Elkhart County, Indiana, the poster child for the recession, showing signs of recovery

Poster child for recession shows signs of recovery

ELKHART, Ind. — When Ed Neufeldt introduced Barack Obama at a speech in Elkhart County in February, the new president promised the laid off RV worker would find a job.

Since then, Neufeldt has found two, setting up bread displays in grocery stores and working with a company that hopes to hire hundreds of people to make electric motors.

“If I was on unemployment, I’d be bringing home more money than I bring home from both jobs,” said Neufeldt, 63, of Wakarusa. “But that’s OK, I want to work and I feel like I’m helping the economy a little not being on the unemployment ranks.”

Obama has visited the northern Indiana county four times — twice during the 2008 campaign and twice since — focusing attention on the area as emblematic of the nation’s double-digit unemployment woes.

Now, hope is rising in the struggling area as people head back to work — though not always at the same jobs they left, and sometimes for less money.

The unemployment rate here, driven by job cuts at factories that made Elkhart County the capital of recreational vehicle manufacturing, spiked in March to 18.9 percent. But it has fallen steadily since, reaching 14.5 percent in November while the national rate climbed to 10 percent.

Part of the drop in unemployment may be due to hiring at a handful of RV makers like Heartland RV in Elkhart, which recently held a job fair after announcing it would add 400 jobs by March. For jobless workers who have spent months scrimping to keep up with mortgages, the job fair was a welcome first step in returning to the life they used to know.

“Unemployment is livable, but it’s not like how we were living,” said Marcia Blanton, who lost her job at RV maker Monaco Coach in September 2008. Blanton, 53, of Elkhart, briefly landed a job at a musical instrument factory before being laid off again a year later. She was still waiting to hear from Heartland about her application weeks later.

Other RV makers also have begun hiring, albeit slowly, as orders from dealers have picked up in the past few months. Dealers don’t generally discuss sales figures, but two economists who follow the industry have predicted a slight rebound in production for 2010.

Gulf Stream Coach and Electric Motors Corp. announced in May they plan to spend more than $80 million on building renovations and equipment for factories in Wakarusa and Nappanee. The companies estimate the project could have 1,600 workers by 2012.

“I don’t think there’s any question that jobs are up,” said Morton Marcus, a retired Indiana University economist who recently conducted a study for the Elkhart County Economic Development Corporation that forecast an upswing in the RV industry.

Still, some of those who have gone back to work are making less money.

Doug Hartzell, 59, of Nappanee, was rehired as a temp worker at the new Monaco RV in September after the old company’s assets were bought by Navistar International Corp.

“I really did make an effort to find a job in those 12 months I was off and it was kind of discouraging after a while when you go door to door and you don’t even get a chance for an interview,” he said.

He said he’s fine with working 9 1/2- to 10-hour days, even for the smaller paycheck.

“I’m just glad to have a job,” he said.

More jobs could be on the way in other industries as well.

Band instruments, office furniture, steel tubing, plastics and agricultural testing supplies are also made in Elkhart County.

Dorinda Heiden-Guss, president of the county development corporation, said the county has seen an “onslaught” of business interest since visits from Obama and former Arkansas Gov.-turned-Fox News commentator Mike Huckabee.

“People seem to know about Elkhart County,” Heiden-Guss said.

In the past year, about $134 million worth of new projects entailing 3,300 new jobs have been announced, she said.

Upstart Electric Motors Corp. has moved into a former RV showroom in Wakarusa, where CEO Wil Cashen hopes to hire hundreds of workers to produce drive trains for electric-hybrid vehicles. Companies like Gulf Stream would install the engines. It’s one of three electric vehicle projects involved in or eyeing the county.

Profitability will take some time — Electric Motors’ business plan projects million-dollar losses for the first two years before turning a $21 million profit in 2011.

Still, Cashen, a northern Indiana native, is a big believer in Elkhart County and its down-to-earth work force.

He was so taken with Neufeldt’s speech introducing Obama in Wakarusa that he hired him as a company spokesman. There isn’t much speaking to do right now, so Neufeldt does odd jobs around the mostly empty building and the nearby Nicola Tesla School of Technology, where Cashen intends for employees to be retrained to work with electric motors.

“Elkhart is a kind of a sleeping diamond,” he said. “It’s an absolute diamond in the rough.”

Amid the signs of hope, there are still plenty of reality checks.

Thousands remain out of work — nearly 14,000 in the Elkhart-Goshen metropolitan area alone in November. Social services agencies like Church Community Services, a food pantry near downtown Elkhart that serves 2,000 families a month, say they’re still seeing intense need.

“We haven’t seen the bottom yet,” director Dean Preheim-Bartel said.

But despite lingering skepticism among some in Elkhart County, many believe that this poster child for the recession will one day become a symbol of recovery.

“If it’s going to happen, I think we’re going to be the first to see it happen,” said Heiden-Guss, the president of the economic development corporation.