Paul Ryan’s hometown recovers, in part, with government aid

Janesville economy '40 percent back' after GM left, one businessman says
Paul Ryan’s hometown recovers, in part, with government aid

Chris Sitter faced an identity crisis along with his hometown of after the local General Motors plant closed. 

The Janesville father of three was laid off on a snowy day in December 2008 from Lear Corp., where he had made front seats for GM vehicles for 16 years. 

“I saw the tears that last day. I couldn’t wait to get out of there, to be honest,” Sitter said in his Janesville apartment. “I made a decision in my head to myself, that when I went back to school, I would find something that I loved doing.” 

Sitter and Janesville’s leaders have struggled in similar ways over the past four years to reinvent themselves. The city’s economy, long reliant on auto jobs, has recovered slowly as a distribution hub and, in part, with government aid. 

‘Tragic’ day arrives 

At its peak in the 1970s, Detroit-based GM employed more than 7,000 people at its Janesville assembly plant, which made trucks. Other companies like parts suppliers, distributors and custom vehicle detailers, supported the plant. 

Long rumored as a potential casualty of GM’s attempt to shed its label as a fuel-inefficient automaker, the Janesville factory was idled in the midst of the company’s failed attempt to stave off bankruptcy. The decision sent a shock wave through the community as 11,000 jobs, nearly 10 percent of Rock County’s workforce, disappeared in a single month, said Sen. Tim Cullen, D-Janesville. 

Ryan’s hometown recovers, in part, with government aid

“It was tragic,” said Cullen, who co-chaired a task force that tried to entice GM to stay. Republican vice presidential nominee Paul Ryan was also on the committee.  

“Paul did a lot of things, had a lot of meetings, met with a lot of GM people,” Cullen said, adding that the task force came up with a large incentive package for the automaker. “The thing that impressed me was that he never put out a press release.  He never tried to take credit for an individual act.  He was just trying to win.” 

Ryan, who has publicly opposed corporate bailouts, also voted for a GM federal aid package in late 2008 as part of the Troubled Asset Relief Program. 

The effort to keep the automaker in Janesville ultimately failed, and the only signs of life at the 226-acre facility today are growing weeds in the parking lot and GM security guards who patrol the perimeter. 

Stimulating the economy

In the years since the closure, the federal and state government has stepped in to help Janesville’s recovery.

The city won a $1.2 million grant from the U.S. Economic Development Administration, one of President Barack Obama’s main stimulus programs, to build an innovation center on the south side. Construction crews were hard at work, pounding nails atop forklifts on a recent afternoon.

SHINE Technologies, a maker of non-nuclear isotopes for medical treatments, has committed to building a facility in Janesville and creating 150 jobs. The project moved forward partially because of $10 million from the National Nuclear Security Administration, said John Beckord, president of the pro-business group Forward Janesville.

“In the case of SHINE, it was critical for that company to move their project forward,” said Beckord, a Ryan supporter. “The innovation center would not likely have been built without that grant.”

The Janesville economy, which one entrepreneur described as “40 percent back” from prerecession levels, has seen a number of high-profile expansion projects in the years since GM left.

The city has become a distribution hub, and a massive GM parts facility left vacant on the south side is now nearly fully leased, Beckord said.  Trucks were arriving and departing the warehouse as Beckord checked off the improvements.

Development opportunity awards

The state also came to Janesville’s aid in the years after the auto crisis, creating the Janesville Development Opportunity Zone and giving the city $5 million in tax credits to help create jobs, said Vic Grassman, the city’s economic development director.

More than $2 million has been distributed over the past two years, and the state has pledged to renew the grants for another five years if the program is successful, Grassman said. 

Part of the tax credit money went to Fab-Masters, a custom metal fabricator that got $28,000 to move into a facility that had been abandoned by a vehicle detailing company that followed GM out of town.

The money has allowed the company to hire 24 employees with the hope of reaching a payroll of 30 soon, Vice President Brian Hollis said.

“Other than that money, we’d still be struggling,” Hollis said, as welders cut metal to order in the shop behind him. “If we can stay in our own small town and create more jobs for our city, that’s a bonus for us. We’d rather stay in Janesville. We like it here.”

‘Far down the list’

Janesville’s economy has not recovered on government dollars alone, Beckord said.

“I don’t think the rebirth of Rock County can be traced back to federal assistance,” he said. “It’s a factor, but it’s one of many factors and quite frankly it’s quite far down the list.”

In a one-on-one interview with WISC-TV, Ryan challenged the idea that the president’s stimulus programs that paid for the Janesville innovation center had helped the economy.

“We shouldn’t be thinking about an earmark here or a spending bill there,” Ryan said from a room at Janesville Craig High School, his alma mater. “We should be thinking about do we have the right economic policies in place that give the economy growth, that give opportunity that get people going back to work.”

Ryan pointed to the U.S. unemployment rate, which has been above 8 percent for 42 straight months — something Obama said wouldn’t happen if his stimulus programs gained congressional approval.

On standby

GM decided to retain ownership of the Janesville facility, which opened in 1916 and is one of the largest and oldest U.S. auto plants, instead of shedding it as part of its 2009 bankruptcy proceedings and allowing the federal government to begin cleaning up and selling the property.

The plant has remained in standby mode ever since, and it’s unclear when — or if — that status will change, said Sean McAlinden, chief economist at the Ann Arbor, Mich.-based Center for Automotive Research.

“Why did they choose to keep Janesville instead of more modern plants? No one knows,” McAlinden said. The company would need demand for trucks to increase before opening the plant again, he said.

McAlinden said selling the facility for repurposing would be difficult because of cleanup costs estimated at $40 million that a private developer would incur.

About 47 percent of shuttered auto plants have been repurposed, although many of the properties have gotten federal help after GM and Auburn Hills, Mich.-based Chrysler Group LLC turned them over to the federal government in bankruptcy, according to Center for Automotive Research data.

“(Janesville) is an EPA nightmare because it hasn’t been cleaned up,” he said. “Developers would rather work on a site that’s already been cleaned that that one.”

The facility is the only GM plant currently on standby after the automaker reopened its plant in Spring Hill, Tenn., this year.

“We don’t want to get anyone’s hopes up (about Janesville),” said Bill Grotz, a GM spokesman, who declined further comment.

‘Wave the wand’

Chris Sitter’s goal of a new identity was fulfilled in May, when he graduated from Blackhawk Technical College with a degree in medical lab technology.  He’s now working an overnight shift at Mercy Hospital in Janesville, earning about as much as his $21 an hour wage at Lear.

“It’s like living the dream,” he said, adding that he’d moved on from assembly line life, unlike many of his former co-workers.

Sitter said he doesn’t blame Ryan or other politicians for GM’s decision to leave.

“So many people that don’t live here and are out of this area, who think that all (former Gov. Jim Doyle) or Paul Ryan or whoever it was, could wave the little wand they had and, ‘Oh, GM’s going to open the plant again,'” he said. “Unless you’re in that situation and have dealt with it and have seen all the things we’ve gone through in the last few years, you’re not going to really know how much went into it.”