13 WTHR - Indianapolis News |Mayors hold roundtable on auto industry

Mayors hold roundtable on auto industry

Rich Van Wyk/Eyewitness News

Indianapolis - An auto industry failure could have a far-reaching effect on Indiana - far beyond the jobs lost by auto workers.

Cities and towns with the most to lose are talking about the statewide impact of the crisis, trying to win Hoosier support for an industry rescue package.

A collapse of the auto industry, a study by the Washington based Economic Policy Institute predicts, would throw Indiana from recession into a depression. The economic impact of a Detroit Three shut down, rippling from auto plants to their suppliers and other industries as varied as housing, retail, and healthcare, claiming as many as 147,000 jobs.

"That is up to 5% of total employment in the state. That is nothing short of catastrophic," said the EPI's senior economist, Robert Scott

If its GM plant were to close, the city of Marion figures it would lose half it's tax revenue, jeopardizing city services.
 
"We are here to let you know if this industry goes down, we are not sure we can pick up the pieces," Mayor Wayne Seybold explained.

The mayors of Marion of Kokomo, cities heavily dependent on the auto industry, called a meeting of economists, lawmakers, mayors and other community leaders. More than finding solutions, the purpose is to galvanize support for an auto industry rescue plan.

Representative Joe Donnelly (D-2nd District) says he's fighting misconceptions of the $17 billion plan some call a bailout.

"It is a loan. A loan that will be repaid with interest and that the government will actually make money on," insists Donnelly.

The United Auto Workers Union, criticized for costly wages and benefits, says it will agree to money saving measures, in addition to those already made.

"Nine of the 10 most efficient automobile assembly plants in North America, nine out of ten are union plants," said UAW Region 3 director Maurice Davison.

The mayors want other communities to realize the statewide impact of the crisis.

"We are all in this together and it's more than a city or regional issue," said Kokomo Mayor Greg Goodnight.

Supporters of the rescue loans insist the Detroit Three wouldn't be in the trouble if it weren't for bank failures, falling stock prices and record high gas prices.

Foreign automakers are struggling as well. Toyota announced it an operating loss of $1.7 billion dollars this year, its first reported loss since the 1940's.