MARION, Ind. (AP) -- The mayors of two Indiana cities heavily dependent on manufacturing jobs say the proposed federal loans to the Big Three carmakers are needed to prevent widespread unemployment and major losses to the tax bases of their communities.
Marion Mayor Wayne Seybold and Kokomo Mayor Greg Goodnight said the presence of the auto industry is so large in their cities that a failure of the companies would be devastating.
"We have a situation where Indiana for many years has built its economy around the auto industry," Seybold said during a conference call which he and Goodnight participated Friday.
"If you live in Kokomo or work in Kokomo, you know someone who's worked for the auto industry," Goodnight said.
In Kokomo, some 5,000 people work at Chrysler plants and about 3,500 work for parts maker Delphi Corp. A General Motors plant in Marion has about 1,200 employees.
Bush administration officials and congressional Democrats were working over the weekend on a deal to provide about $15 billion in loans to GM, Ford and Chrysler. The bailout legislation is expected to come to a vote this week.
Seybold, a Republican, said his city midway between Fort Wayne and Indianapolis would be greatly harmed by a Big Three failure.
"It's not just about job loss," he said. "The financial impact it would have to the city budget would be pretty hard as well."
He worries about the loss of the economic engine provided by GM's 2.1 million square-foot plant in the city and the dealerships selling the Big Three's vehicles.
"We could be looking at millions of dollars of revenue loss for local government," Seybold said.
Goodnight, a Democrat, said he believed many in Washington regretted not asking tougher questions about the $700 billion bailout plan approved in October for the financial industry.
"As a result, there may be an overreaction by some members of Congress to over-scrutinize the auto industry loan program," he said.
Paul Buetow, manager of GM's Marion stamping plant, said it was risky to not help the Detroit automakers during the national recession.
"I don't think we have a good idea of what impact this will be on the gross national product," he said. "(A failure) will affect every American, in every state, in every community. That's something that can't be overlooked."
