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Defiance divided despite GM bailout

Saving town's plant doesn't secure votes for Obama

– For more than 50 years, the economic fate of this tiny city in northwest Ohio has been inextricably linked to the health of General Motors, its largest employer.

And so when two local lawyers put up a billboard in the cornfield across from Defiance's GM plant with a picture of the GM logo above the word "alive" and a photo of Osama bin Laden above the word "dead," you might have expected nods of approval.

Instead, in this deeply conservative corner of the state not far from the Indiana border, the billboard – and two others posted in town – have proved highly controversial.

For Democrats, this may be the town President Obama helped save with the auto bailout. But, in a twist, Defiance and places like it could end up saving Mitt Romney in all-important Ohio.

That's because Obama won Ohio four years ago in part by peeling off support in Republican-leaning parts of the state such as Defiance. Now, Romney is making a play to get those voters back, hoping that, here on the brightening side of the recession, the election is not all about the economy, and that juiced GOP turnout might swing a state that no Republican president has ever lost.

Romney has made Ohio a particular focus since the first debate – he or vice-presidential nominee Paul Ryan have appeared at 14 events since then.

He is talking to Ohioans such as Defiance City Administrator Jeffrey Leonard, who voted for Obama in 2008 but now says he is "very disappointed" in the president and undecided about his vote.

Leonard said he understands intimately what the loss of the GM plant would have done to his city.

But he does not believe the government should be in the business of protecting private executives from their own mistakes.

"Guess what? When you have poor management, you should accept the consequences," he said. "No exceptions for GM. No exceptions."

GM's turnaround

The government's bailout of GM and Chrysler has generally proved popular in Ohio, where one in eight jobs is connected to the auto industry.

On Friday, Obama began airing an Ohio ad in which auto workers talk about how they would have been affected had GM gone under, declaring that Romney, who opposed government aide for the industry, is "not one of us."

The bailout has been a staple of Obama's campaign in the state and one reason his poll numbers have remained more solid in the Buckeye State than other battlegrounds where support has slid in recent days.

But in this town that has been arguably helped by GM's recent resurgence more than anywhere else in Ohio, even Obama's most ardent supporters fear the bailout cannot puncture hardened partisan divisions and stop Romney's march.

"People's attitudes have become very firm," said Joseph O'Neil, who joined his law partner and their wives to design and fund the billboards. "It's gotten to the point where it's very hard to change."

For many of GM's workers in Defiance, the company's turnaround has meant a personal turnaround as well.

"There are guys in there working 12 hours a day, seven days a week. It's a lot of overtime in there," said Chris Mendez, 37, a GM electrician laid off for nearly 10 months in 2009 and now back on the job.

"There's no doubt in my mind. If it wasn't for the bailout, I don't know where I'd be at," said Mendez, who will be voting for Obama. "If it was up to Mitt Romney, we would have gone under."

The symbol of GM's new stability in Ohio is the Chevy Cruze, a small sedan manufactured not far from Youngstown.

And at the heart of the Cruze is its engine, poured at the GM foundry in Defiance. The largest auto-related foundry in the world, the Defiance plant at one time employed 5,000.

That number has shrunk over the years, part of a national contraction of what was at one the time the country's largest employer.

Before the 2008 economic crash, 1,700 worked at the plant. As car sales dropped off and GM slid toward insolvency, the plant slowed down. Residents say hundreds were laid off. GM would not confirm how many employees lost their jobs but confirmed that permanent layoff notices were issued in 2009.

The economic impact on the 17,000-resident town – and the 40,000-person surrounding county of the same name – was immediate. Residents stopped paying their electrical bills, then their mortgages. The grocery stores emptied. The town reopened its settled annual budget and cut $1 million out of $6 million in planned spending.

"If you can imagine, the banks, the lending community, the car dealerships, the restaurants – places that depend on people spending money – everything came to a halt. It just came to a halt," said Bob Armstrong, a former GM employee now in his third term as mayor of Defiance.

On the rebound

On the day in June 2009 that GM declared bankruptcy, accepting billions in government help as part of a restructuring process, Armstrong called the plant manager and asked what the future would hold for Defiance. Nobody knew, the plant manager told him.

Then he stopped into Kissner's Restaurant, a tavern operated continuously on Defiance's main street since 1903 – by the same family since 1928. "What's going to happen?" people called out to him as he walked in, he recalled.

Both of Armstrong's parents worked at the plant. His son was one those laid off in 2009. For the first time since the GM plant opened in 1948, Defiance contemplated a future without it. "We could have been a ghost town," the mayor said.

But GM emerged from bankruptcy after just over a month. While the government still owns significant GM stock, the company paid back $8 billion in loans ahead of schedule, part of $67 billion it received in government aid, and it posted record profits last year.

The auto bailout is popular in Ohio; registered voters said by a 2-to-1 margin in a September Washington Post poll that it had been mostly good for the state's economy.

It's been a weapon that Obama has used persistently against Romney, who argued in a November 2008 column that government should not extend the company loans.

In Defiance, the plant is humming again, its workforce above 1,300 and growing.

Disputes at factory

Whether Obama should get credit for Defiance's turnaround – whether GM really needed government help to recover and whether the bailout issue alone should determine votes – are topics of heated dispute.

For many plant workers, particularly those active in the United Auto Workers local, the answer is clear.

"The way I look at it is that he had my back when I was going to lose my job. So I have his back," said Sherilyn Baker, 39, a factory worker whose children received reduced-price lunches at school for the first time when she was laid off from GM for six months in 2009.

But Baker acknowledged that it is an uphill climb. Her sister will vote for Romney. Even at the plant, opinions are bitterly divided. She said two workers nearly came to blows recently in the plant cafeteria over whether to support Obama or Romney.

A hint about this area's political leanings can be found in the front lawn of a Catholic school not far from town hall – a marble tablet, fronted by a bed of flowers, erected in memory of the innocent victims of abortion.

This is a heavily Catholic and deeply religious area – abortion is the issue that pushed Baker's sister to the Republican Party. Some storefronts and homes have posted signs that read "Defend Religious Liberty" and "Protect the First Amendment," references to the Obama administration's tangle with Catholic hospitals about providing coverage for contraception for employees.

This could spell trouble for Obama, who won only 44 percent of the vote in Defiance County in 2008 – still six points better than Sen. John Kerry's showing in 2004. Closing the gaps in GOP strongholds was part of what allowed Obama to win 51.3 percent of the vote in Ohio. He was the first Democrat to top 50 percent since Lyndon Johnson in 1964.

Each morning for more than five decades, the day has begun the same way in Defiance – with farmers bellying up to the bar at Kissner's and an evolving group of businessman gathering around what is known as "the big table."

They gossip about town affairs, talk politics and tease one another. A favorite target is Mayor Armstrong, jabbed routinely for his tendency to hand out combs imprinted with his name instead of business cards – an idea born of a long-ago career as a barber – and even more often for his Democratic politics.

Like most of Defiance, the big table mostly votes Republican.

"The guy who's in there is absolutely not taking care of the economy. In fact, he's killing the economy," said big-table regular Larry Woods, 56, an insurance salesman.

At this table, the most pressing issue of the election is federal spending and the nation's rising tide of red ink. And while they agree a GM plant closure would have a devastating impact on their town, they believe the company could have survived without aid that hit the government's bottom line.

"Wouldn't they just have filed Chapter 11, just like other companies?" Woods asked. "It might have taken a little longer, but I assume the same thing would have happened."

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