As GM and Chrysler stood on the brink in 2008, analysts from Brookings Institute and the Center for Automotive Research told a forum in Indianapolis that a bankruptcy and liquidation could have cost up to 150,000 Indiana jobs - including 40,000 at GM - and billions of dollars in wages, as well as personal and corporate tax revenue. According to a white paper released by U.S. Sen. Joe Donnelly, Indiana had 102,000 workers in the auto industry, or 5 percent of the total workforce in 2008. Within a year, 30,000 of those jobs were gone.
Asked where Kokomo would be now without the auto rescue, Mayor Greg Goodnight observed, “It’s hard to say, but we’d be in much worse shape. How much worse is anyone’s guess.”
Today, 102,000 Hoosiers are working in the auto industry, back to 2008 levels. At GM, Chrysler, Honda, Toyota, Subaru and Cummins Engines, the direct employment is 31,703. Scattered across the Hoosier prairie and dozens of cities and towns, more than 70,000 of us produce auto parts and sell cars at dealerships. Factor in the multipliers -businesses ranging from restaurants to construction, to services - and you see the huge impact of the industry.
It is hard to calculate where Indiana’s economy might have fallen had GM and Chrysler liquidated. Some brands of the two companies such as Jeep would likely have survived. But Indiana’s jobless rate spiked at 12 percent in 2009 - rose to close to 20 percent in Kokomo - and stayed in the 8 percent range up through this autumn. Had 150,000 Hoosiers been forced out of work, Indiana’s economy certainly would have sunk into depression.
Today, these six companies mentioned have invested in the $2 billion range in Indiana facilities, including $1.6 billion at Chrysler’s Kokomo complex and $467 million at GM plants in Bedford, Marion, Fort Wayne and Kokomo.
The decisions Obama made in 2009 - initially pumping in TARP funds, rejecting an outright bailout in the spring, forcing an expedited bankruptcy that summer and a restructuring that saw Chrysler merging with Italian automaker Fiat and the UAW pension fund gaining partial ownership - were controversial here in Indiana, even with so much investment and legacy.