August 17, 2012

Ryan's hometown and the route back to prosperity

JANESVILLE, Wis. — A defining moment for Paul Ryan's hometown came at the height of the Great Recession: General Motors, after nearly a century of making Chevrolets on the banks of the Rock River, shut down its oldest assembly plant and erased 6,000 jobs.

A defining question of the campaign Ryan joined this week as the Republican Party's vice presidential nominee just might be what comes next for places like Janesville.

In the election battleground states of middle America, this is one of the many not-quite-small-towns but hardly-big-cities struggling to find their future. They were among the last places where high school educations led to solid blue-collar jobs. They are home to once-thriving small businesses now staggering from big employers shutting down.

For Republican Mitt Romney and his new running mate, the solution is lower taxes and fewer regulations. For President Barack Obama, it's more resources for schools, job training and infrastructure. The policies couldn't be much more different, even if they share the same goal: making America a more enticing place to do business.

And even when there's a hometown kid on the ballot, the election in cities such as Janesville is largely a choice about which path is the right route to prosperity.

"This town is in bad shape economically," said Bill Westphal, 72, a retired businessman who lives across the street from Ryan and his family. "We're out here on a limb. We have to make this town work."

Janesville, a town of 60,000 roughly 40 miles southeast of the capital city of Madison, is one of a dozen communities nationwide rocked by the near-collapse of General Motors. The company survives today after cutting roughly 22,000 blue-collar jobs and filing for bankruptcy in 2009.

This area's unemployment rate spiked to 12 percent in the immediate aftermath of the local plant's closure that April, and it remains just under 10 percent — higher than Wisconsin and the nation as a whole.

GM still owns the plant and, technically, it's on "standby." In reality, it's a deserted hulk of 4.8 million square feet surrounded by weed-choked parking lots. Most of its employees retired early or accepted offers to move to other plants. Even if the automaker reopened, city economic development director Vic Grassman says wages would be far lower because of union agreements struck before the plant was idled.

About 6,000 jobs were lost at the plant and at businesses it supported. At the Harley-Davidson motorcycle dealership in Janesville, manager Gary Sinks says sales are still ringing in at about half of what they were before GM "turned out the lights." In the year after the plant shut down, people simply stopped visiting his store and he was forced to lay off 10 people from his staff of 50.

"We downsized and we'd never done that," Sinks said. "It was pretty dark. That meant that everyone who was still there had to work harder and do a better job maintaining (relationships with) whatever customer was walking through the door."

Ryan's family wasn't immune. The earth-moving company the family's forebears founded in the mid-1880s, run today by Ryan's cousin Adam, was forced to sell some of its equipment and lay people off. Revenue has dropped 25 percent since 2008, said Jeff Schultz, the company's human resources manager.

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