Auto town on the mend, but bailout still divides

February 27, 2012 RSS Feed Print

The center reported in 2010 that the bailout had saved 1.1 million jobs in 2009.

"It may not have been exactly the right way to do it, but it had to be done ...," Cole adds. "It really was too big to fail."

The auto bailout had winners and losers. Some towns lost plants; Kokomo's were saved.

"I feel we were given a lifeline," says the mayor, who thanked the president when he visited Kokomo in 2010. "But do we now sit back in our easy chairs and say Chrysler's good for the next five, 10 years? No. ... We can't become content with just that. This is our chance to build on top of it."

There's much building to do. Unemployment in Kokomo — home to nearly 57,000 people — tops 10 percent and a network of local food pantries serves 1,100 families a month, mostly in the city, compared with 400 in the pre-recession days. Home foreclosure sales remain high.

But the real estate market is stronger; the average housing price in recent months has topped $70,000. The United Way's community campaign last year raised almost $1.8 million — $80,000 more than its goal. More than 20 businesses have opened or expanded since 2010.

A new regional Fed Ex hub is due to open soon. Local and federal funds have been used to improve downtown, launch a public transit system, build a park pavilion, buy foreclosed homes, rehab and sell them to low-income buyers, then use the proceeds to demolish an abandoned factory and build townhouses.

And yet, there's still a wariness among some autoworkers.

"I think it's too early to say that it's completely worked," says Brian Hecht, an 18-year Chrysler veteran and third-generation autoworker. "We need to prove to the taxpayers their loan to us was a good thing to do."

Chrysler and Fiat have paid back all but $1.3 billion of Chrysler's $12.5 billion bailout. And the government has recouped more than $22 billion of its nearly $50 billion GM bailout, after agreeing to take stock in return for most of its investment.

It's that kind of record that makes McKinley, the Chrysler engineer, wonder why there's still any debate.

"At this point," he says, "how could anybody argue that it was the wrong thing to do, because it worked."

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Sharon Cohen is a national writer for The Associated Press. She can be reached at features(at)ap.org.