Recovery Act, Auto Bailout Draw Praise at Local Event

By | April 10, 2012

(Source Tom Troy The Blade, Toledo, Ohio (MCT) — Three years ago, with the auto industry at a near standstill, American Manufacturing Inc. of Toledo was down to its last four employees.

Office manager Danielle Letellier said the office employees helped out in the shop to help process the few orders that trickled in because owner Chuck Gotberg had laid off almost everyone else. She helped to operate the drill press and the stencil.

Even Ms. Letellier and the company’s chief financial officer took layoffs.

“When the auto industry took a hit, the orders fell off,” Ms. Letellier said. “It was a scary time.”

Before the sudden collapse of the market for automobiles in 2008 and 2009, the steel-fabricating company at 2375 Dorr St. had 125 people manufacturing industrial steel containers for automotive-parts suppliers. After nearly shutting its doors in 2009, American Manufacturing is now back with more than 100 workers and looking for additional welders.

On Monday, Mr. Gotberg hosted an event with U.S. Sen. Sherrod Brown (D., Ohio) and U.S. Rep. Marcy Kaptur (D., Toledo) and officials of the U.S. Small Business Administration to give credit to the 2009 American Recovery Act, also called the stimulus package. They also praised the 2009 $80 billion bailout of General Motors and Chrysler with the turnaround in American Manufacturing Inc. — and American manufacturing in general.

“The automotive bailout was the key to my recovery,” said Mr. Gotberg, a Northville, Mich., resident. “If General Motors and Chrysler would have failed I’m convinced the supply base in total would have failed, because once it’s dead, it’s dead. You can’t just say that some other company’s going to take the place of General Motors. They can’t.”

He said he considers himself a Republican but has no political activity other than voting.

“We’re on an upward cycle here that really is unprecedented. We’re going to find ourselves in 2013 beyond where we were in 2006 and I’m looking forward to that,” Mr. Gotberg said.

Many of Mr. Gotberg’s workers sat in for the news conference, as did some of his suppliers and a representative of his lender, Waterford Bank of Sylvania Township.

Senator Brown said 800,000 Ohioans owe their livelihoods to auto manufacturing.

“This is a case of what we should do, government working with local lenders, local manufacturing, to bring out a success,” said Mr. Brown. He said that the success of American Manufacturing required all the participants to help out. “I think this is an American success story.”

The revival of the auto industry is a key component of Democratic re-election campaigns, including that of Senator Brown, President Obama, and Miss Kaptur.

The news conference, which officials said was not a campaign event, despite the plethora of praise heaped on the auto bailout championed by President Obama, was intended to showcase the success of the U.S. Small Business Administration in helping manufacturing companies succeed.

Mr. Brown’s opponent is Republican Josh Mandel, Ohio’s treasurer. A spokesman for Mr. Mandel repeated criticism that Mr. Mandel has made previously, that claimed Mr. Brown’s voting record of “higher taxes, more regulations, and saying ‘no’ to American energy [has] been devastating to Ohio manufacturing and the auto industry.”

Mr. Mandel has not said whether he would have supported the auto bailouts, and the Brown campaign has accused Mr. Mandel of not supporting the bailouts.

In an interview with the Youngstown Vindicator last month, Mr. Mandel said he was developing a plan to “rescue the auto industry.” He said he “respectfully disagreed” that the bailouts saved the American auto industry.

Mr. Gotberg’s business was approved for a loan guaranteed by the SBA after he was cut off from conventional bank financing in 2010, even though employment in his business had rebounded to at least 50 workers, he said.

He said the SBA guarantee enabled recently formed Waterford Bank to extend him a $1.2 million line of credit. That line of credit allowed him to buy two steel-cutting machines that have speeded up his manufacturing.

The availability of the SBA loan guarantee is attributed to the stimulus law because the stimulus lowered fees for SBA loans, increased the amount of the loan that could be guaranteed from 75 percent to 90 percent, and increased the amounts that could be guaranteed from $2 million to $5 million so more manufacturers would be able to benefit, officials said.

Miss Kaptur said the American public remains split over the value of the auto bailouts because many Americans don’t recognize the importance of manufacturing.

“A lot of people don’t get the fact that auto manufacturing has to compete globally on a very unlevel playing field,” Miss Kaptur said. As evidence, she said an American-made Jeep Cherokee has a price tag of $85,000 in China.

“Those polls reflect a portion of our public that is quite unknowing about what it takes to create wealth.”

She said many Americans and members of Congress live in areas that are “insulated” from the realities of the free market, and Washington is one of those places.

“They live in la-la land, in terms of what actually creates wealth in this country,” Miss Kaptur said.

She said Ohio is in a position to lead the recovery of manufacturing in the United States.

The loan to American Manufacturing was announced in October, 2010, along with four other loans at the same time.

Marianne Markowitz, SBA administrator of a six-state region based in Chicago, said the stimulus allowed the SBA to guarantee loans of $70 billion at a time when the traditional banks were not lending.

Contact Tom Troy at: tomtroy@theblade.com or 419-724-6058.

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©2012 The Blade (Toledo, Ohio)

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Distributed by MCT Information Services

Source Tom Troy The Blade, Toledo, Ohio (MCT)

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