This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How Paul Ryan Solves Romney's Auto Bailout Problem

Stocks in this article: F GM

DETROIT ( TheStreet) -- Mitt Romney had a problem associated with opposing the auto industry bailout, which obviously succeeded. He may have solved it by selecting Paul Ryan as his vice presidential running mate.

Ryan, who comes from Janesville, Wis., a GM (GM) town, backed the bailout. Specifically, he voted in December 2008, during the closing days of the Bush administration, to back a $14.5 billion loan to Chrysler and GM. The bill was opposed by most Republicans, including Romney, and died in the Senate, but Bush later authorized a $14 billion loan to the automakers from the Troubled Assets Relief Program.

"Romney had backed himself into a corner with uninformed statements about the auto bailout," said independent automotive analyst John Wolkonowicz. "So the choice of Ryan made lots of sense in that it diffuses the position Romney and the Republicans let their ideology back them into. I think (Ryan) is just what was needed to give Romney a fighting chance in the election."

Ryan "is a guy who understands the auto industry," said analyst Rebecca Lindland of IHS Automotive. "He lived in a town with a GM plant, and he would have grown up with the perspective that the auto industry is incredibly important to the fabric of the economy." This is how the auto industry sees itself, probably accurately.

Lindland noted that Ryan will likely appeal to auto workers, given his "combination of interests that Janesville people enjoy," including hunting and fishing as well as saving auto industry jobs.

The auto industry firmly believes, as Wolkonowicz said, that "the bailouts were essential to prevent a meltdown of the global auto industry and a consequent global depression.

"Had GM and Chrysler been allowed to go bankrupt, much of the global supplier community would have failed," he said. "This would have driven Ford (F) into bankruptcy as well as other global auto companies."

The Janesville GM plant opened in 1919. Employment reached as high as 7,000 in 1970, but had fallen to 1,200 when the plant closed in December 2008. Ryan worked closely with state Sen. Tim Cullen, a Democrat who is also from Janesville, to convince GM not to close the plant, the Milwaukee Journal-Sentinel reported Saturday on its political blog. "Cullen said that Ryan was more focused on the ultimately failed goal to keep the plant alive than getting political credit," the newspaper said.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs