Thursday, August 27, 2009
Toyota takes clunker money and runs
News that Toyota will bail from a 25-year partnership with General Motors to produce vehicles at the only automobile manufacturing plant still operating in California should come as no surprise to anyone -- GM already announced in a bankruptcy court filing in June that it was abandoning its share of the joint venture. California officials tried to save the NUMMI plant in Fremont by offering tax breaks and other incentives, according to the Reuters international news service, but Toyota decided to close the plant as part of its global cost-saving strategy. The plant, and the combination of GM and Toyota, was an innovation when it reopened in 1984 to produce a redesigned Chevrolet Nova using Japanese manufacturing techniques. It had previously been a GM manufacturing facility. It now employs more than 4,000 autoworkers and supports as many as 35,000 supplier jobs, and will continue to build Toyota Corolla cars and Tacoma trucks until March 31. GM, which is reorganizing under court protection, ceased production of the Pontiac Vibe at the plant last month, and is discontinuing the Pontiac brand. California Governor Arnold Schwarzenegger said Toyota's announcement was a "sad day" and said plans were underway to convert the plant to other uses, Reuters said. The plant was the only Toyota facility in the United States with a contract with the United Auto Workers union. A union official said the decision to close the plant was devastating. "This is no time to close a highly successful manufacturing facility," said Jimmy Settles, a United Auto Workers vice president. "California is one of the most important markets for Toyota." Perhaps ironically, Toyota was the largest recipient of stimulus dollars from the U.S. government's so-called "Cash for Clunkers" program that pumped $3 billion into the auto industry in an effort to boost sales. California Sen. Dianne Feinstein said Toyota officials told her office that GM's pullout from NUMMI left the plant with excess capacity and no outlook for increased demand in the current economic environment, according to Reuters. Toyota also complained that the plant was old and that production costs were too high in California, Reuters said.