NUMMI shutdown on track, despite last-minute study

March 3, 2010 6:31:51 PM PST
Toyota has dented the impact of a blue ribbon commission's report out today by making a $250 million commitment to fund transition support for NUMMI's Fremont work force. California's last major auto plant is scheduled to shut down March 31. Until last year, NUMMI operated as a joint venture by General Motors and Toyota. GM stopped ordering vehicles and pulled out of the venture as part of its bankruptcy filing.

A 33-page report was released on Wednesday in Sacramento by State Treasurer Bill Lockyer and UC Berkeley Professor Harley Shaiken, who served as commission chairman. Entitled "Commitment Is a Two-Way Street," the white paper was a last-ditch effort by a coalition of consumer groups, labor and government to make a compelling argument to keep NUMMI open.

The commission plans to request a meeting with Toyota president & CEO Akio Toyoda to press its case. NUMMI spokesman Lance Tomasu says it's proceeding with its timetable to roll the final vehicle off the assembly line four weeks from today.

The report says closing NUMMI is "a decision of choice, not necessity." It argues that Toyota and California would benefit keeping the plant open in three ways: Helping Toyota to restore its tarnished image, caused by the current recall over sudden acceleration issues; keeping 4,700 plant workers and as many as 25,000 related jobs at contractors during a recession and period of high unemployment; and helping California to blaze a new trail toward a green future.

The study suggests that NUMMI could be turned into a production center for hybrid and plug-in electric vehicles. Prof. Shaiken points out that California is Toyota's largest auto market, and with the state's ambitious goals to reduce carbon emissions, its consumers would embrace alternative energy vehicles.

Sergio Santos, United Auto Workers Local 2244 president, said he's hopeful the report will convince Toyota that NUMMI should stay open. Fremont Mayor Bob Wasserman, a member of the blue ribbon commission, said he just received the report and was unavailable for comment. According to data developed by the East Bay Economic Development Alliance, $1.4 billion in pay and benefits will disappear when NUMMI closes -- $512 million to employees and $904 million to suppliers and ancillary workers. The white paper also pegs the cost of retraining of NUMMI 4,700 workers at $430 million.

That's based on a Council of Economic Advisors estimate that it takes $92,000 to create a job. The prospect of NUMMI workers finding new jobs anytime soon is dim, the report says. It notes, "more than one-third of all unemployed in California in December 2009 had been jobless for 27 weeks or more, a 156.2% increase over a year earlier."

That's based on a Council of Economic Advisors estimate that it takes $92,000 to create a job. The prospect of NUMMI workers finding new jobs anytime soon is dim, the report says. It notes, "more than one-third of all unemployed in California in December 2009 had been jobless for 27 weeks or more, a 156.2 percent increase over a year earlier."

Toyota's $250 million transition grant could be considered a form of payback for state funding and other benefits NUMMI has received through the years. The report says NUMMI has received over $18 million from the state for training. "Millions more have gone to NUMMI suppliers for training," it says.

Some costs may never be recovered, such as the $410 million the Port of Oakland spent to dredge its harbor for the large container ships that delivered Japanese made parts to NUMMI. However, that expenditure will benefit other ships as well.

Toyota today took the unusual step of slamming its one-time partner for not making a similar commitment to NUMMI workers. Toyota Motor North America Group Vice President Jim Wiseman said, "the support we are providing to NUMMI underscores our commitment to do our part." Wiseman said NUMMI produced over one million vehicles for GM during the 25-year-long joint venture operation.

NUMMI has said it will not comment on the white paper.


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