Paul Ryan fought to bail out GM plant

Paul Ryan fought to bail out GM plant in Wisconsin district

By Kathleen Hennessey / Tribune Washington Bureau (MCT)  |   Sunday, August 19, 2012  |  http://www.bostonherald.com  |  Election 2012

JANESVILLE, Wis. — In September 2008, as Wall Street was roiling with calamity, Rep. Paul D. Ryan was facing another looming disaster back home.

A General Motors plant, the lifeblood of his hometown, was set to close. The huge Suburbans and Tahoes from the Janesville production line were no longer in vogue. The aging plant was to stop production by Christmas — unless Ryan and other Wisconsin officials could save it.

Ryan, then the ranking Republican on the House Budget Committee, flew to Detroit to cajole GM executives. For more than an hour, he and other officials made a PowerPoint proposal that mixed union concessions with unprecedented state and local tax breaks for GM.

“We put an enormous package on the table,” said then-Wisconsin Gov. Jim Doyle, a Democrat, of the state-led effort.

Two years later, as chairman of the budget committee, Ryan became known for another PowerPoint presentation — a slide show on the federal government’s ballooning debt. In that pitch, Ryan touted his budget plan, which includes a vow to “end corporate welfare.”

Now Ryan’s plan and his salesmanship have helped him become GOP presidential candidate Mitt Romney’s running mate. The choice has thrilled conservatives who view him as a symbol of unwavering fiscal austerity and delighted Democrats who see him as a radical ideologue.

Neither characterization fits Ryan’s effort to save the GM plant in his district. Despite his paeans to free markets, Ryan voted for $14 billion in emergency federal loans to help bail out the auto industry during the waning days of the George W. Bush administration.

Ryan was closely involved in a task force that helped craft two incentive packages with large state tax breaks for GM, and personally lobbied GM executives to accept the bids.

“I would say Congressman Ryan did what a good member of Congress would do for his district,” Doyle said. He added that like many other Republicans, Ryan made sure to “complain about the so-called stimulus and bailouts while also lining up to make sure their districts were getting taken care of.”

Ryan’s record of seeking federal money for his district came under close scrutiny last week after he denied and then acknowledged requesting money available under the $789-billion stimulus bill passed by Congress in 2009. Ryan had voted against the bill, and decried it as wasteful. In a statement Thursday, he said constituents’ requests for stimulus funds “should have been handled differently.”

A Ryan aide, who asked for anonymity because he was not authorized to discuss the issue, said that although Ryan’s proposed budget plan promises to take the federal government “out of the business of picking winners and losers in the marketplace,” he makes a distinction between what is appropriate for the federal and state governments. Ryan believes states are free to compete for business as they see fit, the aide said.

No one in Janesville was surprised that their native son would try to save the GM plant.

Ryan’s family had been in the blue-collar town for five generations, even longer than the GM plant, then 82 years old. Ryan’s father had worked there one summer during high school. Ryan regularly campaigned outside the gates when he ran for Congress.

Rumors of the plant’s demise were perennial, however. When GM finally announced in May 2008 that it would stop production by year’s end, local and state officials scrambled to save more than 4,000 jobs.

Local, state and federal leaders formed a task force to persuade GM to give Janesville another look. 

Ryan’s chief of staff was a fixture at the meetings and Ryan regularly reached out to GM CEO Rick Wagoner, with whom he had forged a close working relationship, participants said.

Ryan “knew what it meant, how devastating it would be,” said Tim Cullen, the task force co-chairman and now a Democratic state senator. “I think he showed he has a pragmatic streak in him.”

At the September 2008 meeting in Detroit, Ryan helped pitch a $224-million proposal that included roughly $50 million in state enterprise zone tax credits, local government grants worth $22 million, and major contract concessions from the United Automobile Workers union local.

But it soon became clear that the future of Janesville — and all of GM — hinged on federal intervention.

In late November, executives from Detroit’s Big Three flew to Washington to ask for a bailout. The next day, Mitt Romney made his opposition clear in a New York Times[NYT] op-ed entitled, “Let Detroit Go Bankrupt.”

Ryan disagreed. He supported a House bill that offered $14 billion in fast-tracked loans to GM and Chrysler. Ryan cited his district’s “gut-wrenching” experience with layoffs, and a commitment to the auto industry. He also suggested that, under other circumstances, he might have voted no.

“At the forefront of my mind are jobs in southern Wisconsin and the retiree commitments to workers that could be placed in jeopardy under certain bankruptcy scenarios,” Ryan said at the time. He said he backed the plan because it relied on previously appropriated money for auto technology loans, not added spending.

When President George W. Bush used Wall Street bailout money, known as the Troubled Asset Relief Program, instead of the technology loan program, Ryan said he was “deeply troubled” by the move.

Ryan would again look to the loan program to help his district. In May 2009, he and other members of the Wisconsin delegation urged the Obama administration to retool another auto plant in Ryan’s district. They failed, and the Chrysler engine plant in Kenosha was shut down in October 2010.

Today, Ryan opposes the policy that made the loans available. His proposed 2013 budget would eliminate the loan program and “all programs that allow government to play venture capitalist with taxpayers’ money.”

The Janesville plant made its last SUV two days before Christmas in 2008. Today, it sits empty behind a barbed-wire fence heavy with vines and “No Trespassing” signs.

Six months after the plant closed, GM announced that Janesville could compete with two other cities for production of a small car that would be called the Sonic.

This time, Wisconsin offered a $400-million incentive package, including more than $200 million in union concessions and $100 million in state tax credits. The package ultimately included $5 million in federal stimulus funds, although Ryan’s aide said the congressman was not aware of that line item at the time. At a meeting in Washington, Ryan and other members of the delegation urged GM executives to accept the bid.

They were unsuccessful. In late June, the automaker announced that Orion Township, Mich., would build the Sonic.

Acknowledging the defeat on his website, Ryan vowed, “I will continue to fight for pro-growth, common-sense economic reforms and serve as an advocate on your behalf.”

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