What the loss of 600 Tower Automotive jobs will mean Corydon

By Charles Ewry, The Corydon Democrat

The most visible impact of the closing of Tower Automotive's Corydon plant later this month is the staggering loss of 600 manufacturing jobs. The less visible collateral damage shows why communities compete to play host to these revenue generators.

The U.S. Chamber of Commerce publication, "What 100 New Jobs Mean to a Community," depicts an economic impact that is much bigger than any one business.

Every 100 new jobs in motor vehicles and equipment manufacturing result in an additional 34 jobs in other manufacturing; 34 in retail and wholesale trade; 46 in services, and 10 in finance, insurance and real estate, according to the publication.

Its analysis of regional data on inter-industrial relationships suggests that 100 jobs like those at Tower can produce as many as 136 additional jobs in the county where the plant is located.

So how does the model apply to a real community?

Here are a few examples.

Tower Automotive accounted for about 50 percent of Hampton Inn's corporate business when the hotel opened in Corydon in 1998, said general manager Linda McKim.

The Corydon plant contributed about $65,000 worth of business to the hotel in 2002 but only $8,600 last year.

When a new line was installed in 2002, "Guys came here and lived here for months at a time, basically," McKim said.

Men in suits walked over to Steve Yahraus' Corydon Machine Tool business before the plant on Cline Road had even opened. After assessing the tool shop, the men told Yahraus they were going to send him a lot of business.

"We kind of laughed. They're the guys who are going to make us a million dollars," Yahrus recalled.

Through the years, Yahraus stopped laughing. He is amazed at how much equipment in the plant was manufactured by Corydon Machine Tool.

"They've definitely helped us over the years, no doubt. I would say in our busiest times, one summer in particular, we had four to five guys on Tower stuff all the time," Yahraus said.

While some business owners complain that they were left holding the bill after Tower declared bankruptcy, Yahraus isn't bitter.

"I'm not going to let what has happened over the last six months taint it. They have given us a lot of work over the years. You got to count the good with the bad," he said.

Sometimes it can be hard to add those numbers up.

Fred Burnett's S & F Petro at the corner of Quarry and Cline roads is the closest convenience and fuel stop to the Tower plant.

"It's hard to put a handle on it dollarwise, but I know it's gonna cost us," Burnett said.

Tower employees spend about $50 to $75 each day in his deli, and he places fuel sales at about $1,500 to $2,000 each month.

"We'll survive it," Burnett said. "We'll try to offset it by building other business."

There is also the loss of tax revenue.

Not only is Tower the second largest employer in Harrison County, "Their average wage is certainly the highest among our manufacturing workforce," said Darrell Voelker, executive director of the Chamber of Commerce of Harrison County.

County residents pay the county income tax called CAGIT, and all county workers pay the county income tax called CEDIT.

Though Tower does not provide the average employee wage, Voelker used a hypothetical $15 per hour as an example. Assuming 590 employees work 2,080 hours during a year, that amounts to $18.4 million in payroll.

With 55 percent of its workforce living in Harrison County, Tower's payroll produces about $75,900 in CAGIT revenue and $46,000 in CEDIT revenue annually, less exemptions, based on the $15 per hour estimate and known tax information.

Though a tenant who will make an investment equal to Tower is unlikely, "The Harrison County Economic Development Committee is very active with promotion of the building for a future tenant," Voelker said.

"An empty 350,000-square-foot building generates a lot of attention," he said, including "a lot of inquiries by commercial and industrial real estate agents."