Commentary Magazine


Topic: GM

Fact-Checkers Wrong on Ryan GM Claim

The Associated Press and other fact-checkers are insisting that the line about the Janesville GM factory in Paul Ryan’s speech last night was inaccurate — and once again, the fact-checkers are wrong. Here’s the AP’s allegation against Ryan:

RYAN: Said Obama misled people in Ryan’s hometown of Janesville, Wis., by making them think a General Motors plant there threatened with closure could be saved. “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.”

THE FACTS: The plant halted production in December 2008, weeks before Obama took office and well before he enacted a more robust auto industry bailout that rescued GM and Chrysler and allowed the majority of their plants — though not the Janesville facility — to stay in operation. Ryan himself voted for an auto bailout under President George W. Bush that was designed to help GM, but he was a vocal critic of the one pushed through by Obama that has been widely credited with revitalizing both GM and Chrysler.

The AP might want to check back on its own reporting on the plant closure, starting with this article from April 19, 2009, headlined “GM plant in Janesville to close for good this week”:

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The Associated Press and other fact-checkers are insisting that the line about the Janesville GM factory in Paul Ryan’s speech last night was inaccurate — and once again, the fact-checkers are wrong. Here’s the AP’s allegation against Ryan:

RYAN: Said Obama misled people in Ryan’s hometown of Janesville, Wis., by making them think a General Motors plant there threatened with closure could be saved. “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.”

THE FACTS: The plant halted production in December 2008, weeks before Obama took office and well before he enacted a more robust auto industry bailout that rescued GM and Chrysler and allowed the majority of their plants — though not the Janesville facility — to stay in operation. Ryan himself voted for an auto bailout under President George W. Bush that was designed to help GM, but he was a vocal critic of the one pushed through by Obama that has been widely credited with revitalizing both GM and Chrysler.

The AP might want to check back on its own reporting on the plant closure, starting with this article from April 19, 2009, headlined “GM plant in Janesville to close for good this week”:

Production at the General Motors plant in Janesville is scheduled to end for good this week.

GM spokesman Christopher Lee says operations at the southern Wisconsin plant will cease Thursday.

About 1,200 employees were let go just before Christmas when GM ended SUV production at the plant.

Some 100 workers were retained to finish an order of small- to medium-duty trucks for Isuzu Motors Ltd.

Lee says most of those workers will be laid off Thursday. He says others will be kept on to help guide the plant’s shutdown.

The Janesville plant ended its SUV production line and laid off over 1,000 workers in December 2008, but the plant didn’t officially close. It continued to churn out an order of Isuzu trucks until April 2009, while the local union lobbied GM for a lifeline. In May, GM put the plant onto standby, meaning that it wasn’t completely shutting the door on it. There was some hope the plant would be able to resume production — and Wisconsin’s bipartisan congressional delegation, including Paul Ryan, scrambled to find a way to keep it alive — but it never happened.

To simply say that the plant “halted production” in December 2008, like AP does, is both inaccurate and misleading. It was more complicated than that. If the media wants to criticize Ryan for not being “nuanced” enough and failing to praise Obama for brilliantly saving GM, that’s fine. But Ryan’s comments weren’t inaccurate.

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UAW Enriched, Now What About the Taxpayers?

You might recall that three years ago, GM negotiated wage cuts with the UAW. That was supposed to lower the rate for new hires, to $25.65 per hour, a significant reduction over current rates of approximately $60 per hour. But that was a charade, and GM has yet to cut a single employee’s rate. This report explains:

GM can’t add new workers at the lower wage yet. It still has 5,000 laid-off workers who, under their contract terms, have first crack at any union jobs that the company adds, and most would return to work at the higher pay level. …

“That’s probably one of the reasons the UAW agreed to [the lower wages]. They knew right off the bat there wouldn’t be a lot of leeway for the companies to hire new workers,” said David Whiston, an auto analyst at Morningstar Inc. “There will always be this fundamental difference—that the Detroit companies have union shops” and the U.S. plants of foreign makers don’t.

When might the new, lower wages kick in? Hard to say, GM declares: “As GM’s U.S. sales recover, the company is ramping up production by adding shifts and overtime at several factories. These moves will allow GM to bring back many laid-off workers, but GM spokeswoman Kim Carpenter said the company doesn’t know when hiring will begin for the lower-wage jobs.”

This is what the taxpayers have been subsidizing. And certainly the safety net supplied by the Obama administration for the benefit of its union patrons prevented any real cuts for UAW workers, which in a non-bailout situation or an ordinary bankruptcy would have been among the first steps GM would have been forced to take.

And now we hear that with GM’s improved fortunes, the administration is considering an IPO to unload the 61 percent of GM shares it holds. How about this? In appreciation for having propped up a losing firm and sustaining the exorbitant compensation of UAW workers, any funds obtained from an IPO should go back to the taxpayers in the form of an income tax rebate. In fact, it sounds like just the sort of issue Republicans should present to the voters in November. One party wants government to keep the money; another wants to return it to the taxpayers. One party has used taxpayer funds to enrich Big Labor; the other wants to put money in everyone’s pocket. Sounds like a defining issue, and a stark reminder that the candidate who talked about fiscal responsibility and taming special interests has not practiced what he preached.

You might recall that three years ago, GM negotiated wage cuts with the UAW. That was supposed to lower the rate for new hires, to $25.65 per hour, a significant reduction over current rates of approximately $60 per hour. But that was a charade, and GM has yet to cut a single employee’s rate. This report explains:

GM can’t add new workers at the lower wage yet. It still has 5,000 laid-off workers who, under their contract terms, have first crack at any union jobs that the company adds, and most would return to work at the higher pay level. …

“That’s probably one of the reasons the UAW agreed to [the lower wages]. They knew right off the bat there wouldn’t be a lot of leeway for the companies to hire new workers,” said David Whiston, an auto analyst at Morningstar Inc. “There will always be this fundamental difference—that the Detroit companies have union shops” and the U.S. plants of foreign makers don’t.

When might the new, lower wages kick in? Hard to say, GM declares: “As GM’s U.S. sales recover, the company is ramping up production by adding shifts and overtime at several factories. These moves will allow GM to bring back many laid-off workers, but GM spokeswoman Kim Carpenter said the company doesn’t know when hiring will begin for the lower-wage jobs.”

This is what the taxpayers have been subsidizing. And certainly the safety net supplied by the Obama administration for the benefit of its union patrons prevented any real cuts for UAW workers, which in a non-bailout situation or an ordinary bankruptcy would have been among the first steps GM would have been forced to take.

And now we hear that with GM’s improved fortunes, the administration is considering an IPO to unload the 61 percent of GM shares it holds. How about this? In appreciation for having propped up a losing firm and sustaining the exorbitant compensation of UAW workers, any funds obtained from an IPO should go back to the taxpayers in the form of an income tax rebate. In fact, it sounds like just the sort of issue Republicans should present to the voters in November. One party wants government to keep the money; another wants to return it to the taxpayers. One party has used taxpayer funds to enrich Big Labor; the other wants to put money in everyone’s pocket. Sounds like a defining issue, and a stark reminder that the candidate who talked about fiscal responsibility and taming special interests has not practiced what he preached.

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