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NUMMI is jointly owned by G.M. and Toyota. The news from G.M. sent Wall Street into another major sell off with the Dow Jones Average falling 280 points, to just below 6,600.
The possibility of G.M. going under could have a major effect on California's only major car plant.
Sooner or later, the future of the NUMMI plant will be on the line. With cars not selling, the plant has avoided layoffs for its 4,800 workers by reducing the work week to 32 hours over four days, but as financial pressure mounts, G.M. may have to pull the plug on its 25-year-long joint venture.
"I suspect that they will pull out," says Edwin Duerr, Ph.D.
Duerr has tracked NUMMI since its creation in 1984. He is professor emeritus of International Business at San Francisco State University. Another, less drastic option is to initiate layoffs.
"I think it isn't an inflexible rule that they can't lay off people. It's just that they will really try to avoid it. It may, though, in a sense be a drag on General Motors," says Duerr.
NUMMI management turned down a request for an interview. A call to United Auto Workers Local President Sergio Sanchez was not returned.
Dr. Duerr says NUMMI has provided the two automakers unequal dividends.
"Now the cars are of the same quality, come off the same assembly line, but have different nameplates. But G.M. had trouble from the beginning selling its G.M. cars because Americans had a distrust of the quality level," says Duerr.
He thinks Toyota would keep the plant running if G.M. pulls out. So do NUMMI wokers. "There's a lot of faith in Toyota and Toyota's products. We have faith that it will," says a NUMMI worker.
G.M. has asked for $30 billion in federal loans, but it could be difficult to get.
"Any money that we give to the auto industry must be considered a life line, not life support," says Speaker of the House Nancy Pelosi (D).
The future of the NUMMI plant rests not just with G.M. but also with Toyota, which has also been struggling during the economic turmoil, but its problems are not as bad as G.M.'s.
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