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SIA's temporary closure affecting Greater Lafayette's economy

Subaru of Indiana Automotive paying its employees until April 3rd is going to help the local economy.

Posted: Mar 25, 2020 10:26 PM
Updated: Mar 25, 2020 11:19 PM

LAFAYETTE, Ind. (WLFI) -- Subaru of Indiana Automotive paying its employees until April 3rd is going to help the local economy.

Purdue Associate Professor of Economics Dr. Timothy Bond said money made in the county will most likely be spent in the county.

A caveat to that is many restaurants and business are closed leaving people to rely on online business.

"As long as the workers are getting paid it is not a catastrophe," said Bond. 

That is at least for now. Dr. Bond said in the short term Greater Lafayette's economy is going to be okay, but long term not so much

"There is the national impact as this is related to concern about people not being able to sell things produced in that plant," said Bond.

The plant produces on average, throughout the last five years, more than 300,000 cars using more than 6,000 employees.

"If you have a large number of workers who do not have a disposable income anymore that is going to further amplify that effect," said Bond.

Bond said more sales will be limited and the number of employees on payroll will go down.

He said online sales will skyrocket during this time of unpredictability.

"People are afraid to go out to local stores, so shifting more online, so you are taking more money out of local people's pockets," said Bond. "That is going to hurt local businesses even more."

Bond said the $2 trillion stimulus deal will have a huge role economically.

"That should really help smooth the losses of people who have lost their job as a consequence of this," said Bond. 

He said the longer the economic hardship lasts more repercussions will be felt.

However since he said the economy was fairly strong before COVID-19 hit, the less of a fallout there will be.

"If we can smooth through this rough patch and we can get our restaurants open and people back on the streets hopefully we can get a quick recovery here," said Bond. "Hopefully this is a short effect."

As it stands, SIA will be closed until April 6th.

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