The End Of NUMMI?

[micbarric]

Latest news from Bloomberg...http://www.bloomberg.com/apps/...K3uY4July 11 (Bloomberg) -- Toyota Motor Corp., the world’s largest automaker, may close New United Motor Manufacturing Inc., the California venture abandoned by General Motors Co., as its U.S. sales slump amid the recession. “We’re considering various options on the plant including whether it’s economically feasible to build cars alone without GM,” the company said in a statement released yesterday. “We regrettably must seriously consider dissolving the venture under the current business environment.”

[jimincalif]

It's hard to imagine Toyota keeping it. Given California's hostile business climate, high taxes, high energy costs, etc., it is unfortunately inevitable. As I understand it, Toyota already builds Corollas in Canada, not sure about the Tacoma assembly.

[vibebuilder]

the Tacoma is also assembled in Baja Calif

[jake75]

I assume that GM's Jt Venture interest is part of "Old GM" that is still in bankruptcy. One would think that interest is an asset. The only way Toyota may be able to get any value out of it might be to close it - and then sell it. I understand it sits on some valuable real estate.

[jimincalif]

Quote, originally posted by jake75 » I understand it sits on some valuable real estate. That's true, real estate in the bay area is valuable in general. Don't know about the NUMMI property and surrounding area specifically.Of course right now Calif real estate is in the tank. Home builders were rushing to dump property last year at pennies on the dollar to book a tax loss to carry back against the 2005-2006 profits and get some taxes back. Commercial R.E. is also tanking of late. Several shopping malls in foreclosure, some large resort hotels and large office building projects as well.It's a shame, the loss of those jobs will certainly hurt.

[ColonelPanic]

Hmm, didn't last week they said they weren't going to close since only a tiny fraction of products built at NUMMI were made for GM? I thought they said Toyota was strong enough to go without GM... Methinks they just want to bust the union and go to the south where it's cheaper to operate. Didn't see this one coming, no - not at all. Sucks to see the job losses. Just like it sucks to see the job losses from the countless other plant closures elsewhere (particularly the midwest.) Not a good time to work for the auto industry, not even if you assemble Toyotas.

[jimincalif]

Toyota COULD go it alone, but clearly they already have excess manufacturing capacity. With GM dropping out of NUMMI, it just adds even more capacity.Doesn't take an MBA to figure that if NUMMI is under-utilized and likely one of its highest cost plants, that it would be the first to go. Hope it's not true. Maybe someone should suggest to Penske that he license the Vibe and rebrand it a Saturn? But again, given the likely NUMMI cost disadvantage, just may not be enough profit margin.Our brilliant state government is on the verge of fiscal collapse. What should be happening, is UAW, Toyota and state legislators should all be working OT together to figure out what can be done to make NUMMI cost competitive (and again I'm just making an assumption that it's not.) But it will never happen, the loonies in Sacramento think they can chase good employers like NUMMI away and replace all the jobs with these mythical "green jobs". It has sure worked well in Spain. Each green job has cost 2.2 other jobs.

[jake75]

Quote, originally posted by ColonelPanic »Hmm, didn't last week they said they weren't going to close since only a tiny fraction of products built at NUMMI were made for GM? I thought they said Toyota was strong enough to go without GM... Methinks they just want to bust the union and go to the south where it's cheaper to operate. Didn't see this one coming, no - not at all. The article I saw after GM announced it was abandoning NUMMI quoted a Toyota official saying that this presented a difficult situation for Toyota.

[kostby]

Quote, originally posted by LATimes »California lawmakers scramble to keep state's last car factory openThe NUMMI plant, a joint venture of Toyota and General Motors, makes Toyota Corollas, Toyota Tundras and Pontiac Vibes. With troubled GM pulling out of the arrangement, Toyota plans to close the plant.As the likelihood grows that the NUMMI plant in Fremont, which employs 5,000, will close permanently in the midst of partner GM's bankruptcy, bills that offer tax incentives are championed.By Ken Bensinger July 16, 2009State legislators are scrambling to save the last remaining car plant in California.The Bay Area factory, which makes Toyota Corollas, Toyota Tundras and Pontiac Vibes, would receive sales tax benefits potentially worth millions of dollars under legislation introduced in the Assembly on Wednesday.The moves were prompted by the increasing likelihood that the plant, New United Motor Manufacturing Inc., or NUMMI, based in Fremont, could close permanently.The plant, which employs about 5,000 people, was opened as a joint venture between Toyota Motor Corp. and then-General Motors Corp. in 1984 and long praised as one of the nation's most advanced car factories -- a successful experiment combining Japanese and U.S. manufacturing techniques.But as part of its bankruptcy process, GM said in June that it would abandon the relationship, prompting Toyota to say last week that it "must also consider taking necessary steps to dissolve" NUMMI."We believe that plant is a public good," said state Sen. Roderick Wright (D-Inglewood), who co-wrote the Senate bill. He added that his own Los Angeles County district is home to parts suppliers that would be affected should NUMMI close. "The fact that we could lose our last car manufacturing facility is unconscionable."But amid Sacramento's grinding budget crisis, there is considerable doubt about how much money would be available to provide tax cuts to one of the world's largest companies -- and whether any amount of taxpayer-funded goodies would be sufficient considering the depths of the auto industry's woes."How many extra millions do taxpayers have to give Toyota to stay?" said Lenny Goldberg, executive director of the California Tax Reform Assn., who questions whether those kinds of incentives even work. "If you're going to give it away, give it away right."Manufacturers have long complained about the cost of doing business in California. The legislation proposed this week would, in part, reduce that burden for the auto industry, sponsors said.The bills, ABX4 31 and SB 830, would exempt NUMMI and other auto plants from sales tax on improvements and retooling of the plant, a process that can cost hundreds of millions of dollars. Toyota is not currently retooling NUMMI, but it could in the future to build fuel-efficient vehicles such as hybrids.The Senate bill goes further. It would designate the plant and the area around it an enterprise zone, which provides a variety of other tax benefits. In addition, the bill would cut state fees that NUMMI pays for utilities, and it would encourage state and local agencies to buy vehicles made at the plant.Legislators say they will urge Gov. Arnold Schwarzenegger to use the incentives as leverage with Toyota to keep the plant operating.A spokeswoman for the governor, Camille Anderson, said he had already "reached out" to Toyota and was working to coordinate a variety of efforts to keep NUMMI open.U.S. Sen. Dianne Feinstein (D-Calif.) is preparing a letter from the state's congressional delegation to Toyota's president, Akio Toyoda, that asks what California can do to preserve the factory, a spokesman for the senator said.Toyota, however, has given no sign that any incentives of the kinds proposed would sway it. Mike Michels, a spokesman for the automaker's U.S. operations, said the company was aware that legislation was in the works, but it had not requested any specific aid.He said the decision on NUMMI's future would be made in Japan, but he could not provide a timeline. "The economy remains a challenge, and we are still under capacity at most of our plants," Michels said.According to trade publication Automotive News, production at NUMMI is down 47% to date this year, compared with the same period a year ago, while Toyota's overall U.S. sales are down 38%.Unlike NUMMI, which is unionized, Toyota has nonunion plants in Mexico and Canada that also make the Corolla and the Tacoma, as well as a never-used new facility in Mississippi. GM said last month that production of the Vibe would cease in August.The United Auto Workers union is negotiating a new contract with NUMMI. The current, four-year contract expires next month.Assembly Majority Leader Alberto Torrico (D-Newark), who represents Fremont and is co-author of the Assembly bill, was among lawmakers who toured the plant last week."It's not a stretch to say that we're in very grave danger of losing the factory," said Torrico, who has been talking with local officials and leadership at the UAW about NUMMI's future. "We're talking about 5,000 jobs and all the income and sales and property taxes those generate."ken.bensinger@latimes.com"How many extra millions do taxpayers have to give Toyota to stay?" said Lenny Goldberg, executive director of the California Tax Reform Assn., who questions whether those kinds of incentives even work.Lenny, how clueless can you be? Toyota, GM, GM suppliers, and all their workers pay BILLIONS in tax revenue to the state of California!

[jimincalif]

Imagine that! Our idiot state legislators now realize California's hostile business environment is going to cost the state another factory, its 5,000 direct jobs, plus the all downstream effects and job losses at NUMMI suppliers and local service businesses.So they are looking to dole out lots of money to keep NUMMI, while doing nothing for all the other companies here. Thanks a lot. They've tried to do this for the entertainment industry but it hasn't worked, TV and movie production keeps leaving despite targeted incentives.Glad I sold my California business last year!

[micbarric]

Looks like it's over...Report: Toyota wants out of Fremont in August"Toyota Motor Corp. reportedly said Thursday that it wants talks to liquidate its plant in Fremont by the end of August.""The Japanese business newspaper Nikkei said Toyota plans talks with the United Auto Workers union on the timing of the closure and treatment of workers."

[scherry2]

and the other American plants are next.

[jake75]

Quote, originally posted by micbarric »Looks like it's over...Report: Toyota wants out of Fremont in August"Toyota Motor Corp. reportedly said Thursday that it wants talks to liquidate its plant in Fremont by the end of August.""The Japanese business newspaper Nikkei said Toyota plans talks with the United Auto Workers union on the timing of the closure and treatment of workers."The headline is misleading - Toyota wants to have talks with the Union by the end of August. It will probably be several more months before the plant closes. Even the paragraph "Toyota reportedly said Thursday that it wants talks to liquidate its plant in Fremont by the end of August." is imprecise.It should have said "Toyota reportedly said Thursday that it wants talks by the end of August to liquidate its plant in Fremont ."The rest of the artivle makes that clear - "The Japanese business newspaper Nikkei said Toyota plans talks with the United Auto Workers union on the timing of the closure and treatment of workers.We would like to reach a conclusion by the end of August, depending on the course of negotiations," the paper quoted Toyota spokeswoman Ririko Takeuchi as saying."However, not much hope that Nummi will be operating a year from now.Wasn't there talk about putting a ballpark there? Minimum wage vendors selling peanuts, popcorn and Cracker Jack replacing the autoworkers.

[LoZoneRanger]

What is the General's problem? Shell-shocked?Couldn't they easily keep making the Vibe with a different grille and badges and call it the Chevy Vibe??? Are they so dead-set against having the most reliable model in their lineup continue when they don't even have to produce it??? This seems ridiculous since the car is essentially a Corolla wagon to begin with. Perhaps the General would like to think he has a bead on the situation...like he has in the past! This seems to be a company drunk on its own destruction.Cheers.

[jake75]

On the other hand, I would think Toyota would be happy about the elimination of competition from a GM clone.Face it, this is largely a 4 dr sedan world. Buyers of Vibe type vehicles are a minority. In thinking back to all of the new cars I have purchased, none of them were 4 dr sedans. I leased 2 - for my kids really - a 1994 Camry and a 1996 Corolla, mainly because of economics - the lease deals were too good to pass up. So no one, GM etc., is going to worry much about the elimination of these special interest type cars.

[kostby]

Quote, originally posted by LATimes »Toyota considers halt to operations at California's last car plantThe Japanese automaker will begin talks with GM to end their 25-year-old joint venture, NUMMI, in Fremont.By Martin Zimmerman11:22 AM PDT, July 23, 2009Toyota Motor Corp. reportedly has decided to cease operations at the Bay Area auto assembly plant it shares with General Motors Co., though the Japanese automaker said a final decision hasn't been made to shutter the last remaining car plant in California.The Kyodo News agency, citing unidentified sources, said the Japanese automaker will begin talks next week to dissolve the New United Motor Manufacturing Co., or NUMMI, which opened in 1984 as a 50-50 joint venture between Toyota and GM.In a statement issued this morning, Toyota confirmed that it would begin talks with Motors Liquidation Co. -- the entity charged with selling the assets shed by GM in bankruptcy -- about dissolving the NUMMI partnership.However, "there are a number of difficult and complex issues that we need to address before making any final decisions with respect to NUMMI, and as a result, this process will take more time," Toyota said in its statement."When we talk about liquidating NUMMI, that's not saying we're closing the plant." said Mike Michels, a spokesman with Toyota Motor Sales USA in Torrance. "That's talking about liquidating the legal entity."The plant, which is in Fremont, Calif., employs about 5,000 workers making Toyota Corollas and Tacomas and Pontiac Vibes.Toyota's sales in the U.S. are down almost 38% so far this year as the auto industry suffers its worst slump in decades. As a result, the automaker has excess production capacity at its North American auto plants, including NUMMI, which can produce more than 400,000 vehicles a year.In the first six months of this year, the assembly line making the Vibe and the Corolla rolled out only 76,000 vehicles, a 25% decline from a year ago, while the line making the Tacoma saw an 83% drop in production, according to the Automotive News Data Center. The plant was unprofitable last year, Michels said.If a shutdown occurs, it will be yet another blow to California's struggling economy, eliminating the payroll at NUMMI as well as 30,000 jobs indirectly tied to the factory, according to the East Bay Economic Development Alliance.There have been proposals in Sacramento to provide tax breaks and other incentives to keep the plant open, though nothing has been finalized.martin.zimmerman@latimes.com

[silvrhawk7]

Original Signature from Kostby.....The Great NUMMI Massacre of 200935,000 CasualtiesEnvironmentalists, regulators, and bean-counters win.EVERYONE else loses. Actually i hear the Casualty count is in the 50,000 Range, IMO this sucks because if California doesnt watch it, it will soon become the next Detroit .... Hasnt anyone learned anything???

[kostby]

And the NUMMI debacle continues...Toyota wants $2 million for training workers for the plant they're closing in March.Quote, originally posted by Autoblog »The California Manufacturers and Technology Association, [...] provided the training and later worked hard to keep the NUMMI plant open, is on Toyota's side in the dispute, saying "a deal's a deal." While Toyota's request for $2 million even though it is closing the plant sounds like a PR nightmare given the horrible financial state California is in, it's hard to deny that they deserved to be compensated for the training. After all, the agreement was for training, not for continued employment. Perhaps next time the Employment Training Panel makes a deal to provide money for training, it'll stipulate that the workers being trained stay employed long enough to reap the benefits of their education. Link to full article --> http://www.autoblog.com/2009/0...worke/

[star_deceiver]

So what will cost more... Giving Toyota $2 million or taking it to trial and paying dozens of lawyers for as many months as it takes to resolve the problem!

[jerseymike68]

micbarric: hey thanks for the news...