Kokomo Tribune; Kokomo, Indiana

November 20, 2010

City of Firsts becomes case study

By Scott Smith
Tribune staff writer

Kokomo — When President Obama and Vice President Joe Biden make their historic joint appearance in Kokomo Tuesday, Kokomo’s status as “The Town Saved By The Stimulus” will probably be assured.

The stimulus, however, didn’t drop Kokomo’s unemployment rate from almost 20 percent to just over 12 percent; the auto bailouts did that.

But the stimulus and the bailouts have apparently become melded in the minds of Kokomoans as one and the same, part of the Democratic agenda roundly rejected this past election in Kokomo and across the nation.

“There’s a group of people here who say, ‘I’m happy for Chrysler people, but I don’t work at Chrysler. I’m one of the 13 percent who are unemployed,’” Howard County Republican Party Chairman Craig Dunn said Friday. “And I’m going to have to deal with the debt down the road, so why should I be excited?”

If there was any place in the state of Indiana where State Treasurer Richard Mourdock was expected to fare poorly, it was Howard County.

Allied with the Tea Party, Mourdock had fought tooth and nail to kill Chrysler’s bankruptcy reorganization, preferring to see the company — and more than 4,000 high-paying Kokomo jobs — liquidated.

But Mourdock, who insisted he was simply fighting to get the best deal on the state’s investment in Chrysler, received more Howard County votes than any other state candidate.

“I wish I could put my finger on it, because it just kind of blows my mind,” United Auto Workers Local 685 official Jerry Price said of the Mourdock vote. “I don’t know if it’s a failure to educate people or what. I really don’t have an answer.”

There’s no question Kokomo has benefited from both the federal stimulus bill and from the auto bailouts, perhaps to a larger extent than any other American city.

In a state more dependent on manufacturing jobs than any other, Kokomo is the most manufacturing-dependent city. Ball State University professor of economics Michael Hicks estimates up to half of the jobs in Kokomo are either directly or indirectly dependent on auto manufacturing.

Tuesday, Obama and Biden are expected to focus on Chrysler Group LLC’s $300 million investment in a new transmission line, an investment made possible by $15 billion in government loans.

They’ll also focus on an $89 million stimulus grant made to Delphi Corp., which will allow the parts maker to launch a startup manufacturing effort aimed at producing components for next-generation electric vehicles.

The startup is slowly building up, with about 40 jobs created thus far. Delphi expects to create about 300 more jobs over the next few years.

Of the two investments, both Dunn and Kokomo Mayor Greg Goodnight, a Democrat, think the auto loans had the biggest impact on Kokomo.

“The stimulus has been helpful, but the single biggest decision which had an effect on Kokomo was the fact the president gave American auto manufacturing the ability to succeed,” Goodnight said.

Because Chrysler survived, about 4,500 workers are still employed at four plants here.

Because General Motors survived, Delphi was able to emerge from bankruptcy. More than 2,000 salaried workers and several hundred hourly workers are still employed by Delphi’s Electronics & Safety division in Kokomo.

Goodnight said he thinks it’s a “natural reaction” for people to be against large-scale government intervention.

“I don’t know if they really see the benefits of what has been done here,” he said. “It’s just the way people are. They’ll say they’re against the federal government, but they want their Social Security, and they want their Medicare. They want a strong defense and everybody wants veterans benefits.”

One thing Goodnight said he doesn’t want to contemplate is what might have happened in Kokomo if the government hadn’t intervened.

“Nope. Don’t want to look back,” Goodnight said when asked if he’d seen any analysis of where Kokomo could be. “I don’t want to analyze the road not taken.”

• Scott Smith is a Kokomo Tribune staff writer. He may be reached at 765-454-8569 or via e-mail at scott.smith@kokomotribune.com