By on June 30, 2009

Will they or won’t they? First, the factory. GM’s announced they’re bailing on NUMMI. Bloomberg says Toyota may be considering the same thing. Once GM turns its door keys over to Toyota, the Fremont, California, plant becomes Toyota’s highest-cost factory and the only one manned by UAW workers. With other US plants’ excess capacity (including a mothballed Mississippi manufacturing facility) and lower operating costs, ToMoCo may well pull the plug on NUMMI. Problem: PR. Shutting down a plant in economically-challenged California (Toyota’s biggest market) and putting another 5K people out of work wouldn’t endear the Japanese automaker to the public or their politicians. (GM, of course, would get none of the blame.) Now about that GM – Toyota Synergy Drive deal . . .

Bloomberg’s “two people familiar with the plan” said that before GM decided to cut their losses and run, Toyota had considered building a version of the Prius hybrid for GM at NUMMI. While GM’s exit from the joint venture won’t necessarily preclude them doing this, it will probably cool the relationship between the two automakers.

Still, life during wartime, eh? You can bet NUMMI will be high on the agenda during this summer’s scheduled pow-wow between GM CEO Fritz Henderson and Toyota CEO Akio Toyoda. Given GM’s many on-again, off-again product plans, everything’s on the table. Still.

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22 Comments on “Toyota: Lights Off at NUMMI? GM Synergy Drive?...”


  • avatar
    samosa

    It would probably make sense for Toyota to close off the NUMMI Plant. We’ll see what the new President of Toyota does…

    PR shouldn’t matter, most people usually forget the fact that “Toyota laid off 5000 workers” except for those who got laid off. Numbers (cost) are more important to a corporation, and if Toyota wants to stay afloat, it is necessary for them to chop off unnecessary extras.

    What I don’t understand about the whole recession is:

    1.) Cars are still being sold, its not like there are 0 sales. Why are companies struggling if they are selling less? Shouldn’t they be able to adjust according to need?

    2.) May sound absolutely insensitive: Does anyone else look at a recession as a way to increase efficiency by eradicating (Bankruptcy, lay-offs, ceasing production, whatever you want to call it) unnecessary things? Just like GM had Pontiac and Hummer, did we really need those two brands? Do we really need a fancy-cake bakery? Or thirty slightly-different types of the same thing (Food, Cars, TV, etc.)

  • avatar
    Lorenzo

    GM won’t get the blame? It’s a partnership. GM is backing out of it. GM owns the factory. The factory will be turned over to “old” GM and sold off.

    Expect Toyota to let everyone know their partner bailed out and sold the factory out from under them. Toyota will walk away and GM will get ALL of the blame.

  • avatar
    superbadd75

    Life during wartime? This ain’t no party. This ain’t no disco. This ain’t no foolin’ around. GM’s gotta do what they gotta do, and Toyota must do the same. It seems like Toyota’s best interest would be to mothball NUMMI and kick the UAW to the curb, but you have a good point regarding PR in California. If they could shift the blame to GM, then maybe it could make sense. Another possibility would be to build something else there to better utilize capacity. The Prius, and maybe some Yarii or something?

  • avatar
    GS650G

    I don’t think the Toyota loving left coast is going to defect from buying Prii anytime soon. They could hang kittens from clotheslines in that plant and they would still sell cars. What other cars are the faithful going to buy? They are die hard committed Toyota customers.

    Close the plant. It’s not cost effective, it’s very existence was politically motivated, the Matrix is not their biggest seller (although a decent small car) and what’s another 5000 unemployed in a state that is going under tomorrow.

  • avatar
    fincar1

    Since the state of California has nearly fatally mismanaged one of the most productive economies in the world, it seems likely to me that Toyota and GM will say goodbye to NUMMI and join the exodus of businesses from the “Golden” State.

  • avatar
    Pch101

    It seems like Toyota’s best interest would be to mothball NUMMI and kick the UAW to the curb

    If Toyota was as singularly fixated on unions as are some of you who post here, it would have never done the NUMMI deal in the first place.

    Assuming that Toyota handles this as it tends to handle everything else, their main emphasis will be on ensuring that the plant is well managed and that it continues to improve its process to ensure a low defects rate. I would expect them to delay the opening of a new plant before shutting down an old one.

  • avatar
    NickR

    If they could shift the blame to GM, then maybe it could make sense.

    If Toyota has no interest in maintaining a symbiotic relationship with GM, that should be very easy to do. Just say ‘GM abandoned NUMMI’ often enough and it will stick. For Toyota, this is a gift.

  • avatar
    Nicholas Weaver

    Just because its a high cost plant doesn’t mean its not profitable…

    Toyota made a series of mistakes recently in building new less-flexible factories. EG, their Texas Tundra plant.

    Nummi, although high labor cost, is set up already to build the bread-and-butter vehicles that makes Toyota Toyota: The Corolla and the Taco.

    I’d expect the NUMMI plant to keep operating, as long as the UAW doesn’t get too agressive.

  • avatar
    Geotpf

    I’ve got a perfect idea. Sell GM’s “half” of the plant to Penske and build Saturns there. (Rebadged Corollas? Rebadged Priuses? Something else?)

    I put “half” in quotes since approximately 85% of all product made at the plant has a Toyota badge on it, and the one GM product (the Pontiac Vibe) made there has a Toyota engine, transmission, and platform. It functions as a straight Toyota plant that makes some rebadged vehicles on the side for GM, despite the actual 50/50 ownership split.

  • avatar
    grog

    Pch101:

    +1

  • avatar
    Geotpf

    GS650G :
    June 30th, 2009 at 10:53 am

    Close the plant. It’s not cost effective, it’s very existence was politically motivated, the Matrix is not their biggest seller (although a decent small car) and what’s another 5000 unemployed in a state that is going under tomorrow.

    The Matrix is build at a Canadian plant, not NUMMI. Now, the Vibe is a rebadged Matrix, but both are also basically station wagon versions of the Corolla, which is built at NUMMI and is a big seller for Toyota.

  • avatar
    psarhjinian

    I would expect them to delay the opening of a new plant before shutting down an old one.

    The issue with NUMMI is that it doesn’t build anything that couldn’t also be built at a plant elsewhere in the NAFTA zone. As long as those plants can accomodate the demand, it still might not be worth keeping NUMMI around.

    Anyone know utilization figures for the Tijuana and Cambridge?

  • avatar
    cleek

    Penske Saturn should give Toyota a call to take the Vibe inventory/production and re-bage it. Heck, sign up for a syn-drive Saturn as well.

    If the Feds will hand Fiat $7B to import that little 500 go-kart, Penske should be able to nick a cool billion to say a few hundred UAW jobs.

  • avatar
    NickR

    Anyone know utilization figures for the Tijuana

    Given what I’ve heard about Tijuana lately, I sure as hell wouldn’t want to be building anything there.

    BTW, where’s our bankrupcy lawyer? I want to know if a state can actually declare bankrupcy. Sorry, I hate to go off subject, but the solvency of several states has come up several times in our discussions of car plants.

  • avatar
    Pch101

    I want to know if a state can actually declare bankruptcy.

    Local governments can file Chapter 9. http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter9.html States and the federal government cannot use Chapter 9.

    For a state, the equivalent of filing bankruptcy would be to default on its bonds and to stop paying its bills. That would not be a good thing.

  • avatar
    WetWilly

    After Akio-san’s inaugural speech about Toyota being a good member of the community, I’d doubt they’d either slam the doors shut quickly on NUMMI or slam GM publicly for pulling out because that’s not their style. Besides, it’s not like Corolla and Tacoma production need to be moved ASAP.

    OTOH Ford’s incessant trumpeting about how much better they’re doing than Toyota provides great cover for the “wounded” Toyota to close the plant.

  • avatar

    So Toyota is going to walk away from their only Corolla production site in the US? And make them where instead?

  • avatar
    psarhjinian

    So Toyota is going to walk away from their only Corolla production site in the US? And make them where instead?

    In Canada at the Cambridge, Ontario; the plant that also makes the Canadian-market Corolla, all Matrixes and non-hybrid Lexus RXs.

  • avatar
    TC88

    I am currently a supervisor at NUMMI… I have been there for 20 years and know the people that work there and the family members. If the plant shuts down 5000 jobs will be lost at the plant along with another 45000 jobs supporting daily operation. Some of you people that think its such a great idea to just have Toyota bail out and leave us high and dry should try and be a little more sensative. Some of the people that work at NUMMI already went through a shutdown back in 1982 and witnessed friends taking thier lives because of it… I myself would love to see Toyota keep it going and build a Hybrid to help profitability…. I pray all the time that no one in any part of our country is out of work….

  • avatar
    molly29

    TC88,
    I agree with you 100%. Why in the world would any body wish for someone to lose there job. My husband also works for Nummi 2nd shift and the moral has been terrible. How would you like to go to work each day waiting and wondering what the announcement is going to be on the future of Nummi. Not only do you have the 1 provider of the family that works there but you have both the husband and wife. And to the persons who started the rumors about toyota getting the prius shame on you. When that article came out their moral was over the top then we had to watch as it came down to an all time low. So please think about how many lives this is going to affect before you say close the doors or turn out the lights on nummi….

  • avatar
    autonewsreader

    Just picked up this story from Bloomberg:

    “Toyota Spending $500 Million on Indiana Plant Revamp”

    What I found interesting in the article is this comment from Mike Goss, a spokesman for Toyota’s North American manufacturing unit in Erlanger, Kentucky:

    “This is really our only investment this year, since Mississippi is idled,” Goss said.

    So, if this the ONLY investment Toyota is going to make in the near term, does that say anything about NUMMI’s chances for survival?

    Could the handwriting be on the wall now…

    To TC88 and molly29: With all due respect, this is an open forum for discussion and you just have to expect that comments will come from both ends of the spectrum. Our prayers to the both of you, your families, and your co-workers at NUMMI.

  • avatar
    raast

    I have a Toyota truck that was produced at the NUMMI plant, and you know what? It’s about the best made (that’s parts AND assembly folks) vehicle I’ve had yet. That should tell somebody something, unless the almighty bottom line is the sole criteria for every decision.

    As I often remind people about the last GM I (will ever) own, “if these idiots (not Oshawa assembly now, their assembly quality is just fine) would have quit the nickel and diming on the parts quality, the vehicle might have actually been durable and I would have PAID that extra $50 they ‘saved’ to get that durability.”

    Failed GM parts?
    Blockheater (how DO you do that?)
    HVAC control module
    Hub (abs) – multiple
    Multifunction switch
    Catalyst
    Rocker arm mounting bolts (ripped out of head)
    and more.


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