Quote, originally posted by San Jose Business Journal »Friday, April 10, 2009Fremont NUMMI plant braces for GM falloutSilicon Valley / San Jose Business Journal - by David GollFREMONT — The restructuring and potential bankruptcy of General Motors Corp. could impact operations at California’s only auto manufacturing plant, New United Motor Manufacturing Inc., and create a domino effect throughout the region and state.The impact reaches beyond the 4,800 “well-paying jobs†at NUMMI, said Daren Fields, Fremont’s economic development director. He counts another 15,000 jobs dependent on the plant through its approximately 1,000 suppliers scattered throughout Fremont and neighboring East Bay cities, the Central Valley and Southern California.Among several suppliers contacted on the issue, business owners either declined comment or did not return phone messages.Future concerns pertain to GM’s mandate by the Obama administration to restructure itself. Last week, federal officials gave the corporate giant 60 days to devise a plan that will revamp its operations. GM and fellow troubled carmaker Chrysler LLC are seeking another $21.6 billion in government bailout funds, on top of the $17.4 billion they’ve already received.Closer to home that could mean GM’s Pontiac Vibe model manufactured at Fremont’s 5.3 million-square-foot facility through a partnership with Toyota Motor Corp. could be curtailed.NUMMI officials would not comment on this possibility, referring calls to GM.“As part of the restructuring, we will streamline brands in addition to eliminating employees and dealers,†said Dave Barthmuss, a spokesman for GM’s Western region based in Thousand Oaks. “We will focus on Chevy, Cadillac, Buick and GMC. Pontiac will take on a special niche role. We’re still working out a plan to determine exactly what that will be.â€ÂThe irony is that sales of the fuel-efficient Vibe hatchback’s production at NUMMI shot up sharply in 2008, with more than 70,000 manufactured, compared with 49,000 in 2007. Its high point was in 2003 with more than 74,000 vehicles built.Fremont officials are cautious about the future of NUMMI, which this winter reduced the hours of its 4,000 employees, members of the United Auto Workers, along with the elimination of Toyota Tacoma production lines.“Although we have some concerns because of the potential bankruptcy of GM, we have heard nothing regarding NUMMI,†Fields said.Fields added privately held NUMMI contributes $1.5 million annually in property tax and business license tax to the city. He said the company’s share of the city’s estimated $34 million in sales tax revenue this year is difficult to assess because its vehicles are not sold on site, though some may find their way to Fremont’s auto dealerships. Some additional sales tax revenue is derived from equipment upgrades at the plant, he said, but that is only done on a periodic basis.Though all car manufacturers are struggling, Bruce Kern, executive director of the East Bay Economic Development Alliance, said Toyota and GM have been leaders in trying to retain their work force through cross-training their employees.“They are also making efforts to stimulate demand for their vehicles,†he said. “This is the first such partnership of two giant manufacturers, and I’m optimistic they will find a way to stay competitive.â€ÂYet overall production at the 25-year-old, privately owned plant dropped steeply last year, compared with its peak in 2006 when the facility produced more than 428,000 vehicles. Those numbers decreased to nearly 408,000 in 2007 and 342,000 in 2008.At-a-glance:New United Motor Manufacturing Inc.Location: FremontPresident and CEO: Kunihiko “Kent†OguraFounded: 1984Number of employees: 4,800Web:
http://www.nummi.comPhone: 510.498.5500David Goll can be reached at 408.299.1853 or
dgoll@bizjournals.com.