Faulty Toyota Parts Latest Blow To Elkhart, Ind.

CTS Corp., based in Elkhart, Indiana, has been making the gas pedals at issue in the Toyota recall. The town didn't need any more bad news, with its 15 percent unemployment rate. The plant's workers aren't talking. But some residents say the gas pedals are just one more black eye on the town.

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Elkhart, Indiana is home to the CTS Corporation, the maker of the faulty Toyota gas pedals thought to cause accidents. Elkhart did not need more bad news. It has a 15 percent unemployment rate.

As NPRs Cheryl Corley reports, the city is hoping to overcome the unfavorable publicity.

CHERYL CORLEY: Elkhart is a small city of about 50,000 people. Its located in Northern Indiana at the mouth of two rivers, about 130 miles from Indianapolis. Kyle Hannon with the Greater Elkhart Chamber of Commerce says the city is called the RV capital of the world, and manufacturing is Elkhart's base.

Mr. KYLE HANNON (Greater Elkhart Chamber of Commerce): Some would say we're at a little too heavy manufacturing, but I figure, we make things. At the end of the day, we make things that people want to buy.

CORLEY: During the recession, though, there was very little buying of Elkhart's RVs, followed by plenty of lay-offs. Unemployment rose rapidly from slightly more than 4 percent to the highest jobless rate in the country. Barack Obama visited the area twice during his campaign, and then as president to push a stimulus package, which city officials say is helping the city recover. One of the businesses that was able to withstand Elkhart's economic maelstrom was CTS, and Hannon says making a gas pedal for Toyota is only a small part of its business.

Mr. HANNON: It's a very small part. I think their Toyota contracts are only about 3 percent of the company. But it's still important, I mean, and there's still things to think about, you know, with the gas pedals and all, and then the sensors involved in it.

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CORLEY: CTS is in a part of Elkhart, Indiana for more than 100 years. It takes up a couple of blocks here on Beardsley Avenue. No one at the company is talking about the role CTS has played in the Toyota recall. But that's not the case at the bar across the street, Malcolm's Pub.

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CORLEY: There's a small group playing pool, drinking and chatting inside the bar. Tom Curtis(ph) is unemployed. He says he doesn't think the Toyota recall is any reflection on Elkhart or CTS.

Mr. TOM CURTIS: It sounds like, to me, it's Toyota's problem.

CORLEY: After working at CTS for 41 years, Larry Barbaro(ph) lost his job four years ago when the company downsized. He says CTS has won awards from Toyota for its quality control at the factory. And he thinks the company is being criticized unfairly.

Mr. LARRY BARBARO (Former CTS Employee): Because the first thing they came out with was a sticky accelerator, and they've had - Toyota's had problems for the past 10 years with acceleration problems on it, and CTS didn't even start making parts for them till 2005. So...

CORLEY: Sharing a table with Barbaro, construction worker Chuck Smith says it's not CTS's manufacturing, but Toyota's design that might have created defective gas pedals. Even so, Smith says the recall is still bad news for Elkhart.

Mr. CHUCK SMITH (Construction Worker): I mean, who's going to want to move here? Our unemployment has been very well documented, and with the new problem - even if CTS is - has done nothing wrong, it's the perception. This is just a place that you don't want to be because of that.

CORLEY: Elkhart's Mayor Dick Moore says the city's image is not tarnished at all, especially since the gas pedals are assembled not at the CTS plant in Elkhart, but at the company's facility in Canada.

Mayor DICK MOORE (Elkhart, Indiana): They're going to make it right. They're survivors. You know, they've been through the ups and downs before. I don't have any concerns about the CTS Corporation at all and their existence here in Elkhart, Indiana.

CORLEY: For its part, CTS isn't talking to reporters about the recall, but did issue a press release saying there's widespread confusion about its role, and that it's working with Toyota to resolve a problem. In Elkhart, there is one Toyota dealership. No one there was willing to talk, either. Throughout the country, though, Toyota dealers are beginning to receive shipments of parts needed to repair faulty accelerators, and many say they will hire new crews and stay open late to fix recalled cars.

Cheryl Corley, NPR News.

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