Kokomo, Indiana: From auto town to ghost town?
Precisely 46,113 people lived in Kokomo, Indiana as of the last census. If Chrysler and car parts supplier Delphi go belly-up, almost one in four of them will lose their jobs, adding to the already burdensome 20 percent unemployment. As one auto worker told CNNMoney.com, "If we go down, the whole town goes down."
These are well-paying jobs, too, providing the money that turns over many times and passes through many hands before it leaves Kokomo. From the restaurants to the beauty salons, golf courses to the theater, in a company town everyone lives and dies by the company payroll.
Delphi is already in bankruptcy, and the government is currently organizing a shotgun wedding between Chrysler and Fiat. With American car sales down 37 percent in March, every unsold Chrysler on every car lot in the country is a harbinger of doom to towns like Kokomo. And there are a lot of towns like Kokomo. General Motors (GM) has a metal center in Marion, Indiana, an assembly plant in Lordstown, Ohio, and another in Janesville, Wisconsin. Ford (F) assembles cars in Avon Lake, Ohio and builds transmissions in Livonia, Michigan. Chrysler has plants in Fenton, Missouri; Kenosha, Wisconsin; and Twinsburg, Ohio. Failures by any one of the Detroit three will leave carnage strewn across the entire upper Midwest.The same threat is posed by foreign-owned manufacturers such as Honda (HMC) and Toyota (TM). They chose to build their U.S. plants in rural areas, and slowly those small towns, such as Marysville, Ohio, and Georgetown, Kentucky, have swelled with people that are all feeding from the same employer.
The people of Kokomo don't have to go far to see examples of towns that have virtually died when the main industry closed. The steel industry built Gary, Indiana, and then died away. Now, the median value of a house in Gary is a third of the national average, the median family income is $26,000 below the national average and 22.7 percent of its housing units are vacant.
Perhaps extinction is too strong a word to describe the impact of the car industry's collapse on Kokomo, but for the people in the cross-hairs, it must sure feel like an extinction event.