Bankruptcy Hits Home in Auto Heartland
Friday, May 1, 2009
KOKOMO, Ind., April 30 -- The big-screen TV over the bar at Buffalo Wild Wings was tuned Thursday to ESPN when four Chrysler employees took seats at a nearby table.
Rick Ward, a 21-year Chrysler employee here who sports a long braid, a beard and half a dozen tattoos, politely asked the crowd whether they would mind switching channels to hear the president's speech.
No one complained. After all, roughly half of Kokomo's economy depends on the four Chrysler plants that make transmissions for trucks, sedans and Jeeps, and the molds to hold them. There's also a Delphi parts plant in this city of 46,000 that has had a hard time, as it struggles through a bankruptcy.
There was little conversation as President Obama took to the air to vow that the government would turn Chrysler around. He blamed a small group of hedge funds for the fact that the company would have to spend time in bankruptcy.
After the speech, Ward and the others rehashed what they had heard, some glancing at notes they had taken.
"He could have forced the banks to accept a better deal, rather than forcing us to go into bankruptcy," said Steve Brooks, a 39-year-old former Marine who has worked for Chrysler for 13 years.
Ward, 52, fired back: "I don't think he's forcing us." Another 21-year Chrysler employee, John Thompson, 44, chimed in, "He wants to make hedge funds accountable. It's time he put a check on them."
"Some people thought he was turning his back on us," Ward said. "But he made it clear today, 'I don't stand with hedge funds.' "
For all of the support of the president, though, it didn't take long for the reality of the new phase to settle in. The workers started to receive text messages with news that factories may be closed for 30 to 60 days, as the restructuring details are worked out.
Chrysler said it sent workers home from at least two factories in the Detroit suburb of Warren, Mich., because parts suppliers have stopped shipping after the bankruptcy filing. Vice chairman and president Tom LaSorda said in a conference call Thursday that the company had no choice but to close the plants, which make parts for or assemble the Dodge Ram pickup truck.
Kokomo has already been hit hard by the industry's struggles.
Delphi's workforce has shrunk from roughly 14,000 workers to 3,200. And the number of employees at the Chrysler plants have dropped from about 7,000 to 3,000, according to union officials. The unemployment rate is hovering around 14 percent. Foreclosures are up. More small businesses are closing, restaurants are less busy and furniture sales are sluggish.