Downturn has many struggling to survive

WAKARUSA, Ind. – In this corner of America known as the RV capital of the world, Todd Brink once made a good living producing the gleaming behemoths that cruised the nation’s open roads. He was prospering. So, too, was the industry.

Then hard times arrived for him – and now, for many makers of recreational vehicles.

First, Brink ran into trouble after his mortgage payments skyrocketed and his savings dried up, forcing him to sell his house last year and move his family to a cramped $300-a-month trailer. Then this month, Monaco Coach Corp. closed its plant here, leaving him without a job.

Battered by tightening credit, soaring fuel prices and slumping sales, RV companies have laid off thousands of workers in the last several months, many here in north-central Indiana. And Brink – part of the closely watched blue-collar voting bloc in the presidential race – is now trying to figure out how survive.

“I always had a cushion – $2,000-$3,000 – in the bank. Now that’s gone,” says the 38-year-old Brink, who worked at Monaco on and off over 14 years. “I had a job that paid enough to support my family. Now I don’t. This just knocks the wind out of your sails. … You don’t want to get up at age 50 and have nothing.”

“I’m scared,” adds Brink, the sole breadwinner for his wife and their four children (the oldest is 10). “I just fear not being able to provide for my family. All the weight is on my shoulders.”

Economic anxieties about unemployment, Wall Street’s collapse and the specter of a recession have sent a chill through this quiet stretch of middle America. Folks here fret about high prices: $3.79-a-gallon milk, $4-a-gallon gas. They mourn the loss of good-paying jobs. And they’re skeptical that either presidential candidate – Barack Obama or John McCain – can relate to their troubles or deliver on their promises.

“They’re all playing on our fears now,” says Jody Baugh, a welder who lost his job when Monaco closed here this month. “If one of these people lived like we do for a week, they’d have a whole different outlook. They just don’t have a clue … the day-to-day struggles – keeping a car running, a roof over our heads, a decent job.”

For both workers, the job losses were the latest in a string of financial setbacks. Both had adjustable rate mortgages that rose dramatically in recent years (Brink sold his house in 2007 after his payments jumped from $670 to $1,050 a month).

Baugh, 40, was caught in a larger economic vise: rising home insurance costs, the drain of routine medical bills and the burden of helping two of his four daughters in college.

“If you’ve got a family of six and they expect you to make it on $10 to $11 an hour, you just can’t do it,” says Baugh, his voice rising with frustration. “The older you get, the harder it is to get a job, right? You have to worry that you’re going to settle for something you wouldn’t have thought about five or 10 years ago.”

Both Obama and McCain are scrambling to woo struggling blue-collar workers all across the hotly contested Midwest. With less than six weeks before Election Day, one recent set of polls showed the candidates running almost even in seven battleground states – Indiana, Ohio, Michigan, Wisconsin, Pennsylvania, Iowa and Minnesota.

Unemployment remains higher than the national average in some of these states; pockets of this region have been suffering for decades, turning towns such as Flint, Mich., Gary, Ind., and Youngstown, Ohio, into symbols of the declining fortunes of the industrial Midwest. Both candidates have targeted this area with frequent visits, including an Obama stop in Flint, and a McCain appearance in Youngstown.

Though manufacturing is still a vibrant part of the U.S economy, more than 4.2 million jobs have been lost from March 1998 to this August, according to Robert Scott, a senior international economist at the Economic Policy Institute.

What has changed in the last decade, he says, is a growing range of jobs is disappearing – not just auto and steel, but electronics, machine tools and software, accounting and call centers moving overseas, he says.

“Twenty years ago, there was a way for people to secure a middle-class living with good jobs and good benefits,” Scott says. “Right now, most of those pathways are gone.”

“It’s harder to find a manufacturing job and hold on to it,” he adds. “It can be done, but it’s much tougher. … You’ve got some trees that are growing, but the forest is shrinking.”

Indiana alone has lost 148,400 manufacturing jobs – 22 percent of the total – since 2000, according to state officials.

The RV industry has suffered in this latest downturn as demand for RVs and motor homes (high-end models can cost hundreds of thousands of dollars) has dropped sharply. Shipment of the vehicles to dealers is projected to fall by 24 percent by the end of 2008 compared with a year ago, the biggest decline since 1982, according to industry officials.

And in Indiana, nearly one in four RV workers was unemployed in August – either temporarily or permanently, state officials say. The federal government recently announced a $10.4 million grant to help retrain displaced RV workers.

Obama hopes to tap into the frustrations of blue-collar workers to help push this traditionally red state into his column – breaking a 44-year history of Indiana voting Republican in presidential races.

He’ll face a formidable task here in Elkhart County, where President Bush defeated Sen. John Kerry by nearly a 2 1/2-1 margin in 2004.

But with an unemployment rate of 8.9 percent in August – compared with 6.1 percent nationally – Obama’s call for change resonates with Baugh, the laid-off welder.

He’s leaning toward the Democratic senator, but says he wants to be sure he’s choosing someone “who’s going to help me and my family and my co-workers to have a life like we used to have. … They’re going to have to help the middle-class or I’m not going vote at all.”

McCain has support, too. Local hardware owner Kenny Twa, for instance, says he relates to the Republican senator because they’re both “ornery.” Others admire his military service.

But some voters here wonder how much impact a president can have on the country and the economy.

Terry Swihart, who was laid off from Monaco this spring after 28 years, says no one in the White House could have stopped Monaco from closing.

“Unless someone can come in and cut taxes and do something about our health care system, nothing is going to change,” she says. “If you want to fix the Social Security system, put every politician in it.”

Swihart now works as a purchasing agent at another factory, but it’s part-time and she earns a third of her previous salary. She worries about rising health care costs. Her 56-year-old husband, Jim, who also lost his job at Monaco, had his spine fused three years ago and has two artificial hips and knees.

Together, they pay nearly $900 a month in premiums under COBRA, a federal act which allows certain employees to continue their previous health insurance coverage – usually for 18 months – after they lose their jobs.

“We bailed out Fannie (Mae) and Freddie (Mac),” she says of the mortgage giants, “but who’s going to bail us out? … As more things fail, are we going to continue to bail them out without learning anything?”

Those kinds of questions are batted around during the morning coffee klatch at Cook’s Pizza, a cozy restaurant where the regulars gather, serve themselves, plunk down 50 cents for the owner – and proceed to analyze everything from town business to the global economy.

Talk politics here and folks here will tell you: They’re tired of the bitter partisanship on Capitol Hill. They’re amazed by the costs of a presidential campaign. And they’re suspicious of the candidates’ rhetoric.

“We’re not getting the best politicians to rise to the top. It’s a pretty-boy contest,” says Dean Ferguson, an insurance agent, sipping a steaming cup of coffee. “They’re figuring out the answers everyone wants to hear.”

And when it comes to Obama vs. McCain?

“I don’t think either of them can do what they say,” says Phil Bowers, a retired auto mechanic.

Not surprisingly, politics has taken a back seat, at least temporarily, with the closing of the Monaco plant on Sept. 17. Wakarusa, population 1,600, said farewell to what had been it biggest employer (before the layoffs began) and an industry that had supported generations of residents.

Faced with declining demand, Monaco, the latest in a long line of owners of the RV plant here, notified workers in July that it was closing three northern Indiana factories, idling about 1,400 workers. Nearly 1,000 were in Wakarusa.

“It was a very difficult decision for us to make,” says Craig Wanichek, a spokesman for the Oregon-based company. He says the plant will keep a small administrative staff, and the building will be put up for sale. Monaco still has other operations in northern Indiana.

The RV industry has weathered ups and downs before – the locals can rattle off the bad years from memory – but the plant closing surprised Tom Roeder, the town manager.

“Five years ago, I would have almost bet my right arm that they would have never left,” he says. “It was quite a shock. … It’s a tragedy for our community.”

Monaco was the first door local charities knocked on when they needed help. And it was a place that job seekers headed to if they wanted to earn some of the highest wages ($16-$18 an hour) in town.

It’s too soon to know what the full impact will be in this quintessential small town where American flags flutter from lampposts, the local candy shop, which sells and ships tons of giant jellybeans, is called The Dime Store and a bench outside Cook’s Pizza welcomes all comers with a “Bench Bums” sign on the wall.

None of that will change, but already, there are signs of strain.

A food pantry six miles away has seen more than a 30 percent increase in traffic, reflecting Monaco’s closing and layoffs at other RV plants.

The regulars at Cook’s are optimistic there will be a rebound, but in the meantime, there are bound to be losses with 1,000 Monaco workers gone: Less business for shopkeepers. Smaller lunchtime crowds. And for those who call Wakarusa home – fewer than 100 plant employees – an uncertain future.

“The harder issue is how to deal with the houses that may be up for sale, the businesses that may struggle more, the school system that may have less kids,” Roeder says. “We’re all their neighbors. We see them in church. We go to ball games with them. We know them. It’s just sad. … It’s probably the end of an era.”