Ryan's hometown and the route back to prosperity

[August 17, 2012]  JANESVILLE, Wis. (AP) -- 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.

"We just haven't had the demand. Business hasn't broken out," Schultz said. "We've accepted this as maybe the new normal."

As the GM plant headed for closure, Ryan -- who has represented Janesville in Congress for the past 14 years -- made a rare departure from his free-market orthodoxy that frowns on government intervention. He backed the federal bailout of General Motors and Chrysler, a bailout Romney has loudly said was a mistake, and teamed with Democrats in Madison and in Wisconsin's congressional delegation to unsuccessfully lobby GM to keep the plant running.

"It wasn't for lack of effort," said state Sen. Tim Cullen, a Janesville Democrat who praised Ryan's quiet efforts. "Paul was doing all this work and he told me about it, but he never put a press release out about it."

With the presidential campaign entering its final three months, neither Romney nor Obama will be that subtle as they hammer away at the issue of jobs. Obama has twice visited Newton, Iowa, since taking office; the city of 16,000 was devastated by the closure of a Whirlpool Corp. plant that employed 4,000. Romney has often focused on North Carolina, where cuts at the state's furniture manufacturers are among the 500,000 jobs lost there during the recession.

Janesville is making the same slow recovery that's typical elsewhere. City manager Eric Levitt said the city has added 1,000 jobs in the past 18 months, usually 50-to-100 at a time at existing employers. To foster that comeback, the city hasn't picked the Republican or the Democratic approach, but is using elements of both.

From the GOP: Streamlined permitting and tax cuts have aided in recruitment of new companies, including a medical technology company attracted by a tax break that could be worth as much as $9 million. The manufacturer of isotopes expects to open a new $24 million facility and employ 160 people in high-wage jobs by 2016.

From Democrats: Federal money for retraining assistance is filling classrooms at local vocational schools and colleges. At Blackhawk Technical College, welding programs that run from dawn until midnight six days a week are packed. That's helping address what city officials see as their biggest challenge: a mismatch between companies' expectations and the skills of those looking for work.

At the Harley-Davidson dealership, Sinks said he'd like the next president to reduce the regulatory burden on small businesses and try to discourage large U.S. companies from outsourcing jobs and manufacturing overseas. But when asked what's allowed him to rebuild his staff to the 50 he employed before GM shut down, he cites a renewed focus on excellent customer service, a new loyalty program and the overall improvement, however slow, in the nation's economy.

"We've tightened up," Sinks said. "We're seeing some light at the end of the tunnel. People who are secure in their jobs are spending money. And that's something I'm seeing today that I haven't seen in years."

Cullen, the Democratic state senator, said the federal government can help only so much, no matter who wins the White House. Cities such as Janesville probably hold their economic fate in their own hands, he said.

"A lot of it is really, truly local economic development effort," he said. "You don't come back from (the plant closing) in three-and-a-half years. Short of a giant home run of a company coming here with 2,000 to 3,000 jobs, which is kind of a pipe dream these days, it's going to be a slow slog back."

[Associated Press; By BRIAN BAKST and TODD RICHMOND]

Associated Press Auto Writer Tom Krisher in Detroit and AP writer Kasie Hunt in Washington contributed to this report.

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