Cass County factories see positive signs in the economy

Several local companies forced to lay off employees this year have now called back some of those workers.

While some credit the recent "Cash for Clunkers" program, others believe the economy might be getting better.

Brian Shafer, president of the Logansport-Cass County Chamber of Commerce, said local companies were hopeful.

"From my discussions, they are cautiously optimistic," Shafer said. "That is what they relayed to me. They don't know if it is permanent or not. The total impact remains to be seen."

John Lendel, general manager at Matthew Warren, said the company recently brought back several employees, but not because of improved car sales.

"Our business is not that heavily automotive related," he said. "We had a volunteer related layoff program."

Lendel said according to the layoff agreement, employees were actually scheduled to return on a certain date.

Since Matthew Warren focuses heavily on the tractor-trailer business and military, Lendel said business had not stabilized enough to bring any additional employees back.

"We're seeing some stabilization, but we don't see any major uptick yet," he said.

Matthew Warren does some business with Chrysler, Lendel added. The company's return from bankruptcy has brought a slight increase in orders, he said, but Matthew Warren already had some inventory built up.

Small Parts Inc. was able to recall 49 workers, but according to Mike Winings, the company's vice president of human resources, the boost in car sales were not the main reason.

Most workers were called back before the effective date of the government program.

"Cash for Clunkers has helped decrease inventories somewhat at the retail level, but it is by far not the primary driver," he said. "The driver is that after nine months of auto production significantly lagging retail sales to draw down excess inventories in the system, production is now ramping up to meet retail demand. The good news is that, unlike a short term Cash for Clunkers effect, the corrected inventory balance means that the demand surge is sustainable."

Mike Englert, plant manager at Tinnerman Palnut, said his company was able to bring 18 employees back from layoff. Englert believes the callback was partly a result of the federal incentive, but not entirely.

"We have seen our automotive company customers pick up," he said. "But we have a lot of non-automotive customers as well, and they seem to be picking up."

Englert said he hoped eventually to be able to bring everyone back from layoff.

"It's kind of hard to tell what the future will be like," Englert said. "I hate to have anyone laid off."

Some employers wonder what will happen now that the federal incentive program has ended, Englert said.

"We're all being guarded," he said. "We're not really building inventory at all unless it is being ordered."

Winings, though, was optimistic.

"Retail auto inventories are at or below norms, which means auto production will continue to ramp up even without a retail sales boost," he said. "In addition to the automotive segment, we also see positive signs in the housing industry now that the glut of new housing inventory has been worked off, which will positively affect the other major industries we serve. We feel good about the next six to 12 months, but are very cautious beyond that given the irresponsible spending and anti-business policy decisions being made in Washington right now."

Englert expressed hope that the economy would improve.

"Right now, with the automotive industry, we can only see out a couple months," he said. "We believe it is stronger than at the beginning of the year, so hopefully it will remain that way."