Local economy 'mixed'

Oct 09, 2008 (The Tribune - McClatchy-Tribune Information Services via COMTEX) -- TM | Quote | Chart | News | PowerRating -- Ninth District Rep. Baron Hill has spent the past week trying to get a handle on how the financial meltdown is affecting Hoosiers by talking to some of the 675,000 people in his 20-county district.

"The general sense I'm getting is that the local economy here is not that bad, but there are some worries and concerns," Hill told a group of business and financial leaders Wednesday in Seymour. "By and large, I'm hearing things are good here in southern Indiana."

Jim Plump, executive director of Jackson County Industrial Development Corp., told Hill the county holds a "mixed bag" of economic news.

"There are some looking at significant expansion with some new hires, and there are others that have reduced and are treading water to see if they will get through the election and next year," Plump said. "Three companies have closed this year."

That's not completely bad news, Plump said, because it has freed up employees for companies that are hiring.

"There are some good people out there if you are hiring," he said. That contrasts with the local economy a few years ago when skilled workers were hard to come by," Plump said. "It's a day-to-day proposition (for some)."

Joe Deppen, who heads Home Products International in Seymour, questioned Hill about his "no" vote on the government's bailout package.

"It's disappointing," he said of "no" votes cast by Democrats and Republicans. Hill voted twice against the bailout package in the House.

Deppen said companies such as his must borrow money in the short term for operations.

Deppen said the issue needs to be dealt with, but not in haste. That was Hill's conclusion, as well, but he stressed he voted "no" on the second proposal because of $150 billion in earmarks or pork barrel spending added to the bill.

Deppen said Home Products, which manufactures ironing boards, had a nationwide market and has an 8 percent market share.

"Our business is down probably 8 to 12 percent," he said. The business had been growing strong during the summer before slacking off in September.

Hill said he voted no against the first bailout proposal because he had concerns things were moving too fast.

"I thought there were other ways of doing it," Hill said.

One thing the government could have done was shore up people with bad loans teetering on the edge to make sure they didn't tumble, Hill said. A second would have been a worldwide investment rate, he added.

Hill said every economist he talked with about the issue agreed that if something wasn't done, the economy would slip into a depression.

"It would be a mistake to let that happen," Hill said. "We don't need soup lines. I also think we need to be careful instead of rushing to judgment."

The experts are telling him that the present economic problems are going to last 12 to 18 months, Hill said.

Keith Warf with Aisin U.S.A. Manufacturing Inc. said the downturn has hurt that automotive-parts supply business because Toyota is not selling as many vehicles and is retooling for a new line.

"We've had about a 20 percent sales decrease and reduced our workforce approximately 300," Warf said.

The company has been able to accomplish the reduction through its temporary work force, Warf said.

He added the company expects things to ramp back up by the end of the year, but it is not known whether sales will go back to where they were before the downturn.

Hill said he thinks there is a fundamental shift in the way people look at purchasing their automobiles because of the increased cost of fuel.

Bob Tabeling with Wal-Mart Distribution Center said that company sometimes borrows money on a short-term basis to get through the holiday season, but added he didn't think that would happen this year.

Dave Geis with Jackson County Bank said the bank continues to have money to loan.

"Commercial-retail has slacked off significantly," Geis said. "Residential (lending) remains OK."

Hill said he thinks the "big guys" are the ones who created the current mess and they need to be held accountable.

Bud Walther, director of Community Foundation of Jackson County, said he was concerned that continued volatility in the stock markets will harm charities and foundations, risking the amount of money that foundations can invest in their communities through grants.

In a column on today's Opinion page (Page 4A), Walther points out, however, that the bailout plan provides an incentive for Americans to invest in Charitable IRAs.

"This new law is a boon to our local charities that are experiencing the effects of a tough economy," Walther said.

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