Toyota's sweeping auto recall hit home in Elkhart this week as a local manufacturing heavyweight was identified as the maker of the problematic gas pedal used in some 2.4 million vehicles.
Elkhart-based CTS Corp. made its best effort at damage control in the wake of the revelation, noting that the faulty parts have not been linked to any accidents or injuries.
As The Elkhart Truth reported, CTS CEO Vinod Khilnani told analysts on an earnings call Thursday that CTS has been working with Toyota to redesign the pedal part to meet tougher standards and that "three or four" CTS plants are already producing the newer pedals.
Khilnani also tried to downplay news that Ford Motor Co. has stopped producing a commercial van that it makes in a venture with Jiangling Motors Corp. in China because the vehicle uses a pedal of a different design produced by CTS.
CTS was suffering from the harsh economy before the recall, along with most of the auto industry. Revenues for 2009 were down 28 percent compared to 2008, to $499 million, the company reported on Wednesday.
(Click here for the full report.)
Khilnani focused his comments on the "momentum" of the third and fourth quarter, achieved in part because of salary and benefit reductions in 2009. As the recession eases, CTS management projected full-year 2010 sales to increase 10 percent to 15 percent over 2009.
As for the recall, Khilnani said that he did not believe that "when the dust settles" it would hurt the company's results in 2010.
CTS has 19 manufacturing facilities in the United States, Canada, China, Mexico and the Czech Republic, producing automotive parts as well as components used in telecommunication systems, medical devices and military equipment.

John Brecher / msnbc.com

Thomas Clark cuts the top from one of hundreds of aluminum cans while constructing a solar air heater in his brother's garage in Goshen, Indiana. Standing behind his nephew Alex, 13, is a prototype of the unit, which works by circulating indoor air through black-painted pop cans heated by the sun. Similar models and do-it-yourself plans are widely available online.

When gas prices spiked in 2008, Thomas Clark, a cabinet maker from Goshen, saw an opportunity.

He started a side business making make solar air heaters from scrap and recycled material. His design and materials are basic and cheap: he gets aluminum cans at 55 cents a pound, and 2 x 4 foot plywood sheets scrapped by the RV industry for $2 each. After starting out at a woodworkers' guild, Clark moved the growing operation to his brother's garage.

Clark's project represents tinkering, innovation and entrepreneurship that this area has long boasted of--the traits that helped turn it into a manufacturing center.

As the RV industry tanked with the economy, and Clark's hours were cut by a third in 2009, he had extra time on his hands--and added motivation to supplement his income. Through eBay, Clark has sold about 25 of the 2000 BTU units for $150 each.

"People say 'oh, 2,000 BTU, that's not a whole lot'," said Clark, "but it runs continuously."

It's a modest supplement in terms of heat, and in terms of income, but steady, so long as the sun is shining.

Of all the tea-leave readings, economic projections, and number crunching, this could be the gloomiest assessment for Elkhart area so far: A new report released by U.S. Conference of Mayors predicts that for Elkhart-Goshen to return to peak, pre-recession employment levels could take 30 years.
The report, "U.S. Metro Economies: Rate of Recovery," released at the annual meeting of American mayors in Washington, D.C., says labor markets will pick up steam in 2011-2013. But half of all metro areas—185—will not achieve pre-recession peak employment levels until 2013 and beyond, according to the report, prepared by IHS Global Insight.
Of the 350 cities included in the survey, 15, including Elkhart-Goshen, will not get back to the low jobless rates of their boom times until 2039, reports Josh Weinhold, who is covering the 3-day event for The Elkhart Truth.
Despite positive signs in the economy emerging at the end of 2009, the mayors' statement said most cities are "far away from recovery—especially in their labor markets."

The mayors are calling for the federal government to provide more direct support for cities, including fiscal help for local governments in especially hard-hit areas, more block grants for communities to undertake conservation projects, neighborhood revitalization and community policing. They call for renewal of federal stimulus money for youth summer jobs. And they want federal dollars for transportation to target urban areas more than they currently do, helping cities address congestion and joblessness.
"This data is solid proof that we need the Senate to pass a MainStreet jobs package now,” said Elizabeth Kautz, president of the organization and mayor of Burnsville, Minn. “We are in the middle of a jobs emergency that demands decisive and swift action.”
The mayors’ urgent appeal for jobs was underscored by a major economic report also released Wednesday forecasting job recovery and unemployment rates in the nation's 363 metropolitan areas, where 85% of the people in this country live. The report indicated that over 105 metros will still have unemployment rates above 10 percent; and 214 metros will have unemployment rates higher than 8 percent by the end of 2011, the mayors said in a statement.
On Thursday, the mayors’ took their case to the White House in a meeting with President Obama and his Economic Advisory Team.
The full "Metro Economies" report can be viewed in pdf format on the U.S. Conference of Mayors Web site.