Effects of G.M bankruptcy still roiling San Francisco Bay

Did the State of California get the raw end of the deal along with thousands of autoworkers when the Toyota-General Motors joint venture in Fremont shut down last month? That's what a state panel that gave New United Motor Manufacturing Inc. a $2 million training grant in February is investigating, now that the automobile facility is scheduled to close early next year. The acting chairman of the Employment Training Panel, the little-known state agency that awarded the grant, has asked NUMMI to withdraw its request for the money in light of Toyota's announcement in August that the facility would be closing, according to the San Francisco Chronicle newspaper. "We would never have approved this if they had told us they were closing this factory in a year," said the acting chairman, Barry Broad, a labor union attorney. But NUMMI and the California Manufacturers and Technology Association, which helped train the workers, said the facility deserved the money because the training had been ongoing for months before the decision to close the plant was made. "We were hopeful that (Employment Training Panel) funding, along with other state and local programs, would enable Nummi to continue production at its Fremont facility," CMTA President Jack Stewart said, according to the Chronicle. "We expect that contractual obligations regarding completed employee training will be met." In fact, panel rules permit the agency to recover training funds when the company that gets money closes down or leaves the state. But a panel official said the $2 million was an indirect contract with CMTA, not NUMMI, so the recapture provision did not apply, the newspaper said. NUMMI received more than $18 million in training funds prior to the dispute. A spokesman for Gov. Arnold Schwarzenegger told the Chronicle that the governor's office requested the investigation.

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.