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Toyota Kills NUMMI

by on Aug.27, 2009

NUMMI located in Fremont, California, was the only vehicle assembly plant in the state.

NUMMI was the only vehicle assembly plant in the state that is the single largest U.S. auto market

Toyota Motor Corporation’s board of directors has decided to close the New United Motor Manufacturing Inc. plant in Fremont, California despite some last minute pleas by political figures in California.

The plant is now scheduled to close in March, according to new reports on the West Coast, which quoted city officials in Fremont, California.

“Toyota’s announcement that it will close the NUMMI plant is devastating news for thousands of workers in California,” said UAW President Ron Gettelfinger.

Friends of NUMMI, a group recently organized in California to oppose the shutdown, also declined to comment on the reports.

Nonetheless, the reports were consistent with the news leaking out of Japan for the past week, which said the plant was doomed. Ironically, the plant had been the source of the Toyota Corollas that were the top car sold through the “Cash for Clunkers” program that ended earlier this week.

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The shut down of the plant will wipe out 5,300 jobs and could lead to the loss of more than 30,000 other jobs across California, where the unemployment rate just passed 12%.

Up until now, Toyota has never closed a factory in Japan or anywhere in the world. But the Japanese automaker’s long-standing commitment to a stable employment has been erased by the company’s recent, staggering, and billion dollar losses.

The recession and the drop in auto sales in the U.S. also have left Toyota too much production capacity in the U.S., says David Cole of the Center for Automotive Research in Ann Arbor, Michigan. Shutting down NUMMI was the one easiest ways to trim capacity, he claims.

However, the cost of the shutdown could easily run into the hundreds of millions of dollars and virtually all of the cost will have to be borne by Toyota because the “old” GM that owns a 50% share of NUMMI is bankrupt.

Toyota executives are reportedly furious over GM’s decision to abandon the plant. Insiders at GM say an offer was made to keep the plant going but Toyota stalled hoping for a more favorable deal. When Fritz Henderson, GM’s CEO, pulled out only days after the proposal, Toyota executives were taken by surprise. The rift over NUMMI also has effectively killed talk of any future GM-Toyota alliance, which were still alive last fall when then GM chairman Rick Wagoner visited Japan, looking for investment capital.

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4 Responses to “Toyota Kills NUMMI”

  1. Ken Zino says:

    Toyota official statement on NUMMI issued a day after this was published.

    Tokyo — TOYOTA MOTOR CORPORATION (TMC) announces it will end its Corolla and Tacoma production contract with New United Motor Manufacturing, Inc. (NUMMI) on March 31, 2010 and shift production of those vehicles to Toyota wholly-owned facilities.

    Following the end of the contract, Tacoma pickups will be produced at Toyota’s manufacturing facility in San Antonio, Texas, U.S.A., which specializes in trucks. Corollas will be sourced from its Cambridge, Ontario, Canada plant, as well as Japan to meet near-term demand. This will enable an uninterrupted supply of vehicles to dealers and customers in North America.

    TMC Executive Vice President Atsushi Niimi, who is responsible for North America, said, “After the decision by General Motors to withdraw from the NUMMI joint venture, Toyota conducted a thorough review of its alternatives in light of current and anticipated market conditions. Based on this review, we have determined that over the mid- to long-term, it just would not be economically viable to continue the production contract with NUMMI. This is most unfortunate, and we deeply regret having to take this action.”

    “We remain strongly committed to maintaining a substantial production presence in the U.S.A. and North America,” continued Mr. Niimi. “To that end, we will consider moving additional Corolla production back to North America over time.”

    Mr. Niimi further added, “NUMMI has been a groundbreaking model of Japan-U.S. industry collaboration and we are proud of its achievements. Toyota has learned much about automobile production in the U.S. through NUMMI, and these have been an invaluable 25 years. We would like to thank all of those involved with the joint venture, such as the suppliers, the local community, the union, and most of all the talented employees, who have worked closely and cooperatively with Toyota to contribute to the success of this pioneering joint venture.”

    NUMMI, based in Fremont, California, was established in 1984 as an independent joint venture of TMC and General Motors to produce cars for both companies. In May, GM announced its decision to end its contract to produce the Pontiac Vibe at NUMMI, and this production ceased on August 17. In June, as part of GM’s bankruptcy reorganization plan, GM’s holdings in NUMMI were placed among the assets to be liquidated of the Motors Liquidation Company (or “old GM”). These developments resulted in TMC’s decision to end its production contract with NUMMI next March.

    TMC intends to work collaboratively with Motors Liquidation Company and NUMMI to help NUMMI and all of its affected stakeholders in dealing with the impact of the decisions made by NUMMI’s customers.

  2. team member @ NUMMI 24 years says:

    the lack of news from the company and union is putting extreme amount of stress on the team members I was at gm fremont when we closed and that type of stress sent some people to some very harmful things to themselves! PLEASE TOYOTA AND LOCAL 2244 GIVE US SOME INFO, ON OUR RETIREMENT OR SEVERANCE PACKAGES!

  3. nummiworker says:

    UNTIL WE GET SOME ANSWERS FROM THE UNION AND THE COMPANY- WE SHOULD NOT BUILD ANY MORE CARS. IF WE LET OURSELVES BE YAKEN ADVANTAGE OF IT WILL BE OUR OWN FAULT IF WE END UP WITH NOTHING. THIS HAS GONE ON FOR TOO LONG. WHAT HAVE WE GOT TO LOSE BY STANDING UP TO THE COMPANY AND THE UNION? MOTHING. WE ARE LOSING OUR JOBS ANYWAY AND NO ONE SEEMS TO CARE. THE TIME IS NOW FOR ALL NUMII EMPLOYEES TO STEP UP AND TAKE A STAND

  4. Jack says:

    Be glad you had a job for so long. A lot of people have been out of work for a long time. Now it’s your turn to man-up and start the looking process. This is life.