Bethany Tabb, Courier-Times Staff Writer
Mayor Jim Small says a bankruptcy of the automobile industry's Big Three companies could devastate New Castle more than he anticipated.
On Monday, Small attended a forum in Indianapolis, where about 150 Indiana leaders discussed the problems surrounding the auto industry. It was organized by Mayors Greg Goodnight of Kokomo and Wayne Seybold of Marion.
About nine speakers discussed the different sides of the issue. Small listened with Dale Cole of the UAW Local 371 at his side.
Throughout the three-hour meeting, Small said he was especially struck by an economist's words. The speaker gaves estimates for the percentage of jobs in several cities that could be lost if Ford, Chrysler and General Motors file bankruptcy.
Most percentages ranged from 1.5 to 5.5, Small said. But the economist said Kokomo stood a chance of losing 22 percent of its jobs. Small said that worried him because New Castle has so many industries related to automobiles.
"I think percentage-wise, we could come close to Kokomo's 22 percent, that's my own gut feeling," he said. "That was very bothersome."
Small said he was also told that the industry's emergency bailout is actually a bridge loan. It would be repaid over time with interest, he said, and the federal government would actually make money.
But that loan doesn't come without requirements. Speakers at the forum explained the companies must streamline their operations, Small said. They must also make changes in their legacy costs, which include benefits for current employees and retirees.
If the Big Three come up with viable plans by the end of March, he said, additional funds could be available to them.
He also heard from the UAW about concessions made while negotiating a bailout. Cole helped him to understand the contract language used, he said, answering his many questions.
Small said he didn't walk away from the forum an expert on the auto industry. But it did convince him that a rescue plan is a good idea.
"We're not just throwing money unnecessarily at a problem," he said.
Last week President George W. Bush ordered a $17.4 billion in rescue loans. Small said the forum concluded that it's now up to the auto companies to make changes.
There was no discussion of emergency plans to prepare for the worst. Small said he'd do all he could to support the industries in New Castle, though he has limited capabilities.
But he said it was helpful just to learn more about the situation. He came away from the forum feeling like New Castle is on the right track, he said.
The survival of the Big Three isn't a Republican or a Democrat issue, he said. He believes the survival of the country, not just New Castle, depends on resolving the problems in the auto industry.
"To lose the Big Three, it would be a major crisis," he said. "It's indescribable what would happen to this country."
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