Toyota statement worries NUMMI workers

July 10, 2009 12:00:00 AM PDT
The country got some good news: General Motors has emerged from bankruptcy. But that announcement comes with a downside for the Bay Area -- the NUMMI auto plant in Fremont may be shutting down as a result of GM's effort to save itself.

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With GM out of the picture, NUMMI's other joint venture partner, Toyota, was at a crossroads -- continue alone or shut down.

It's leaning toward pulling the plug after 25 years.

The union contract covering 4,000 NUMMI workers expires August 8th, and while talks are underway for a new deal, Toyota on Friday issued a surprise announcement.

The statement read: "Under the current business circumstances, Toyota regrettably must consider taking necessary steps to dissolve the joint venture."

GM triggered the decision by pulling out of NUMMI and adding it to toxic assets still in bankruptcy court.

"Once GM pulled out, we knew the writing was on the wall. Who knows what could happen after that," said NUMMI worker Matt Freitas.

Toyota has also been hard hit by the recession, and NUMMI has put its workers on reduced hours.

"It's been hurting our pockets bad... having to be able to fluctuate and do a lot of money management. So everyone's holding on to what we have right now," said NUMMI employee Francisco Carrasco

The mayor of Fremont is worried about job losses.

"It's very, very unsettling. It's not just Fremont. It's regional. Those jobs are dispersed throughout the region, and I think it's a great concern locally and regionally," said Fremont Mayor Bob Wasserman.

For Bay Area GM dealers, though, the news of GM emerging from bankruptcy is good news.

"Now that you're an investor, even as much as I'm an investor, everyone's an investor in General Motors. I want to run an ad campaign that says protect your investment, buy GM. We'll start that next week," said John Moore from Moore Pointiac/Buick/GMC.

Dealers may be facing some new competition, though. GM announced it's working on a deal with eBay to sell cars online.

Could you save money this way? No one knows yet because eBay said: "at this time, no plans have been finalized with general motors. We hope to support gm's new company and vision going forward."

Consumers say the new GM is welcome news.

"It gives me confidence that the economy's getting better," said GM customer Jody Vasquez.

However, a management professor at Santa Clara University's business school isn't confident the road ahead will be easy.

Tammy Madsen was an engineer for Delco, a GM division.

"They're having to change the way they're managing their assets, so they're taking some dramatic actions. Now to the extent that they'll get imbedded in how they're designing cars, how they're coming up with new vehicle models and the whole process by how they innovate and develop new products, that's the big question," said Prof. Madsen, Ph.D.

The United Auto Workers local president at NUMMI wouldn't go on camera, but Sergio Santos said negotiations will continue Monday for a new contract -- a moot point if NUMMI closes.

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