When it comes to cars and trucks, it seems bad news has been wheeling into Indiana in force in recent months. In the past two weeks alone, I found two rather pessimistic items in my issue of the Indianapolis Star having to do with vehicle manufacturing.
First, Navistar announced it was temporarily closing its diesel engine plant on the east side of Indianapolis, which means 500 workers will be idled, and will receive paychecks 30% lower than normal during the time the plant is closed. As a bankruptcy attorney in Indiana who reads and listens to news very carefully, I understand that sales of pickup diesel trucks have fallen as the price of diesel fuel has risen. Many people who had used pickups to tow RVs are cutting back on this type of travel. I also understand that even temporary layoffs will mean that hundreds of families are going to have a very hard time keeping the bills paid.
The second bad news item I caught in the Indianapolis Star had to do with Ford Motor Company. The automaker announced it no longer expects to reach profitability in 2009. Like Navistar, the company was hit with greatly reduced demand for pickups, plus SUV sales are way down with higher gas prices. And, like Navistar, Ford announced job cuts, including jobs for both white-collar and hourly workers. Once again, I’m especially alert for employment news. Job layoffs are one of the main causes of bankruptcy, along with medical bills and divorce problems.
In a happier twist, the Star had news about a third auto company, GM. One of GM’s plans in Pittsburgh is closing, and some very expensive large equipment from that plant is set to be moved here to a stamping plant GM has on the west side of Indianapolis. This Indianapolis plant has cut its production in half in recent years, and the transfer of equipment could mean new life for this 2.1 million-square foot plant. I am very, very interested in the fate of this GM plant. There are still 900 workers there (down from 5000 in the 1980’s), and to me that means 900 or more families might be given more of a chance to keep up financially.
In an earlier bankruptcy blog, Yet More Good News In Indiana, I explained that a healthy job market in our state is a very important factor in the work I do with bankruptcy clients. The ability for a Hoosier to get a new job after a layoff, the opportunity for a single moms to reenter the work force following a divorce, and the chance for families to stay in their homes and avoid foreclosure – all these things depend on the employment market in our state” wheeling” along!