bought the local manufacturing operations of the Lake Co., a California-based competitor in the irrigation equipment industry, including a 27,000-square-foot plant on Airport Road in Eugene.
Since then, the company and its 85 employees have been operating at both locations, said Alan Thayer, a Eugene lawyer for Gheen.
Gheen officials are waiting to see whether the court approves the Harrisburg deal before making firm plans for the property, he said. But company officials were attracted to the Harrisburg property because it would allow them to move the business to a location accessible to its current employees, Thayer said. The Harrisburg plant is about a 20 to 30 minute drive from Eugene-Springfield.
The site is big enough that Gheen could combine both operations in one location, Thayer said, though the timing of such a move is not yet known.
Harrisburg City Administrator Bruce Cleeton said the city is interested in attracting people and businesses to live and work in the community.
“With Monaco having vacated this building and property, to hear that Gheen is possibly interested in moving in there bodes very well for our community,” he said.
The Harrisburg sale is one piece in the winding down of Monaco Coach’s bankruptcy case. The Coburg RV manufacturer filed for Chapter 11 bankruptcy protection in March and in June sold its major assets — factories, inventory, brands and intellectual property — to Navistar International Corp. for $47 million, which created a new division called Monaco RV to build recreational vehicles.
All that was left over of the old Monaco Coach was seven properties in Indiana, Florida and Oregon, including the Harrisburg real estate.
In a court filing, trustee George Miller, charged with selling those properties, said Gheen emerged as the leading candidate to buy the property after several months of marketing by Evans Elder & Brown, a Eugene broker.
The Gheen offer appears superior to any other offers that the trustee might reasonably obtain, Miller said. Gheen officials said Gheen needs the deal to close by the end of this month, or it won’t buy the property, Miller said.
If the trustee were to put the property up for public auction, he would not be able to close by the buyer’s deadline, he said.
Bartel & Co. Auctioneers and FM Stone Commercial announced that they will conduct auctions in Elkhart, Ind., Sept. 17-19 of the former assets of Custom Chassis Products LLC.
Custom Chassis Products LLC manufactured and assembled motorhome chassis and was a joint venture between bankrupt Monaco Coach Corp. and International Truck and Engine Investments Corp.
Assets to be sold include approximately 1,500 skids of new parts, new diesel engines, transmissions, wire, tires, axles, tools, crane systems, welders, paint booths, raw steel and office furniture.
The auctions will begin at 9 a.m. each day and will be held at 2700 S. Nappanee St. in Elkhart.
The auctions are by order of the U.S. Bankruptcy Court, Joseph Bradley trustee.
The auction firm will be operating three auction rings Sept. 17-18 and two auction rings on Sept. 19. To be sold on Thursday (day one) will be the new parts, inventory, engines, transmissions, tires and axles. Selling on Friday (day two) will be the tools, paint booths, welders, office furniture and other machines. Saturday (day three) will be dedicated to selling raw steel, chassis rails, and other steel components.
Open house inspection dates are scheduled for Sept. 15 and 16 from 9 a.m .to 5 p.m.
“We are expecting a good turnout of bidders and have had inquiries from all over the United States, Canada and Overseas,” said Brad Hooley, chief auctioneer for the Middlebury, Ind.-based firm that has overseen similar auctions of former RV firm assets in recent years.
Ross Miller, broker with FM Stone Commercial, Elkhart, said, based on the level of interest and volume of items to be sold, this auction will be one of the largest industrial auctions ever conducted in Elkhart County.
For more information go to www.bartelandcompany.com or call Bartel & Company at (800) 860-8118.
Confronted by hard economic conditions and the worst truck market since 1962, Navistar International Corp. on Wednesday (Sept. 9) reiterated the company will be profitable for its fiscal year ending Oct. 31, despite reporting a loss for the third quarter ended July 31.
“While we are lowering our guidance, we still expect to be strongly profitable at $4.95 to $5.25 per share and I am encouraged by the results of the company and our commitment to generate positive results for our shareholders during these challenging economic times,” said Daniel C. Ustian, Navistar chairman, president and CEO, in a news release. “The third quarter is traditionally our most challenging quarter, but we remain focused on the long-term success of the company. Therefore, we elected not to implement drastic short-term cost cutting actions that would have impacted our ability to deliver long-term results.”
Manufacturing segment profit was $110 million and $604 million, including the impacts of the Ford settlement, net of related charges, for the third quarter and first nine months of 2009, respectively, compared with $473 million and $881 million in the year-ago periods.
Navistar reported a net loss for the current third quarter of $12 million on $2.51 billion in revenues, compared with net income of $331 million on $3.95 billion in revenues in the third quarter a year ago.
Included in the results is the impact of the asset acquisition of certain assets of Monaco Coach Corp., which resulted in an extraordinary gain of $23 million in the third quarter. The gain is a result of the company being able to acquire the RV inventories out of bankruptcy and the effects of purchase accounting with the fair value of the acquired assets.
For the nine months ended July 31, 2009, the company demonstrated solid progress in its business strategy by delivering net income of $234 million on revenues of $8.28 billion, including the impact of the Ford settlement and related charges, compared with net income of $477 million on revenues of $10.85 billion in the same period a year ago.
George Graber was unemployed for three months this year after the shutdown of an RV plant in Elkhart County, Ind. Now, he’s building $15,000 travel trailers at startup Heritage One RV Inc.
His job-hunting luck reflects a rebound in RV demand that may signal the end of the worst U.S. recession since World War II. In the last four domestic cycles, Winnebago Industries Inc. and other RV makers foreshadowed the economy’s decline and heralded its recovery, government and trade-group data show, according to Bloomberg.com.
“The RV industry is always the first in and the first out, and there’s already been a noticeable beginning of it coming out of the current recession,” said Dave Hoefer, 66, an adviser to Earthbound Recreational Vehicles, which was founded this year on the site of another bankrupt maker in Middlebury, Ind.
Elkhart County builds more than half the RVs sold in the U.S., making it the center of a $14 billion domestic market. Evidence of a turnaround is showing up in new companies like Heritage One sprouting from the remains of failed manufacturers, and in no-vacancy signs at a motel favored by RV-hauling truckers.
Analysts watch RV sales because motorhomes and travel trailers are discretionary purchases that consumers defer in an economic slump. Industrywide deliveries may rise in 2010 to end a three-year decline, said Richard Curtin, director of consumer surveys at the University of Michigan.
Sales in July, the latest available, ran at the strongest annual rate since October, according to the Recreation Vehicle Industry Association (RVIA). By year’s end, those shipments should show their first monthly gain since October 2007, predating the onset of the recession in December of that year, said Curtin, who analyzes data for the Reston, Va.-based trade group.
Rise and Fall
Wholesale deliveries to dealers averaged 355,000 over a six-year period that ended in 2007, then tumbled to 237,000 last year as the recession took hold, according to RVIA data.
Showroom visits and consumer-loan approvals now are rising for the first time in more than a year, said Steve Smith, a Heritage One partner who recently drove 5,000 miles through the Midwest and South as part of a company sales call.
“Customers’ interest is obviously rising, which is making the dealers feel better,” Smith, 47, said from the 30,000-square-foot building in Nappanee, Indiana, where Graber and about a dozen other workers were assembling so-called “stick and tin” trailers of metal sheets over wooden frames.
Three Obama Visits
Elkhart County needs that kind of news. Located along the Michigan border and home to about 200,000 people, the county has a jobless rate of about 17%, the worst in Indiana. President Barack Obama has visited the area three times to talk about economic hardship.
Ron Muhlenkamp, whose Muhlenkamp & Co. in Wexford, Pa., has invested in RV makers coming out of past recessions, said he isn’t yet buying the stocks in this cycle.
“We think the consumer might be slower to return this time,” he said. U.S. joblessness reached a 26-year high of 9.7% in August, the Labor Department said on Sept. 4. The so-called underemployment rate, which includes part-timers who would prefer full-time work and job seekers who have stopped looking, rose to a record 16.8%.
Before coming to Heritage One, Smith worked at Travel Supreme Inc., a maker of $160,000 trailers that shut its plants in January after another company bought out the operations. Nearby sit two vacant buildings owned by motorhome maker Monaco Coach Corp., which went bankrupt in March.
Betting on Recovery
Earthbound, the company advised by Hoefer, is on the site of Pilgrim International Inc., which went out of business in September 2008. Earthbound has been working on $42,000 lightweight trailers since January and is betting on a recovery in time for a sales push in early 2010. Heavier trailers cut fuel economy for their tow vehicles.
“We feel the industry has a strong future,” said Bill Hughes, 58, an Earthbound investor who was a Pilgrim vice president of service and parts. In the past year, 15 new RV makers have begun operations, according to the RVIA.
Another sign of recovery is bookings at the Red Roof Inn in Elkhart, said General Manager Beth Ronzone, a 24-year employee. The motel is filled again on some nights with truck drivers who move RVs, a reminder of the industry heyday two years ago when rooms were sold out five or six times a week.
‘Seeing a Pickup’
“We started seeing a pickup in late April,” Ronzone, 57, said Aug. 24. By that evening, most of the parking lot was occupied.
Hiring is starting to pick up, too, said Dorinda Heiden-Guss, president of the Economic Development Corp. of Elkhart County
Keystone RV Co., a Goshen-based unit of Thor Industries Inc., the largest U.S. RV maker, announced last month it will add 200 workers to expand travel-trailer output, Heiden-Guss said. Jayco, in nearby Middlebury, is also recruiting, she said.
Among the investors betting on the industry is Warren Buffett’s Berkshire Hathaway Inc. Berkshire’s Forest River Inc. RV unit paid about $42 million for the RV business of Elkhart- based Coachmen Industries Inc. American Industrial Partners bought the motorhome unit of bankrupt Fleetwood Enterprises Inc. of Riverside, Calif., in June for $53 million.
Winnebago and Jackson Center, Ohio-based Thor are the only large, publicly traded RV makers still in the business and not in court protection.
Shares of Forest City, Iowa-based Winnebago and Thor have almost doubled this year. Since the recession began, Winnebago has tumbled 45% and Thor has fallen 26%, compared with a 31% decline in the Standard & Poor’s 500 Index. Coachmen still operates its bus and manufactured-home business.
At Sierra Motor Corp., a 22-year-old maker of interiors for horse trailers, 2008’s record-high fuel prices helped spur expansion into human transport.
The Bristol, Ind.-based company added a line of travel trailers weighing less than 1,750 pounds. They include amenities such as toilets, which aren’t common on models that small, President Michael Greene said.
That move also meant that Sierra Motor, which has about 45 workers, could keep about a dozen employees who would have been laid off as orders for equine vehicles flagged, Greene said. The labor force has exceeded 100 in busier times, he said.
“They are like family, you hate to have to let people go,” said Greene, 52, who was one of the company founders.
For Graber, 45, who had to sell his pickup for a cheaper model and take other belt-tightening steps after losing his purchasing job at Travel Supreme, the Elkhart recovery can’t come fast enough.
“People I know personally, a couple of them will get back every week now,” he said. “Three months ago, everyone was just down and they weren’t even taking applications.”
Nerves took hold of Herman Wiley minutes before he was to take the stage in front of hundreds of co-workers, politicians and members of the national media on Wednesday (Aug. 5) in Wakarusa, Ind.
But then President Barack Obama took Wiley under his wing and helped calm those nerves, according to the South Bend Tribune.
“He took me backstage and told me everything would be all right,” Wiley said. “I took a deep breath and went out there.”
In a confident voice, Wiley told his story to those gathered in front of him – about how he worked in the recreational vehicle business for 32 years at the former Monaco Coach Corp., was recently laid off temporarily while trying to support his two children, and then how he was rehired in June at Monaco RV.
“I have great faith the economy will turn around,” he told the crowd.
He then introduced the president and shook his hand as Obama made his entrance Wednesday at Monaco RV to thunderous applause from the nearly 200 Monaco employees there.
After the news conference, Wiley spoke about his once-in-a-lifetime experience.
“It felt really good,” said Wiley, 54, of Elkhart. “I was proud to do this. It was beyond anything you could imagine.”
Wiley’s story is not unique.
In fact, just about every Monaco employee there had two things in common: They are currently employed but had recently been laid off. Most of them lost their jobs sometime between July 2008 – when 1,400 workers were cut – and March.
Some 400 employees have been brought back since Navistar International Corp. bought the company out of bankruptcy and renamed it Monaco RV.
The news that Navistar would receive $39 million in grants to develop batteries and electric vehicles was a sign their company may be on the right track to stability. The money will be spent to build electric trucks with the ability to go 100 miles.
“Hopefully, we can get going and get back the money we were making a few years ago,” said Laura Collins, who makes the commute to Wakarusa from Logansport.
Collins said she took a $5 or $6 an hour pay cut when she returned but said the work is worth it.
“It’s an industry that once you start working, it’s hard to stop,” she added.
Randy Trotter, of Bristol, Brandon Boisvart, of North Manchester, and Jeff Compton, of Warsaw, stood shoulder to shoulder as they talked about what the grant will do. They, too, were all temporarily laid off when the Monaco plant in Warsaw closed but now are happy to report to Wakarusa daily.
They say the stimulus money is helping them get back to work and secure their jobs.
“It was a struggle, struggle, struggle before we got called back,” Trotter said.
“Yeah, this really got us back to work,” Compton added.
“And hopefully will keep us there,” Boisvart said.
Rich Esterlie, of Elkhart, was laid off a year and a half ago and struggled to find a job before he was called back.
“There already is a hybrid, now we’re getting involved with an electric line of trucks,” he said. “I definitely think this will help the business.”
Henry Kaiser was more skeptical, adding he hopes more jobs are added, but he said he’s not certain the money will help.
Josh Walters was riding around Wakarusa on his Harley-Davidson shortly after the news conference when he stopped to talk about the grant.
“I think it’s a great thing as long as (Obama) sticks to what he says,” Walters said. “What’s iffy is having the electric vehicles go for 100 miles. They’ll have to improve on that, but it’s a starting point.”
Walters said he worked as a repo man after he was cut from Monaco.
“That’s when I got to see the other side of the economy,” he said. “I understand what people go through.”
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.
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.
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.
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.”
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.”