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Posts Tagged ‘New United Motor Manufacturing Incorporated’

High Cost NUMMI Plant on Chopping Block

Historic UAW contract expires next month, and its only California presence hangs in the balance.

by on Jul.21, 2009

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Toyota has never closed a plant anywhere.

As Toyota Motor Corporation ponders the fate of New United Motors Manufacturing Inc. in Fremont, California in the San Francisco Bay Area, the United Auto Workers is fighting to protect is last foothold in manufacturing on the West Coast.

UAW officials have confirmed that the union has been holding talks with Toyota about NUMMI, after Toyota said the plant is no longer competitive because of its location and labor costs. With the cessation of production of the Pontiac Vibe, and General Motors Company’s announcement that it is abandoning its share of NUMMI, the future of the huge plant, already working at partial capacity, is tenuous at best. Toyota owns 50% of the plant. 

The NUMMI plant, which has more than 5,400 employees, including 4,500 union members, has the capacity to build more than 420,000 cars and trucks annually. 

NUMMI is also the only automotive assembly plant operating in California where the unemployment rate now hovers at more than 11%. The San Francisco congressional delegation includes House Speaker Nancy Pelosi and Democrat George Miller, the chairman of the House Committee on Labor and Education.

No Costs!

No Costs!

“We need to determine whether it can be economically feasible to contract with NUMMI without GM. Under the current business circumstances, Toyota regrettably must also consider taking necessary steps to dissolve the joint venture,” the Japanese automaker said in a statement.

Toyota has never closed a plant anywhere in the world.

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General Motors Abandons NUMMI this August. Toyota faces Tough Choice on Plant’s Future

Latest development comes as GM prepares for a vital bankruptcy sale hearing next week in New York.

by on Jun.29, 2009

Toyota Tacoma Access Cab 2009

"It may take some time before the future of NUMMI is determined." It won't be part of GM, though.

The longer term prospects for the survival of the NUMMI plant in California just diminished as GM has announced it intends to abandon the plant as part of its bankruptcy proceedings.

Troy Clarke, president, GM North America, has just issued the following statement: “As part of its long-term viability plan, General Motors has decided that its ownership stake in the New United Motor Manufacturing Incorporated (NUMMI) joint venture with Toyota will not be a part of the New GM.”

Insiders say that GM made Toyota an offer for a new product, but the Japanese company delayed and stalled. Then, Japanese executives were completely surprised when Fritz Henderson, GM’s CEO, made a decision to stop talking and move forward by stopping all GM production at what was already an under utilized plant.

“While we respect this decision by GM, the economic and business environment surrounding Toyota is also extremely severe, and so this decision by GM makes the situation even more difficult for Toyota. We will consider alternatives by taking into account various factors,” said Mike Goss of Toyota Motor Engineering & Manufacturing North America Incorporated.

The Pontiac Vibe termination was previously announced a little more than one week ago. However at that time both GM and NUMMI spokespersons said that the current intention of both Toyota and GM is to continue NUMMI as a 50/50 venture. That is now officially no longer the case, and it presents Toyota with a problem since NUMMI is the only UAW plant in North America that Toyota is dependent on.

Japanese makers almost universally prefer non-unionized facilities here. And if the GM bankruptcy goes as planned, contracts such as the one governing NUMMI will be invalidated and Toyota will have to decide whether to buy the  facility or shutter it,  and then what does it do with the union?

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If  Toyota buys NUMMI out of bankruptcy, the UAW contract governing the plant would presumably be invalid, allowing it to shed the union, but it is a potential political nightmare of the kind Japanese makers normally try to avoid. The existing workforce could strike and demand that the UAW still represent them.

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Pontiac Vibe to Cease Production at NUMMI

The future of the union plant shared with Toyota is unclear.

by on Jun.18, 2009

Toyota Matrix 2009-2010

The longer term prospects for the plant are by no means clear, since NUMMI is the only UAW plant in North America that Toyota is dependent on.

The Pontiac Vibe crossover vehicle will go out of production at the end of this August at the New United Motor Manufacturing Incorporated (NUMMI) facility that is jointly operated by GM and Toyota in Fremont, California.

It is expected that the Toyota Corolla built there, which is closely related to the Vibe and shares the same basic architecture, will continue for the time being.

However, the longer term prospects for the plant are by no means clear, since NUMMI is the only UAW plant in North America that Toyota is dependent on. Japanese makers almost universally prefer non-unionized facilities here. And if the GM bankruptcy goes as planned, contracts such as the one governing NUMMI will be invalidated.

Troy Clarke, President, General Motors North America, said that no replacement for Vibe production has been determined. “GM and Toyota remain in active discussions regarding potential future production at NUMMI,” Clarke said.

The latest cutback is part of GM’s long-term viability plan, which — after the U.S. Treasury Department said it wasn’t viable — was modified to eliminate the Pontiac brand, instead of retaining it as a niche product as originally proposed.

A NUMMI spokesperson confirmed that it will not manufacture the Pontiac Vibe after August 2009, but will continue to produce the Toyota Tacoma and Toyota Corolla.  

“NUMMI will focus on building high quality vehicles and work on lowering its costs while GM and Toyota discuss NUMMI’s future direction. It is our understanding that the current intention of both Toyota and GM is to continue NUMMI as a 50/50 venture,” according to Lance Tomasu from Communications and External Affairs at NUMMI.