Assessing: A Samtec employee looks over the product before assembling the connectors and sending them down the line to the next work area. CNHI News Indiana photo
Assessing: A Samtec employee looks over the product before assembling the connectors and sending them down the line to the next work area. CNHI News Indiana photo
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The coronavirus pandemic has changed the Hoosier state in ways that will linger after the immediate threat is over.

As the number of positive cases continue to climb, state and local officials have enacted widespread measures aimed at saving lives.

The most expansive action taken thus far was the stay-at-home order issued by Gov. Eric Holcomb on March 24, when all citizens of Indiana were directed to avoid going out in public for anything other than essential activities. While select businesses have been allowed to stay open, many others have scaled back or shut down entirely.

Restaurants are only allowed to utilize curbside or delivery service. Factories have temporarily ceased operations. Festivals and conventions have been postponed or scrapped.

Such a large-scale recoil has overwhelmed Indiana’s unemployment system. Over 62,000 unemployment claims were filed for the week ending March 21.

The following week, 146,243 Hoosiers submitted a claim. That dwarfed the week prior to the spike’s number of 3,400.

Well over 6 million Americans applied for unemployment between March 22 and March 28, shattering the record of over 3 million that was set just one week earlier.

When a plant closure or large layoff — 50 or more employees — occurs, companies must issue WARN notices to let their workers and the government know in advance. Between June 2019 and February 2020, 29 WARN notices were issued.

Last month alone, a total of 31 WARN notices specifically mentioned the coronavirus, putting 4,975 Hoosiers out of work during the crisis. The impact was not exclusive to any one industry or any particular region, with the effects being felt in the likes of South Bend, Fort Wayne, Indianapolis, Evansville and Charlestown.

Difficult road ahead

While some individual companies have lost hundreds of employees, not every layoff is as significant. Just because the number of employees is smaller, however, doesn’t mean that the financial implications aren’t as weighty.

SoIN Tourism, the tourism bureau serving Clark and Floyd counties in Southern Indiana, has laid off five employees. The move was made in anticipation of income being down 46% as a result of the coronavirus.

“We know that the hotels, which is one of our primary sources of funding, started suffering immediately,” SoIN Executive Director Jim Epperson said. “The occupancy started dropping dramatically as meetings, events and leisure travel were canceled. We haven’t seen it show up in our numbers yet, but I would not be surprised to see single-digit occupancy.”

According to statistics from the American Hotel and Lodging Association, just under 11,000 direct hotel-related jobs in Indiana have been lost during the pandemic, with that number reaching nearly 45,000 for jobs supporting the hotel industry.

Several mass layoffs of hotel workers have been seen throughout the state, including groups in Bloomington, Indianapolis and Evansville.

“As a hotelier in Indiana I have experienced firsthand the cancellations of room reservations, group blocks and meeting space, which has resulted in necessary furloughs and reduced hours for hourly employees,” said Laura Daywalt of Evansville. “Unfortunately, many of the employees that have had a reduction of hours do not have disposable income and rely on their paychecks for food and housing.”

As mentioned by Epperson, when the hospitality industry suffers, the ramifications stretch far beyond hotel employees. The coming months don’t appear to offer any sort of relief.

Major events that boost the Southern Indiana economy, including the Kentucky Derby and Beatles-inspired music festival Abbey Road on the River, have already been postponed until later in the year. All of this factors into the anticipated decrease in available funding, something Epperson said is indicative of troubles being experienced by many business owners in the area.

A thriving tourism and hospitality environment means more foot traffic for bars, restaurants and retailers. In 2018, 4,730 people in Clark and Floyd counties were working because of visitor spending, raking in $108 million from those jobs.

“Something like this happens, and we’re suddenly just trying to help our industry survive,” Epperson said. “It’s really hard to think about what’s going on out there and know there’s only so much we can do to help. It’s damaging to our community that we’ve worked so hard to build, and it’s just breaking our hearts. It’s nothing we want to admit, but it’s definitely a reality that our visitor experience story may change based on who’s left after this. That’s also a condition that’s just unthinkable.”

A similar situation is unfolding in Indianapolis. Chris Gahl, senior vice president of marketing and communications at Visit Indy, said the tourism and hospitality industry has come to a “screeching halt.”

Roughly 83,000 people rely on tourism for their paychecks in Indianapolis, up from 66,000 less than a decade ago. The city had a record 30 million visitors last year.

Always a big draw on Memorial Day Weekend is the Indianapolis 500 and festivities that surround the race, but that event has been pushed back to August due to the coronavirus outbreak.

The loss of tourism dollars because of the virus is already affecting the economy in the capital city. Indianapolis was set to host another set of Sweet 16 and Elite Eight games for the NCAA men’s basketball tournament last month, which would have had an economic impact of more than $20 million. Conventions that regularly meet in the city in April are now shifting to later in the year, including the annual Fire Department Instructors Conference, which Gahl estimated at a value of $35 million.

Gahl said that seeing so many small businesses closed down and workers out of a job due to the coronavirus is “devastating.”

“We want their health — financially, mentally and physically — first and foremost on the minds of our recovery,” he said. “It’s real when you walk in the capital city and see one of the largest convention center’s doors close. It’s real when you walk down our streets and see hotels closed. It’s hard to see. By virtue of people not being able to travel, we won’t know the impact for months to come.”

Shifting gears

Also taking a financial blow from the global pandemic are Hoosier manufacturers.

Last month, it was announced that major automobile plants in the state, including General Motors, Subaru, Toyota and Ford, would temporarily halt production. The closure of automakers caused several component manufacturers to follow suit.

Sizeable layoffs have occurred throughout the state, including at Mitchell Plastics in Charlestown, where Toyota and Ford production lines were halted, sidelining 380 workers. NHK Seating of America, an automotive seat supplier in Frankfort, laid off 883 employees.

But there has been some good economic news in these difficult times. In late March, it was announced that GM would recall 1,000 workers to its Kokomo and Marion plants. Instead of churning out vehicles, the company will assist the health care sector by partnering with Ventec to produce ventilators, which are in short supply for the expected surge in COVID-19 cases in the coming weeks.

The Kokomo Tribune reported the goal is to produce 2,000 ventilators a month, to ship to hospitals and other medical facilities. GM’s initiative is just one example of companies shifting their output to match the needs arising from the pandemic.

Nishikawa Cooper (NISCO), an automotive supplier in Marshall County, has started producing personal protective equipment (PPE) at its facility. In late March, a regional hospital made a call searching for PPE for first responders and health care workers.

Since NISCO already had the equipment commonly used in the garment industry, the company seemed like an ideal candidate to make protective polyethylene isolation gowns. Jerry Chavez, president and CEO of the Marshall County Economic Development Corp., helped get the ball rolling.

Through his role in the county, he said he was already familiar with the capabilities and processes of many big factories like NISCO.

“In this particular case, we were able to get gown samples from the hospital to take to [NISCO] on a Saturday,” Chavez said. “On Monday, they had prototypes ready to be evaluated. They went into production that week for the local area. We were able to get those to the firefighters and response teams in Marshall County.”

Chavez said he was inspired by the engineers’ ability to take a look at the situation over one weekend and have a product ready in less than two days. Enough gowns already have been manufactured to supply every fire department in Marshall County.

If companies have the ability to shift operations to match the demands of the current situation, Chavez said it makes sense that they should do so.

“There are some like NISCO who can retool and repurpose and not see a lot of impact financially,” he said. “There is a need right now. In my mind, what drives that particular conversation is the capabilities of the business — the ability to source the material, then repurpose that to match the need. If you can do that, then it makes sense.”

Not all companies necessarily need to start manufacturing new products. For some, it’s a matter of prioritizing output to meet specific needs.

Samtec, an electronic components manufacturer with headquarters in New Albany, normally produces connectors that wind up in everything from transportation systems to military devices. Those pieces are key to allowing data flow for sophisticated products.

Unlike other companies that have had to shut their doors, Samtec has been deemed critical by the government. That designation is due to the company’s role in the medical device supply chain.

“What’s important now is life-saving medical applications,” said Allen Platt, general counsel at Samtec. “Things like ventilators, respirators, and diagnostic and medical equipment. We sell to customers that build those. Those will now get priority. They go to the front of the line.”

While Platt said he doesn’t know the long-term change the company will see in medical component output, he does anticipate a short-term rise. As the curve of the outbreak continues to take shape, demand for ventilators will increase. Manufacturers of such products will see an uptick in production, which means they will need more connectors from Samtec.

What Platt is seeing across the spectrum of Hoosier industries has made him proud and given him comfort. Medical professionals risk their health on a daily basis to care for those infected with the virus.

It’s important, he said, that other industries continue to step up and provide the necessary support needed to continue the fight against the pandemic.

“The things that companies and people who are on the front lines are accomplishing, especially in the medical field, we’re all looking on in awe,” Platt said.

“Those are the kind of things that make me proud, and recognize that our country and community will get through this. Our community is so special, and we’re blessed to be somewhere where people work together to get things done.”
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