America's R.V. Manufacturing Capital Hit Hard

Jan. 14, 2009 — -- Few objects represent the change in America's economy like a "for sale" sign on a parked RV. Spending $500 to fill the gas tank of a custom "rolling castle" isn't much of a priority for families these days. And nowhere is that more evident than in Elkhart, Ind., the RV manufacturing capital of America.

In the last year, this place gained a painful new distinction; no other county in the nation has seen unemployment jump so high so fast, from 4.4 percent to 12.4 percent. One in nine Elkhart residents is now out of work.

At the Faith Mission of Elkhart, it is "Sloppy Joe Day," and among those grateful for a free meal are a dozen men who spent their lives building RVs, boats and conversion vans down the road. Since being laid off in September, they've endured a maddening quest to collect unemployment, stave off vehicle repossession and create resumes no one wants.

"A lot of the places, when you walk up the front door it says 'we are not accepting applications,'" says Doug Hartzell, a 39-year employee of Monaco Coach.

He sits around a table with former co-workers, as they stoically describe the emotional toll.

"If you don't watch it, it'll bust your marriage up quick," says Buster Coleman. "She's under stress, you're under stress. Boom, you just go off on each other."

To get out of the house and feel productive, they are donating their time and skill building a homeless shelter they hope their own families will never need. "When we run out of our unemployment [insurance in June]," says Ed Neufeldt, "what are we gonna do?"

What's the fix for these workers? ABC News spoke to some of the nation's leading economists and all agree there is no quick remedy. But all expressed faith in an Obama plan to give the American economy a sweeping makeover through education, innovation, and renovation of infrastructure.

"There are many green jobs in weatherization, insulation, recycling or new infrastructure jobs in pipefitting water and sewage system that don't require a whole lot of retraining," said Robert Reich, labor secretary under Bill Clinton and now a professor at UC Berkeley.

Columbia professor and Nobel Prize winner Joseph Stiglitz agrees. "If you go around to our urban schools, they're an embarrassment. Students can't learn if the schools are in decrepit conditions," he said. "We could repair the schools, construct parks, make our cities more livable."

Energy Innovation May Be Long-Term Fix

But even though states and cities have provided lists of "shovel-ready" projects to the Obama administration, it will be months before they are ready to accept applications.

"The roads, the bridges, the schools -- all that takes at least 120 days to get going just from the time they get the money," said Diane Swonk, chief economist at Mesirow Financial in Chicago. "Unfortunately in the short term there's nothing that can be done to avert the fact that things will get worse before they get better."

"I would say use this time to get more education," Stiglitz said. "The evidence is pretty clear that those with strong, broad education are more agile. And when they switch jobs their wages go down less. Most Americans will get another job, but on average, their wages will go down. That is always hard to accept."

Indiana's Annette Silver is one example of someone taking that advice. When the 45-year-old mother of four lost her job at the Monaco RV plant, she applied for a $6,000 state grant and is now a technical school student learning how to make artificial hips and knees for the booming orthopedic industry.

"I've been out of school for 26, almost 27 years. So to jump back into school again is just overwhelming," she says. "But I'm a very determined person and a lot of the people here are determined because they are scared."

Most economists agree that after bursts of infrastructure spending and retraining, the best long-term fix is innovation, especially in the field of energy. With the right tax incentives, the wind farms of Indiana could quickly ramp up production, and Elkhart's idle labor base would be a perfect fit.

"We've hired guys locally who will not only work with us on this wind farm, but we'll take them with us to the next one down the street or the one across the country," says Ron Ritter of RMT Wind Connect.

Experts and Workers Agree: Bailout Failed

Small entrepreneurs like Bill Keith are giddy over the possibility. A few years back he invented a solar-powered attic fan that uses the sun to cool the home. The growth of his small SunRise Solar Co. has been staggering thanks to states that offer tax incentives to homeowners who use "green energy."

"In areas where a utility company might give a rebate towards the instillation of a fan like this, we can barely keep the stuff in stock," he says. "So if that were a federal thing as well? We would just take off like gangbusters."

While workers retrain, readjust and reprint another batch of resumes waiting for all these plans to materialize, there is one thing both Nobel winners and RV workers agree on: the current bail-out strategy is doing nothing to create new jobs.

"I have every reason for confidence in the American people and our institutions but people can't do it on their own," says Stiglitz. "They need help. So while we've been giving help to bailing our failed institutions, the big banks, we've not been giving help to ordinary Americans to help them make the transition. Think about what $350 billion would have meant is we had used those to increase productivity of America's labor force, training, education."