By on June 29, 2009

So, GM is walking away from its half-share in the Fremont, CA, NUMMI plant. That much is clear. But what happens next? The Prius rebadge rumor lives on, but the signs are beginning to point towards a Tacoma rebadge. After all, GM has announced its intention to shut down its Shreveport, LA, plants by 2012. Which means an end to Colorado production there, and a giant sucking sound where GM’s small truck offering used to be. Will GM rebadge the Taco? And if so, why not keep the 50 percent stake in NUMMI? Make some sense of this, please.

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26 Comments on “Ask the Best and Brightest: Whither NUMMI?...”


  • avatar
    Nicholas Weaver

    What happens? It becomes “old GM”, toyota buys the 50% GM owns from Old GM for $1 more than anyone else would, and it keeps shoveling corollas and prii and tacos out the door…

  • avatar
    don1967

    I thought GM small trucks were the ones making the sucking sound. Is there any reason why they couldn’t simply be dropped?

  • avatar
    Lokkii

    Shutting down NUMMI is an accountant’s move.

    1. The vehicles made there are Pontiacs and not particularly good sellers; ergo unnecessary product.

    2.There are no shutdown costs as the plant will go to Toyota.

    3. GM gets to shed UAW workers at no expense or complaint, since Toyota will assume responsibility for their wage/benefit costs – even or especially if Toyota decides to shut down NUMMI.

    4. The center of pressure for the UAW from not in California but from the midwest. If a limited number of jobs are going to be “saved”, the UAW will sacrifice California first everytime.

    5. GM will take government to retool its new plants and it will be easier to use that money in locations where the press can’t say that part of the money is going to support GM’s foreign competitors.
    So, dropping NUMMI is an easy call/

  • avatar
    carguy

    A Tacoma re-badge makes a lot more sense than the Prius. If that happens, the Colorado will not be missed.

  • avatar
    psarhjinian

    Will GM rebadge the Taco?

    Not actually a bad idea. It keeps them in the game, and with a competitive entry, to boot.

    Of course, they much import a Mahindra, or just cede the whole compact truck market to Toyota and Ford. This is GM, strategy is not their thing.

    And if so, why not keep the 50 percent stake in NUMMI? Make some sense of this, please.

    Because they can’t afford it (likely), and/or because they don’t (or, as is more likely, won’t) learn anything from watching Toyota do their thing. Probably mostly the former and a little bit of the latter; NUMMI (like Saturn) is embarassing for GM, an admission that they couldn’t do something right, nor learn how to do it right when it was blindingly obvious.

    It’s also possible that Toyota might be planning to spin down NUMMI. After all, the Tacoma’s also built in Mexico and the Corolla/Matrix in Canada. They wouldn’t miss NUMMI much.

  • avatar
    ajla

    The Canyon and Colorado are really bad vehicles. Possibly the worst vehicles that one can purchase new in the United States.

    If GM doesn’t want to work something out with Toyota, they’d be better off just killing those trucks and not competing in the segment.

    Of course, a rebadged Tacoma (or Prius) would never happen because Fritz is not a fan of rebadging.

  • avatar
    Pch101

    This seems pretty straightforward. The Vibe is being discontinued, as GMNA sources its small car from other sources.

    It makes sense for GM to punt on NUMMI. Without the Vibe, why would GM continue with it?

  • avatar
    superbadd75

    Toyota really should just mothball NUMMI, punting the UAW in the process. Not sure what it’d cost them to move Taco and Corolla production in order to do that, but seems to me that it’d work out better for them in the long run.

  • avatar
    Syke

    Guess I’m an American truck guy. Was considering a Ranger to replace my S-10 when the day comes. If the new GM small pickup is nothing more than a rebadged Tacoma, then a Ranger keeps looking better to me.

    Sorry, but Japanese pickups hit me just as good as Japanese rock and roll.

  • avatar
    ConspicuousLurker

    Unless Toyota has some awesome need for Corollas or Tacomas, NUMMI is going to close. It’s the only assembly plant west of the Rockies (even with good rail access, I can’t imagine it’s cheaper than producing cars back east), it’s in the Bay Area (not the cheapest place to operate), and GM saddled them with the UAW. What’s the draw here?

    I’d say it might put Toyota at an advantage if the Obama administration chooses to impose tariffs, but can all those negative qualities be better than simply importing cars through the Port of Oakland (same county, about 15 minutes up the road)? It isn’t like Japan is running at capacity at the moment.

  • avatar
    NickR

    Sad really, I mean seriously…GM can’t build a competitive small truck so they have to rebadge a Toyota?

    I find it difficult to believe that there isn’t a sufficiently large mini-pickup market left for GM to take a stab at developing their own. They have a whole stable of inline 4s, an inline 5, and several suitable V6s, to power them.

    Normally I try to be fairly positive in my posts, but this really demonstrates some really epic incompetence on GM’s part, as far as I can see. Painful.

  • avatar
    Jeffer

    Syke, isn’t the Ranger just a rebadged Mazda?

  • avatar
    James2

    @Jeffer

    It’s the other way around.

  • avatar
    Matt51

    I just traded my 07 Tacoma. Could not take the harsh ride anymore. I had an 06 Sierra, much better ride. Nissan Frontier has a much better ride. Seats in the Taco suck. My back could not take anymore. Colorado has a much better ride, I would take it over the Taco. Tacoma also had bad wind noise around 75 mph and up, I was not there that often, but it was a loud groaner if you want to go fast.
    It handles well, has a nice bed tiedown system, but I would not buy another Tacoma.

  • avatar
    ZekeToronto

    I loved Tacos. Bought two of them, new. But in May of this year Toyota Canada repurchased my 2000 SR5 V6 4X4, which only had 96,000 miles on it, because it failed the frame test (i.e. they poked a hole through its frame). It had only been rarely (and gently) off-roaded and had no visible corrosion on its original paint.

    Although they treated me fairly (150% of book value) it sure shook my faith in the product.

  • avatar
    John Horner

    Apparently Toyota has been buying back and crushing scads of rusted frame trucks. How did they miss this for so long?

  • avatar
    Bimmer

    Hm…. where’s P71 when discussion comes to small GM trucks that suck?

    Here’s an idea for GM: build hybrid pick-up truck, so you can tow Volt when it breaks down!

  • avatar
    Whuffo2

    Unless Toyota has some awesome need for Corollas or Tacomas, NUMMI is going to close. It’s the only assembly plant west of the Rockies (even with good rail access, I can’t imagine it’s cheaper than producing cars back east), it’s in the Bay Area (not the cheapest place to operate), and GM saddled them with the UAW. What’s the draw here?

    The value to Toyota is that the plant is located in the state where they make the largest number of sales. The savings comes from not having to ship cars in from across the country or across the ocean.

  • avatar
    fincar1

    Well, maybe, but don’t forget California’s abysmal business climate; GM and Toyota both may be glad for an excuse to exit the state along with many, many other businesses.

  • avatar
    Jeff Puthuff

    The NUMMI plant should be large enough for Tesla Motors (and Space X and Solar City). Rename it MUSKI and Bob’s your uncle!

  • avatar
    Jerome10

    I’ll add a few things.

    1) NUMMI will probably close. That area of Fremont is surrounded by burbs, malls, and freeways. That land is quite valuable. Not sure how many homes will be built these days, but when I was there from 99-07, that was probably the fastest growing section of the Bay Area. But with the upcoming gov cuts, massive tax increases, and just the general housing mess, not sure if that’s still the case. Top that off with other points about location (we used to ship parts for the Vibe to NUMMI, and logistics were horrible, and much more expensive), I’m sure the taxes are high, it is a union shop (in a company that detests the union), and its California….anything related to manufacturing (especially of automobiles) is deemed “bad” and should be booted from the state at any cost to save the earth and our children. Not to mention California will then no longer have to consider the needs of the auto industry and will then be free to set auto policy for the rest of the country and it will be someone else’s jobs to lose or problem to solve. Arnold will love that crap.

    2) Maybe it won’t close. Toyota I suspect will do almost ANYTHING to avoid closing/layoffs. That has been a company identity for decades, and to do that could put a serious dent in their reputation. Of course we already know layoffs already happen all the time anywhere, but I suppose if you’re a “temp” worker, then it isn’t really a layoff. My old company used to pull that garbage all the time….wonder if they consider all of us let go with the 20% headcount reduction as “temp” and still make the “never had a layoff” claim….

    3) Toyota ain’t gonna share the Prius with GM. No way in hell. Why? Factory running full tilt. Talk about a massive brand image problem. I’d be willing to bet a Prius buyer is probably the most anti-GM car shopper on earth, since GM represents all that is “bad” about cars in this world. If they knew their car was also a Chevy, they’d probably have a seizure.

    4) Even if they do share a Prius or a truck with GM, again, why NUMMI? They have so much over-capacity at other plants that are newer, closer to suppliers, and cheaper to run that they could have their pick of plants. Mississippi is built but empty. Sitting around already rotting. TMMC West just opened and builds only the RAV4. Probably 70,000 units max for an entire plant. Then you’ve got TMMTX and TMMI for the full size trucks. TMMTX never should have been built either. I don’t know how things look at TMMBC (baja california). I think TMMK is running pretty well though. Basically Toyota doesn’t need at least 2 plants, probably 3, so NUMMI will likely go and any vehicles will just be moved someplace else.

    Good move by GM to bail. I probably would have. They’re enemies. I would NEVER share platforms with my biggest competitors. Why would Toyota or GM wanna do it? This bankruptcy is the perfect opportunity to get out from it. And the Volt vs Prius thing is likely to be big too. Why would GM want to take a Prius when they have the Volt coming? Makes no sense either. Trucks….maybe. But GM is known for their trucks. They should be able to build their own, competitive, truck if they want to.

    NUMMI is just no longer needed. By both Toyota and GM. It will go.

  • avatar
    Jeff Puthuff

    anything related to manufacturing (especially of automobiles) is deemed “bad” and should be booted from the state at any cost to save the earth and our children.

    Hyperbole.

    Please to be explaining why just up the bay from NUMMI is one of many Chevron oil refineries (that’s been there since the 20s); how Aerojet can possibly still manuf. rocket engines in my backyard; why Calif. has a city called “City of Industry” . . .

    California is still the nation’s largest market for new cars. California is the largest market for hybrids (damn those environmentalists and their demands for clean air and water!): 67,923 hybrids sold in 2008 (NY was second with 15,435). Data from R.L. Polk & Co.

  • avatar
    d002

    “After all, GM has announced its intention to shut down its Shreveport, LA, plants by 2012. Which means an end to Colorado production there, and a giant sucking sound where GM’s small truck offering used to be.”

    Well, no. The next generation Colorado will be built in Brazil.

  • avatar
    hans007

    first off you cannot build a new refiniery in CA without 50000 permits which is why no one has built one in 20 yeras which is why that refinery is still there.

    CA runs its own fuel blends so it refines its own fuel. SO that refinery will be there forever.

    Rocket engines… are used for uh rockets. the labor cost of a rocket is not as big a percentage as it is in a car.

    And of the 2 examples you have put up you forgot to mention all the ones who have closed because of CA ridiculous workmans comp, super high minimum wage, and other rules. They used to build planes, in socal for boeing and thats gone to the southern states. In fact when I was in high school I worked in a hewlett packard plant in compton. that was only 10 years ago, and that was moved to mexico for cheaper labor as well, and it was mostly because of the workmands comp and healthcare costs.

    Also regarding the land nummi is on , it is right by the freeway. If you have ever been to fremont you will know that there is tons of open land there. So I am not sure how much interest there is to rezone and develop that land especially since several freeways are right next to it and railroad tracks.

    IF anything closing nummi would probably greatly heart the east bay area’s economy, as i’m sure a lot of people are employed by nummi or surrounding suppliers/ companies . Not everyone up here works in tech.

    CA is a very expensive place to run any sort of business. Unless that business is very high margin, it just isn’t worth doing anything here if it requires a lot of labor.

    Hell I work here, and I work in software engineering, which is probably one of the least labor intensive jobs around per $ in revenue. And even some of that is leaving.

    I’m convinced CA is going done for. Our state is broke, our state govt is retarded, and they have taxed everyone including business to death to provide ridiculous workers to govt workers and 150 million dollar high schools in LA.

  • avatar
    charly

    The first 15 of those 20 years Oil companies were shutting down refineries because they were uneconomic so it didn’t really matter if you needed no permits or a million.

    I doubt Boeing pays minimum wage to a lot of its workers besides Cali is an expensve state to live in so a low minimum wage just means nobody earns minimum wage.

    “Also regarding the land nummi is on , it is right by the freeway. If you have ever been to fremont you will know that there is tons of open land there. So I am not sure how much interest there is to rezone and develop that land especially since several freeways are right next to it and railroad tracks.”

    So it is next to several feeways and a railroad and you claim that it is wothless. I feel like i have taken the bait.

    “Hell I work here, and I work in software engineering, which is probably one of the least labor intensive jobs around per $ in revenue. And even some of that is leaving.”

    I did as software is mostly labor

  • avatar
    NickR

    Makes me wonder if the Canadian equivalent (CAMI), shared between GM and Suzuki will survive. I guess it depends on a couple of new Gm models as Suzuki no longer manufactures there. (I still think Suzuki should bring their Kei cars here for urban markets.)


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