SpinCheck: A Factory and the Media's Ryan Derangement Syndrome

SpinCheck: A Factory and the Media's Ryan Derangement Syndrome

With even Democrats acknowledging that Ryan gave a strong performance last night, the media is in full spin mode attacking the Vice-Presidential candidate. They are hyperventilating that Ryan “lied” in a story about Obama promising to keep open a Janesville, WI GM factory, which eventually closed during Obama’s first year in office. And by “lie” I guess they mean that Ryan told a true story they don’t like. Such is the state of political reporting these days.  

First, let’s review what Ryan said last night:

President Barack Obama came to office during an economic crisis, as he has reminded us a time or two.  Those were very tough days, and any fair measure of his record has to take that into account.  My home state voted for President Obama. When he talked about change, many people liked the sound of it, especially in Janesville, where we were about to lose a major factory. 

A lot of guys I went to high school with worked at that GM plant. Right there at that plant, candidate Obama said: “I believe that if our government is there to support you … this plant will be here for another hundred years.”  That’s what he said in 2008.

Well, as it turned out, that plant didn’t last another year.  It is locked up and empty to this day.  And that’s how it is in so many towns today, where the recovery that was promised is nowhere in sight. 

Candidate Obama made his statement in February 2008. At the time, local residents feared the closure of the factory as GM struggled to compete. Obama made his comments explicitly in the context of the likelihood that the factory would be shut down. If the government was there to support the auto industry, that specific plant would be around “for another hundred years.”

As the companies fortunes worsened throughout 2008, GM announced that the Janesville plant would likely close sooner than expected. Candidate Obama reiterated his promise with specifics:

As president, I will lead an effort to retool plants like the GM facility in Janesville so we can build the fuel-efficient cars of tomorrow and create good-paying jobs in Wisconsin and all across America.”

Note that, “I will lead an effort”. 

In December 2008, GM laid off most of its workers at the plant and shut down SUV production. This is the date the media has chosen as when the plant “closed.” That date is safely in the Bush Administration, you see. But, the plant didn’t close then. It remained open, with a much small workforce, producing light trucks for Izuzu. It ended production in April 2009. But, even now, it isn’t officially “closed.” According to GM it is on stand-by and may be opened for production again in the future. 

Ryan’s larger point wasn’t about this specific plant, but rather the lack of economic growth under President Obama. If the economy recovered, it is very likely the Janesville plant would be reopened.

Auto industry observer David Cole, chairman emeritus of the Ann Arbor, Mich.-based Center for Automotive Research, said it would be premature to say the Janesville plant will never reopen.

“If we get back to any kind of a reasonable market, with 15- or 16 million sales, then I think that’s going to require Janesville as well,” he said.

But the economy is recovering more slowly than people anticipated. “That’s really the key factor,” Cole said. “You’re going to see the company be exceedingly cautious on overcapacity. And they obviously didn’t need a commitment for Janesville to get the UAW’s support.”

Here’s the thing the media hates; we’re not going to “get back to any kind of reasonable market” under Obama’s policies. The factory remains idle simply because there isn’t a demand for more autos, due to the economic slowdown. Obama generally promised that his policies would help factories like Janesville remain open. He specifically promised that his policies would enable Janesville to retool its aging facility to make it more competitive. (One of the reasons Janesville remains shuttered is that it is GM’s oldest factory and will need to be updated.) 

He also promised that his initiatives, i.e. stimulus, renewable energy, bailouts, cash for clunkers, etc., would return the country to robust economic growth. The kind of growth that would have fueled a need for Janesville’s production capacity. That hasn’t happened. 

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