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January 22, 2014

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Auto Industry Bailout Pulls Kokomo Back From Brink CHARLES WILSON

11/22/10 04:57 PM ET

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General Motors , Auto Industry Bailout , Automaker Bailout , Chrysler , Auto Bailout Success , Kokomo , Stimulus , Business News


KOKOMO, Ind. — Jerry Price remembers the eerie silence less than two years ago when he walked through one of the transmission plants that long provided the economic lifeblood of this town steeped in auto industry history. With the machines still and the workers gone, casualties of Chrysler's bankruptcy declaration a few days earlier, the only signs of life were a few lights that had been left on. "None of us, including myself, ever thought that this place would be running again," said Price, vice[1/22/2014 12:01:08 AM]



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Auto Industry Bailout Pulls Kokomo Back From Brink

president of United Auto Workers Local 685. Not only has the plant reopened for business, but President Barack Obama and Vice President Joe Kokomo, Ind. jewelry store owner, John Martin praises Biden are visiting Tuesday to herald Kokomo as one of the major success stories of the auto bailout. the economic recovery of the city on Nov. 19, 2010 Get Business Alerts Sign Up

Residents of this city, where unemployment once soared above 20 percent after the shutdown, are doing their part to proclaim the virtues of legislation that generated plenty of controversy at the time.

"If the bailout hadn't come, then we'd be a ghost town," said Jeff Newton, a pastor who runs Kokomo Urban Outreach, which runs a network of food pantries. Submit this story


Kokomo's fortunes have been entwined with the auto industry since 1894, when Elwood Haynes invented one of the first automobiles in the United States there. Since the 1930s, when thenDelco (later Delphi) located there, followed by General Motors and Chrysler, the auto industry has been the city's bread and butter. Today, Kokomo is likely more dependent on the industry than any other city in the country – including those in Michigan, said Indiana University-Kokomo Chancellor Michael Harris, an economist who has studied the auto industry for 20 years. Nearly 25 percent of the city's work force is employed by the industry, he said. Most work at the four Chrysler plants that employ about 4,500 today, at GM, which employs about 1,000, or at Delphi, which has about 1,400 workers. Sponsored Links

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"If the auto industry would have totally walked away from Kokomo, we would probably have unemployment that would have hit 35 percent," said Harris.[1/22/2014 12:01:08 AM]

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Auto Industry Bailout Pulls Kokomo Back From Brink

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As it was, the city's unemployment rate hit 20.4 percent in June 2009, the highest level in the past decade.


"It's been very scary at times," said Dave White, 58, who has worked at Chrysler for 24 years. His wife also works for the automaker.

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Kokomo leaders and business owners say an infusion of cash pulled the city back from the brink. Besides benefitting from Chrysler's $7.1 Buy a link here billion share of the auto industry bailout, the plant received nearly $4 million in federal stimulus money and an $89 million grant to help Delphi Automotive Systems develop electronic components for vehicles.

In September, the jobless rate dropped to 12.7 percent – the lowest rate in nearly two years. Stimulus money paid for a new park pavilion and helped remodel a fire station. Democratic Mayor Greg Goodnight said the city used other money to remove 11 stoplights and convert several streets into one-way streets to help make downtown more friendly for pedestrians. Volunteers also planted flowers throughout downtown to spruce up the area.

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While those jobs were temporary, observers say the bigger – and longer lasting – boost has come from Chrysler and Delphi, which have invested heavily in Kokomo since receiving federal help. Delphi announced a $28 million investment and Chrysler has promised more than $300 million to retool one of its transmission plants. "There's no doubt that Chrysler has decided to make Kokomo the center of their manufacturing for the future," Harris said. Even so, Kokomo's recovery is still in its infancy.

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Newton, the pastor whose Kokomo Urban Outreach runs six neighborhood food pantries and meal programs, said the food pantries still serve about 800 people each month – the same as they did during the height of the depths of the recession. "We had people crying in the hallways" when things were at their worst, Newton said. "They'd never had to go to a food pantry before, and they felt ashamed." Now, instead of autoworkers scrimping on food to pay mortgages and car loans, they're seeing more minimum-wage workers to whom the recovery hasn't yet trickled down, he said. Penny Irwin, the broker-owner of Re/Max Realty One in Kokomo, said the average price of a home in Kokomo dropped about $30,000 over the last three years. But home prices are slowly improving. According to Indiana Association of Realtors statistics, the median cost of a home in Howard County is $75,250, up from $69,900 a year ago.

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Downtown has also seen a turnaround, with 13 new businesses starting up or moving in since January, said John Wiles, a former newspaper editor who now heads the Kokomo Downtown Association. The city used an economic development income tax for some projects, made matching loans to downtown businesses to improve building facades and set up a riverfront development district along Wildcat Creek to encourage new restaurants by making it easier to obtain liquor licenses. "We've done a lot of things for ourselves," Goodnight said. The riverfront initiative – along with Small Business Administration financing – made it possible for father and son Steve and Blake Kinder to start Cook McDoogal's Irish Pub, a new downtown bar[1/22/2014 12:01:08 AM]

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Auto Industry Bailout Pulls Kokomo Back From Brink

with lavish woodwork rescued from old churches and remodeled homes that's set to open Tuesday. A couple of years ago, Blake Kinder said, the only people downtown were coming for court appearances. Now, it's common to see young mothers walking their babies in strollers. "The mood has definitely risen," he said. "People are starting to feel more comfortable about Kokomo's future, whether they like to admit it or not." ___

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Associated Press writer Tom Coyne in South Bend also contributed to this story. FOLLOW HUFFPOST BUSINESS






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Around the Web: Kokomo: Chrysler leading economic recovery | | The ... a-town-saved-by-stimulus: Personal Finance News from Yahoo! Finance

UPDATE: Editor Apologizes For Controversial Photo

GM-Chrysler Bailout: Was It A Blank Check? Filed by Nicole Hardesty |

44 people are discussing this article with 89 comments

Comments are closed on this entry.[1/22/2014 12:01:08 AM]

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bllnsinchnge SUPER USER · 124 Fans

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$93 million divided by 6900 jobs = 13,478.26 per job, nice subsidy, in reality, the employees should make this amount LESS, than what they currently make. If that is divided into multiple years could could be less of a hit to the government. 23 NOV 2010 6:11 PM

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I'm glad the money stayed in America!!!!!!!! 23 NOV 2010 6:53 PM FAVE



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Jerome_Morrow 333 Fans

First mistake for any town: Depending on one employer/industry for your lifeblood. This town's leadership should start looking and courting other companies to come into town fast. In three years, when this factory closes again, they will find themselves in trouble with no bailout if they keep depending on the auto industry.... 23 NOV 2010 6:33 PM FAVE


jkkFL 6,860 Fans

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You just can't stand a happy ending can you? I lived in Kokomo when I was very small. It has always been a hardscrabble town- filled with people with good hearts- and strong work ethic. It - and Indiana has long manufacturing backgrounds. Auto makers depended on[1/22/2014 12:01:08 AM]

Auto Industry Bailout Pulls Kokomo Back From Brink

them for all types of parts mfg. including parts for racing engines. Delco auto and home radios were also a large industry there. Indianapolis once manufactured "other" goods as well..RCA, Curtes-Mathes, Western Electric made phones for the US,Jenn-Air did and does manufacture kitchen appliances. Indiana glass became big when large deposits of Natural gas was found, Studebaker autos were made in the north, Caskets are manufactured in the south, Indiana furniture was once a large brand. Subaru is made in Lafayette. Toyota is made in Princeton- Ft Branch. Ft Wayne has always been important in metal manufacturing, Elkhart was one of the largest motor coach manufacturers, Gary, had and lost a huge steel mill industry. Ball glass was born in Muncie.. and this is just a rudimentary illustration of a 'one industry state (and town).' Answer- where did the jobs GO?? Guess. Unemployment has ranged from 11% to about 9.5% currently. Now- what was that about "depending on one industry??' 23 NOV 2010 9:39 PM FAVE



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dnegri SUPER USER · 1,286 Fans


E-Mail I sent tonight to NBC Nightly News: Today the President delivered a speech at the Chrysler plant in Kokomo. Kokomo's downtown has been revitalized by the stimulus. The Chrysler plant working thanks to the loans (and the company announced an additional $800 million investment there today). Unemployment in the city down 8 percentage points. A showcase contrasting what Obama did as opposed to what the Republicans would have done. Which is to let them both "go under". I didn't expect Fox News to cover it, but hoped you would tonight. Nothing. People ask why much of what Obama has accomplished is unknown to the public. You just gave the answer. 23 NOV 2010 10:11 PM FAVE


nannews 1,743 Fans

· Frances Perkins would weep...[1/22/2014 12:01:08 AM]

Auto Industry Bailout Pulls Kokomo Back From Brink

Good for you! You're setting an example for all of us to become more proactive in getting the word out...and prodding the media to do their part. Already a a big fave..and thank you! 23 NOV 2010 10:26 PM FAVE


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Peter B. (Brokenduck) SUPER USER · 316 Fans

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My great grandfather helped Elwood Haynes push his car up the street there in Kokomo. Glad to see that things are looking better there. 23 NOV 2010 3:15 PM FAVE


Tim B. (timmmahhhh) SUPER USER · 356 Fans

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Very cool - having grown up in Kokomo I know exactly who you speak of! I wish the people there would better appreciate Obama pushing their industry back up the hill. 23 NOV 2010 5:37 PM FAVE



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goodmarina 3,138 Fans

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the Auto Bailout program saved ONE town or city -- it saved more than just an industry. This move kept restaurants open, small businesses open, industries going, schools open, public offices open, roofs over people's heads, it put food on family tables, saved jobs (public & private) & more. This is an American story that any patriotic American would celebrate! 23 NOV 2010 7:20 PM FAVE

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Auto Industry Bailout Pulls Kokomo Back From Brink

dnegri SUPER USER · 1,286 Fans

One million jobs created or saved by the "bailout". 23 NOV 2010 8:06 PM FAVE



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lmunoz SUPER USER · 118 Fans


This is a great example of what I see as Obama's greatest success. The auto industry bailout is an example in which Obama went up against conventional wisdom and fake republican outrage and took a very public stand at big political risk to himself since there were no absolute guarantees that the industry would be able to repair the damage. Against republican accusations of nationalization, socialism, big government intrusion bla bla, he drew a line at the beginning of the debate and said that he could not let the industry go down without giving it a last chance at restructuring. He saved thousands of jobs and invigorated economic growth and did not let his opposition dictate the narrative or frame the debate because he knew it was the right and necessary thing to do. And, alas, success! I believe that this is the president Obama that progressives wish Obama to be on other fronts, in this instance he was decisive, strong, used the bully pulpit to defend his position and was able to make it happen without asking permission from Boehner and co. This success story shows the difference when the president is the leader and not the follower of those who wish more than anything to take him down. And those in Kokomo and Detroit whose livelihoods were saved whether conservative or liberal, will no doubt take notice of this achievement. Progressives will rally with the president when you find your inner voice again and fight the necessary fight! 23 NOV 2010 8:39 PM FAVE


Michael7 86 Fans

According to the republicans, the Recovery Act created "NO" jobs, was a waste of money, and GM & Chrysler should been left to die. Well, I guess having your unemployment rate drop 8% over two years is a bad thing[1/22/2014 12:01:08 AM]


Auto Industry Bailout Pulls Kokomo Back From Brink

according to the republicans because it didn't drop to 5%. Hey Indiana residents! The Democratic, socialist, Muslim, Kenyan born, communist, Martian President along with his Democratic Party friends saved your state from bankruptcy! And the All-American, Republican, white male, Christian, conservative, Chamber of Commerce loving political party would have let your state die a financial death. So who did you vote for in the mid-terms? Yeah, we know and how's that Tea Party working for you now? 23 NOV 2010 11:08 PM FAVE


marilyn_63 1,402 Fans


good for you Michael. yeah how is that working out for them. called him every name in the book. and he still had to help them up off their knees wow!! fanned and fav 23 NOV 2010 11:18 PM FAVE


Rich F. (grf67)


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Why do people continue to vote for the repubs who clearly hate Americans. 23 NOV 2010 3:37 PM FAVE


BPCentrisAmerican 1,182 Fans

These stupid trolls hate Americans, there contempt for this country is bottom up, there isn't a redeeming quality in the whole pathetic lot of them. 23 NOV 2010 4:20 PM FAVE


Bob F. (Tunghoy) SUPER USER 路 937 Fans

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And yet, geniuses in Indiana elected uber-lobbyist Dan Coates to the Senate. The state went blue in 2008, let's see what happens in 2012.[1/22/2014 12:01:08 AM]

Auto Industry Bailout Pulls Kokomo Back From Brink

Keep in mind about the people "crying in the hallways" of the church going to the food pantry for the first time: their money went into the pockets of Dick Cheney and the other war profiteers and Wall Street tycoons who nearly bankrupted America. 23 NOV 2010 3:49 PM FAVE




551 Fans

Folks don't say this too loud, the Republicans will blame the Socialist in the White house for your success. 23 NOV 2010 4:13 PM FAVE


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Auto industry bailout pulls kokomo back from brink