Laura Sheets, chair of the board of the Greater Kokomo Economic Development Alliance, sensed that worry when she headed United Way's community campaign in 2009. Knocking on the doors of businesses for charitable contributions from workers, "there was such a dread, so much uncertainty," she says, "no one wanted to say what they were thinking. No one wanted to verbalize how bad things could be."
It wasn't as if Kokomo could instantly transform itself. "How do you replace that big of a footprint?" she says. "People would say, 'How could you be so dependent on one industry?' But that's what we do."
The trouble, though, extended beyond autos. A pottery plant had already moved to China, eliminating 150 jobs. The housing crisis had taken hold, too. In 2009, 40 percent of home sales in Kokomo were foreclosures, says Paul Wyman, owner of a real estate company and a Howard County commissioner. At its worst, in the first quarter of that year, average home sales plummeted to about $30,000, compared with $110,000 in the previous two years.
"We saw a lot of fear and some sense of hopelessness," says Judy Dennis, director of the county's Family Service Association, which set up a foreclosure prevention counseling service. "There was a panic. We had so many people calling afraid they would lose their jobs. ... The feeling was, 'Am I going to be next? What will I do? Where will I go?"
For Brian McKinley, a 42-year-old Chrysler engineer, those questions took on new urgency. He was already dealing with a divorce, the death of his mother, a pay cut and a layoff as the plants closed their doors during the bankruptcy.
"I didn't know if I was going to ever have my job back," McKinley says. "Everything looked bad in every direction. There didn't seem to be much opportunity to go anywhere or do anything else because the whole country was in bad shape."
He also wanted to stay put to be near his two children. "There wasn't a choice," he says.
Visiting reporters would ask Mayor Greg Goodnight: What are you going to do if the bailout and bankruptcy fall through?
"It's kind of like someone asking me what would you do right now if we had an earthquake, a tsunami and seven bank robberies at the same time? You do what you have to do," he says. "But I can't think of a worse-case scenario, economically."
Goodnight, a Democrat, knew some folks disapproved of the bailout. Once, a drug store clerk told him the government should let the automakers fail. "I said, 'Look out the window. Who do you think helps pay for these roads, these street lights ... who do you think pays for our schools, our teachers?'"
Chrysler, Delphi and GM account for up to 20 percent of the city's revenues directly from property taxes, he says, and that doesn't take into account taxes paid by their workers.
"Why anyone in a logical sense would ask for the largest employer in their community to be liquidated ... is not thinking rationally," he says. "At some point, government has to be the stabilizer."
This wasn't just a Democratic attitude. Wyman, the county commissioner, compares the auto meltdown to Hurricane Katrina — both of them catastrophes demanding extraordinary measures.
"As a Republican, I can tell you I'm for smaller government every day of the week," he says. "But there is one thing I expect from the government and that is for government to respond to a major crisis. ... It worked and now the government should get out."
Wyman points out that a Republican — former President George W. Bush — approved $17.4 billion in bridge loans to Chrysler and GM after Congress failed to approve emergency aid. (Bush recently defended his action, saying "sometimes circumstances get in the way of philosophy.") The automakers had to develop restructuring plans once Obama took office.
Both presidents, Wyman says, deserve credit.
"If it had gone the other way, our community would have been devastated," he says. "In hindsight, it was the right thing to do."
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