Kokomo.

• Author: Pendse, Dilip
• Position: Strong economic outlook for 2001 - Statistical Data Included

Kokomo is experiencing its longest period of economic expansion since 1992. Recently, Industry Week magazine stated that Kokomo is among the top 15 manufacturing centers in the U.S. According to the U.S. Department of Labor's Bureau of Economic Analysis, Kokomo's average salary ranks among the top 15 MSAs in the nation. The same source reports that Kokomo MSA has held #1 ranking in Indiana in terms of average salary for the past 16 years! Kokomo has a prosperous business partnership with DaimlerChrysler, the world's 3rd largest auto manufacturer. In addition, Kokomo's housing is affordable, its population is growing, its property values keep rising, and its credit rating is high. Optimism abounds in Kokomo!

Although the Kokomo economy is barreling along, it is not as super-charged as it was during the previous several years. Apparently, it is showing some signs of economic growth fatigue. There are, however, no signs of a significant slowdown. Manufacturing still remains strong. There is no significant reduction in factory overtime. The jobless rate remains low. The labor market is super tight. Payrolls are high. The retail sector is vibrant. Nonresidential construction is up (see Table 1).

[TABULAR DATA 1 NOT REPRODUCIBLE IN ASCII]

Christmas in September

Juergen Schrempp, CEO of DaimlerChrysler's worldwide operations, recently sent Kokomo an early Christmas gift. Despite disappointing earnings, a declining stock price, and sluggish sales, DaimlerChrysler announced in September 2000 that it plans to invest $853 million in Kokomo's three operations. The economic windfall came unexpectedly, because DaimlerChrysler invested $1 billion in creating its new Indiana Transmission Plant (ITP) just five years ago. The latest spending decision was a calculated, strategic move. Since installing its first manufacturing facility in Kokomo in 1937, Chrysler has gradually and systematically boosted its manufacturing base here. As a result, outside of Detroit, Kokomo now has DaimlerChrysler's second largest number of plants. Although about 12,000 Hoosiers work for DaimlerChrysler, nearly 75 percent of them work in Kokomo. DaimlerChrysler is Kokomo's largest single employer.

This latest massive investment will result in a 600,000 square feet expansion at ITP, installation of $400 million worth of machinery, and renovations at the Kokomo Transmission Plant and Kokomo Casting Plant. Along with producing Chrysler-engineered transmissions, the expanded Kokomo operation will produce German-engineered Mercedez-Benz transmissions, which were previously produced in Hedelfingen, Germany.

DaimlerChrysler's new investment plans have elevated Kokomo's image...