Published: May 22, 2009 04:10 pm      

In the darkest days for Indiana automakers, there is light

I found a room of skeptics when it came to President Obama as I talked to the Wabash Kiwanis Club recently. He carried only 40 percent of the vote here last November. Many in the audience see Obama as a “slick” orator and media creation with little substance. This city of 11,000 has lost several hundred jobs from auto supplier firms like G&S Metal and Alaris and its unemployment rate is over 8 percent. Many folks commute to find work in other auto towns like Fort Wayne and Marion.

As I spoke, Obama was holding a press conference in Washington, announcing new fuel and emission standards.

The impact for Indiana could be dramatic. We are in the midst of the darkest days of our auto sector, where 140,000 Hoosiers had been working. Chrysler is going through bankruptcy and closed 15 dealerships last week. General Motors is headed that way with company officials talking about “frightening days” just ahead. Driving through Kokomo, the three Chrysler transmission plant parking lots were empty and eerie. Delphi is tethered to GM and, after four years of bankruptcy, is teetering on the brink.

Wabash didn’t lose a Chrysler dealership, though others were lost in nearby Logansport, Warsaw, Columbia City, Fort Wayne, Elkhart, and Monroeville — some impacting more than 100 employees and vendors. GM’s dealership closings are coming (Wabash has two) as cities and towns across the state brace for that news.

The worse case scenario I’ve been writing about since last November is now upon us. We could see Indiana’s unemployment rate jump from the current 10 percent to the 12 to 13 percent range by the end of the summer.

And yet, there are glimmers of hope.

First, after decades since the first oil shocks, the warnings of Presidents Nixon and Carter that we must break our dependence on foreign oil have finally sunk in. After eight years of the Bush-Cheney Oil Presidency where there was no cohesive energy strategy and the results of $4.20 a gallon gas a year ago set off this catastrophic chain of events, Obama has filled the void. By 2016, passenger cars must get 39 miles per gallon and light trucks 30 mpg. It took an auto sector collapse to lead to this point.

Surrounded by executives from GM, Ford, Chrysler, as well as automakers from Germany and Japan, Obama said it was “tragic” that so little had been done to make more fuel-efficient cars, as too many Indiana families now know.

“Calls for action rise and fall with the price of a barrel of oil,” Obama said. “As a result, we have done little to increase the fuel efficiency of America’s cars and trucks for decades.”

In the meantime, computers have become faster, workers more productive, and Obama asked Americans to “imagine a world as it could be.”

He answered, “If you buy a car, your investment in a more fuel-efficient vehicle as a result of this standard will pay off in just three years. In three years’ time you will have paid off the additional investment required. So this is a winning proposition for folks looking to buy a car. In fact, over the life of a vehicle, the typical driver would save about $2,800 by getting better gas mileage. The fact is, everyone wins: Consumers pay less for fuel, which means less money going overseas and more money to save or spend here at home. The economy as a whole runs more efficiently by using less oil and producing less pollution. And companies like those here today have new incentives to create the technologies and the jobs that will provide smarter ways to power our vehicles.”

Only six vehicles offer fuel economy of at least 35.5 mpg: Toyota Prius, Honda Insight, Honda Civic hybrid, Ford Fusion hybrid, Mercury Milan hybrid, and the Smart fortwo microcar. Only the natural gas fueled Honda Civic GX — which runs 90 percent cleaner than the current fleet and gets 24/36-mpg city/highway — is made in Indiana at Greensburg.

So we are at a pivot point and there is green poking through the Hoosier auto culture. Electric Motors Corp. announced a 1,600-employee plant coming to the Wakarusa/Nappanee area where it will make hybrid components for the magnificent Ford F-150 and other vehicles. EMC chief executive Wil Cashen described to the Elkhart Truth and MSNBC that his company would be the “conductor” for an “orchestra” that will produce parts for different hybrids.

New hybrid companies are surfacing in old Hoosier auto towns. Bright Automotive is seeking to make the IDEA, a 100-mpg plug-in hybrid electric car at Anderson where 50,000 annually could be rolling off assembly lines soon. EnerDel is making the lithium-ion battery in Indianapolis that will help fuel the Th!nk City car and other electric hybrids. Others are on the way.

A century ago, Indiana’s internal combustion engine industry formed out of bicycle shops in Indianapolis, a natural gas company in Kokomo, and the Studebaker wagon works in South Bend. Cashen traces the rise of Elkhart County’s RV industry to Studebaker legacy. Anderson has a long history of developing electric components with companies like Delco-Remy and Guide.

Despite the darkness that has descended upon our auto legacy, perhaps we are now seeing the light at the end of the tunnel.

— Brian Howey publishes Howey Politics Indiana online at www.howeypolitics.com.