Aug. 19--At least 300 layoffs will hammer Indiana's largest automotive city as Delphi's electronics arm pares jobs after a 32 percent drop in second-quarter U.S. sales.

Layoffs in the state's massive auto-parts sector helped push the Indiana jobless rate to 6.3 percent in July, and the state surpassed the national rate for the second straight month.

Kokomo's unemployment rate has risen in recent years with previous Delphi cutbacks rippling through the city and Howard County. The county's jobless rate hit 7.7 percent in June. That was the highest jobless rate among Indiana metro areas.

"It's not a complete shock to see this happening, knowing what is going on with automotive suppliers," said Kokomo Mayor Greg Goodnight.

The city has launched an effort to diversify the economy and has begun a green initiative to make government and other buildings more energy-efficient.

"The possibility actually exists to create more green jobs," Goodnight said. "Factory workers and auto workers possess the skills necessary in advanced manufacturing, windmill technology, welding processes, electricians. We think we can use these individuals to retrofit not only government buildings but a lot of other buildings in the community."

For Delphi, No. 1 customer General Motors' rapid fall-off in sales of high-end sport utility vehicles cut demand for expensive electronics such as back-seat entertainment systems designed by engineers in Kokomo.

On Monday, officials in Delphi's Kokomo offices announced the electronics division will let go 600 of its 3,200 white-collar workers in the United States by late December.

The majority of those layoffs will occur in Kokomo, one of the company's largest employment centers in the nation, Delphi spokesman Milton Beach said.

Kokomo is the headquarters for the electronics division and home to about 2,500 white-collar employees and 1,500 hourly employees. Salaried workers are mainly in the Delphi engineering center, microchip fabrication plant and administrative offices.

"What we are doing is addressing the issues of market conditions and trying to do everything we can to get this particular division to a healthy path," Delphi spokesman Jay Jiang said during a conference call with reporters. "If we're able to reduce costs and remain competitive, it's a great contribution."

One stroke of good fortune for Kokomo: No plans exist to close, sell or cut back the $1 billion microchip plant, which provides 500,000 circuits daily used to make sensors common in the electronic systems on modern autos, Beach said.