Editor’s Note: Mike Stuckey, senior editor for MSNBC.com’s Elkhart Project, in this story updates readers a year after President Obama visited Elkhart, Ind., to lobby for his economic stimulus package. To see the entire package, click here.
One year after President Obama thrust Elkhart County, Ind., into the national spotlight by using it as the launching pad for his economic stimulus proposal, positive signs abound.
The region’s recreational vehicle industry, which was decimated by the recession, expects significant growth in coming years; businesses have announced nearly $400 million in new investments in the area; and the county has a fighting chance to become a leader in the electric vehicle industry.
But many locals are still watching warily for the only bottom line that really matters to them: new jobs.
Among them is Jeffery Ricks, 47, who last held down a full-time position as a welder at Godfrey Marine, an Elkhart manufacturer of small pleasure and fishing boats, more than two years ago.
“You know it’s going to be OK,” he said with a smile, “but the thing is, when?”
It’s a question that bedevils policymakers and pundits alike: When will the economy, which many indicators suggest is emerging from a deep recession, start producing new jobs?
At the local level, in Elkhart, political leaders believe the answer is soon.
“By 2011, this county is just going to explode with jobs and people,” said County Commissioner Mike Yoder, who has been working to entice new businesses to the area.
“Everything is full throttle,” said Dorinda Heiden-Guss, president of the Elkhart County Economic Development Corp., ticking off bullet points of hope for the county’s thousands of jobless workers.
The recreational vehicle industry, around which much of this region’s economy revolves and often seen as a bellwether for the nation’s fiscal health, appears to be recovering as many manufacturers rehire laid-off workers. A study done for Heiden-Guss’ group predicts 22%-plus annual growth for the next four years after a 74% decline in shipments since late 2005.
In 2009, businesses announced plans to spend $134 million to locate or expand operations in Elkhart County, creating a predicted 3,300 jobs.
Early this year, Norwegian company Think said it would spend $56 million setting up a plant to assemble electric cars, hiring 415 workers by 2013; and a new company known as Family Holiday Village Elkhart said it would build a $205 million European-style family resort that will create 500 construction jobs, 500 permanent jobs and draw a million tourists a year to the county within a few years.
It’s a big change from when Obama visited the city early in his presidency to pitch the economic stimulus plan. In his speech, Obama cited that fact that Elkhart’s jobless rate had tripled over the previous 12 months to more than 15%.
“We’ve got the best workers right here in Elkhart, who are willing to put in hard time and do whatever it takes to make sure a company succeeds, but they’ve got to have a chance,” the president said on Feb. 9, 2009, to hearty applause from his audience at Concord High School.
Not long after Obama’s trip, Congress passed a $787 billion stimulus plan. One year later, Elkhart’s jobless rate has fallen to 14.8% after hitting a high of 18.9%. The falling rate is due to some workers being rehired or finding new jobs but also due to some simply giving up, but it is still about triple what it was in boom times. Nationally, the unemployment rate is 10%, a stubbornly high number that has forced Obama to propose new incentives for companies to increase hiring.
Elkhart County Commissioner Mike Yoder sees lots of new economic activity in the county, but he admits it may be a while before new jobs show up in large numbers. Elkhart’s Yoder believes it’s going to take time for people to see a difference in their individual working lives.
“There is still a lot of cynicism out there, and I sense this as we announce the incentives to pull these businesses in,” Yoder said. “People are saying, ‘That’s great but I still don’t have a job.’ It’s unfortunate that it’s going to take a while for these jobs to show up. That’s just the way it is.”
And “just the way it is” includes plenty of cold facts to temper warm visions of the future:
Despite Elkhart’s falling jobless rate, an estimated 14,000 local workers remain unemployed. IHS Global Insight, a consulting firm, forecasts Elkhart won’t return to pre-recession employment levels until 2039.
The median price of a home in the county has plummeted to late 1990s levels, below $90,000, and continues to fall. Sales in 2009 were down by 35% from 2006.
As jobless residents exhaust savings and unemployment benefits, social service agencies are facing more requests than ever for help. One, Church Community Services’ food pantry in downtown Elkhart, served a record 2,169 households in December, more than 24,000 for the year, a 21% increase from 2008.
Area residents are split on the impact of the president’s stimulus package and his visits — he made two as a candidate and two as president.
Elkhart Mayor Dick Moore believes the county’s share of the $787 billion in spending and tax cuts has generated thousands of jobs locally, both directly and indirectly. But an msnbc.com tally could only find a few dozen new jobs directly created by the $50 million in stimulus money that has poured into the county, much of it grants that school districts would have received anyway.
Elkhart artist Shana Dines, who attended two of Obama’s local speeches, sitting right behind him and shaking his hand at one appearance, said her family’s finances had been “in disastrous circumstances” as a result of her husband’s hours at an RV supply firm being cut.
Now, “things have picked up unbelievably,” Dines said. “They’re working overtime and last year at this time they were down to four days a week.” As a result, the family was able to get a mortgage modification and hang onto its home.
“I’m not sure how much of that was Obama, but because of where he’s come from, he knows what it’s like to struggle and he wants to see the common people survive,” she said.
Graphic designer Justin Graber has seen business improve at the Elkhart ad agency where he works, but he believes that Obama’s attention to the county likely had as much of a negative effect as a positive one.
“I honestly think if the government would just get out of the way and let us go back to work, it would be better,” said Graber, a founding board member of the Michiana 9-12 Project, a group inspired by conservative TV and radio host Glenn Beck that stresses family and religious values over government solutions.
“I know it’s well-intentioned, but the ups and downs of the economy are just as emotionally driven as they are by business factors, and I think people pull back even more when they worry about where this (stimulus) money will come from,” he said.
Angie Recchio, a sales rep with an Elkhart decal maker that serves the RV industry and also active in the 9-12 Project, agreed that the government should stand back.
“We’re certainly very grateful that things bottomed out and seem to be improving,” she said, “but I think the free market economy works and its cyclical and it would cycle on its own.”
Regardless of where folks stand politically, there’s an almost palpable sense of fatigue for having their community held up again and again as the poster child of recession. “Most people are optimistic,” Recchio said. “People are ready to stop talking about it and move on.”
Real estate agent Cory White agreed, even though as a specialist in distressed property sales, he does not believe the real estate market has hit bottom yet.
“I think we’re back on track,” he said. “I think the jobs are coming.” Locals are more focused on the positive now than the negative, he said. “Elkhart’s been known for being first in and first out of a recession. We’re on our way.”
Heiden-Guss, of the Economic Development Corp., said her organization was “grateful for the coverage, even though it was dire at many times. I will say the notoriety has kept us extremely busy, both good and bad. We’ve had a lot of interested parties migrating toward the money.”
But Yoder, the county commissioner, said the best prospects for growth and new jobs are with companies that were on the county’s radar screen long before the economy tanked.
“It’s not just because the president visited here,” he said, although “that didn’t hurt.” And, he acknowledged, “we are using elements of the stimulus package to help these companies along.”
Perhaps the most exciting prospect for the area’s future is the growing buzz that Elkhart County could become a hotbed of electric vehicle development and manufacturing. Joining Think locally in that niche are Navistar, which plans to produce electric delivery trucks, and Electric Motors Corp., which is developing hybrid pickup trucks.
Indiana Gov. Mitch Daniels has “identified Elkhart County as the new electric vehicle capital,” Heiden-Guss said.
And while it will take some time for those jobs to arrive, workers like Ricks, the unemployed welder, and his partner, Suncearay Shorter, are willing to wait it out.
“Nothing happens overnight,” said Ricks, who said she lost her job with insulation supplier M.A.P. two months ago.
“It’s hard,” Shorter said, “but we have patience.” Besides, she added, there’s more to life than jobs and money. The couple are expecting their first baby together in September.
“God is good,” said Ricks.
Norwegian carmaker Think is getting ready to begin making its City electric car in the U.S. next year, and is looking for local suppliers that will be ready to begin production of key parts, including exterior plastic body panels, according to Plastics News.
“Our initial production in the U.S., if everything goes according to plan, will be in the first quarter of next year and we hope to be sourcing the body panels in the U.S. for that initial production,” said Keith Takasawa, director of product development for Think North America.
Oslo-based Think is now building cars for the European market from a plant in Finland. With $47 million worth of new backing from a range of investors including New York-based Ener1 Inc., the firm is ready to expand with a fully tested electric car for the U.S. market.
The $24.7 million operation is going into an Elkhart, Ind., facility that, until recently, was making doors and windows for recreational vehicles. Ener1’s lithium-ion battery making unit, EnerDel, will supply batteries for Think from Indianapolis.
With those two parts of the production puzzle already in place, Think now is lining up other suppliers. The firm likely will tap into the Elkhart region’s plastics expertise in a variety of molding techniques first developed for the recreational vehicle industry, Takasawa said in a Jan. 12 interview at the North American International Auto Show, where the Think City was part of a demonstration fleet of electric and hybrid vehicles.
The City’s two-seat, all-electric car uses plastics extensively to reduce weight and improve performance. Its exterior is made of coextruded acrylic styrene acrylonitrile/ABS, which is pressure formed. The interior is mostly polypropylene, relying heavily on expanded PP foam. Some of the EPP is wrapped in a polypropylene textile; some is intentionally left exposed.
Think’s low-volume production — with a capacity of 20,000 vehicles annually at the new Elkhart plant — lends itself to non-traditional molding compared to elsewhere in the auto industry where injection molding is king, Takasawa said.
“The RV industry knows how to handle a lot of different plastics at relatively low volumes,” he said. “They don’t need 100,000 or 200,000 units a year to be profitable. Between a work force that already knows how to build RVs and the supply base, we think this will be a good situation for us.”
Takasawa said that after years of struggle, Think now finds itself in a good position for a global audience ready to take a serious look at electric vehicles. The company has been making cars since the late 1990s, first under original owner Pivco Industries AS, then under a series of owners that included Dearborn, Mich.-based Ford Motor Co.
Think has feedback from more than 300 million miles of real-world driving from its customers. Its electric engine can take the car 100 miles on a charge and the U.S. version will have a top speed more than 70 miles per hour. It already meets strict crash and performance regulations in Europe.
“We know how to design and build electric cars,” Takasawa said. “The other guys are just getting into it and don’t have the experience that we do.
“The other advantage is that it’s a [designed from the] ground up electric vehicle. It’s not a derivative of a gas vehicle. We haven’t had to make the design changes that others may have had to make because they’re starting with a gas engine.”
Think designers also are considering the company’s next generation of cars, and they have been talking to resin suppliers and molders about new ways to make the body panels, he said.
The future will depend on how well consumers take to the electric vehicle market, but Takasawa said he thinks the public is ready.
“The conditions are right,” he said. “The government’s been very much behind it. And after gas hit $4 a gallon, that really changed people’s minds about what they will be purchasing. This may well be it, and I think we’re well-positioned to take advantage of it.”