Indiana Faces Ups, Downs Of Auto Industry

Greensburg’s new Honda plant is causing a mini-boom as the automaker plans to hire 1,000 people next year, but in Kokomo, Ind., auto industry workers have been laid off in droves.

GREENSBURG, Ind. (AP) -- Greensburg's $550 million Honda plant is causing a mini-boom, with some new businesses, a hotel and a bank branch popping up in the area.

But the story is different in Kokomo -- an automotive industry boom town of the 1950s and 1960s. Auto industry workers there have been laid off and the employment rate is 8.5 percent, The Indianapolis Star reported.

Greensburg may be fortunate to have Honda in town because the Japanese company is trying to expand in the U.S. while nearly every other automaker is trying to scale back.

Nearly 900 people now work at the plant along Interstate 74, about 50 miles southeast of Indianapolis. Officials say they will hire 1,000 people next year, bringing employment nearly 2,000.

No one expects a major boom in Greensburg, but there are some new developments.

"We've noticed a lot more traffic since Honda came, and it's going to get worse, I'm sure," said 75-year-old Phyllis Johnston of Greensburg. "But it's a good thing. If the town doesn't grow, you dry up, and there would be nothing."

Greensburg is not immune from the national economic downturn. The jobless rate was 7.2 percent in August -- up from 4.3 percent a year earlier.

In Kokomo, about 50 miles north of Indianapolis, the unemployment rate was even higher at 8.5 percent. General Motors' spin-off, Delphi, has let go more than 2,500 workers through layoffs and retirement in recent years, bringing its base employment level down to about 3,500. Chrysler, a typically stable employer for about 5,400 workers, has idled some workers.

Demand for new autos has declined nationwide. Forecasts call for foreign and domestic carmakers in the U.S. to turn out 13.8 million vehicles next year -- down from the recent peak of 15 million.

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