By on July 3, 2007

07_tacomaacab2.jpgAccording to the now-infamous Georgetown, Kentucky memo, ToMoCo’s brass are concerned that their workers’ wages are growing faster than the company's profits. To rectify this situation, Toyota’s newest plants will pay workers based on local manufacturing wages– not United Auto Workers (UAW) scale. Naturally, the UAW is using this as flamebait to organize Toyota’s stateside operations, starting with Georgetown. Toyota’s launched its next salvo in this ongoing war of wages: they’re contemplating pulling Tacoma production from NUMMI.

GM and Toyota formed NUMMI (New United Motor Manufacturing Inc.) in 1984. The Fremont, California facility was Toyota’s first foray into American manufacturing and GM’s chance to learn about Toyota’s take on lean manufacturing. The 380-acre NUMMI facility currently cranks-out approximately 250k cars (Toyota Corolla, Pontiac Vibe) and 170k trucks (Toyota Tacoma) per year.

The NUMMI plant employs around 5440 “team members.” Some 4550 of these employees also play for the UAW. This makes NUMMI the only Toyota plant using UAW labor and one of the highest-labor-cost manufacturing facilities in the entire American automotive industry.

Some NUMMI workers earn more than $32 per hour, plus benefits. Combine this compensation with the joint venture's location– a high-cost area away from Toyota’s major suppliers– and it’s no wonder the factory’s drawn negative attention from its Tokyo taskmasters. 

In a prepared statement, NUMMI officials recently declared that the plant must do more to improve its “competitiveness” and stated it would only stay in business “only if it is able to do so.” That’s management-speak for “if we can’t get labor costs under control we’re abandoning this turkey.” 

Moving Tacoma production from Freemont to a lower-cost production facility does not pose insurmountable difficulties. Toyota’s Tijuana plant already makes the beds for all Tacomas, along with small quantities of complete trucks (34K in ’06). For the money saved in labor costs, the world’s largest automobile manufacturer could expand their Mexican production facility to accommodate increased Tacoma production.

Toyota also has excess capacity at their new Tundra plant in San Antonio. As the automaker builds Tundras in both Texas and Indiana, they could shift production around to open up some spare capacity for the Tacoma, at either location. And Toyota could also modify plans for their new plant in Elvis' birthplace (Tupelo, Mississippi) to build Tacomas as well as Highlanders.

The UAW knows Toyota’s serious about walking away from NUMMI. Last week, leaders from Local 2244 and 890 told their members that they stand a good chance of losing Tacoma production and warned “we are now fighting to exist.”

There are still a couple of years before the axe falls; the current UAW contract at NUMMI expires in August 2009. In the meantime, a “no layoff” clause means Toyota can’t trim costs by jettisoning employees. So the union must devise other alternatives to entice Toyota to change their mind.

The UAW’s already started making nice with management, offering proposals for the increased use of temporary employees and other cost-cutting measures. These stopgap measures may or may not satisfy Toyota. The Wall Street Journal recently reported that high level Toyota executives are actively contemplating cutting back North American production.

According to the report, Toyota’s U.S. production capacity is growing faster than sales, and a cheap yen makes importing cars from Japan a cost-efficient proposition. Toyota’s pulling back on plans for new plants and revamping pay policies. They’re on a cost-cutting spree, and anything between the Pacific and the Atlantic is fair game. 

NUMMI's Toyota bosses will be watching the outcome of this summer’s UAW negotiations with The Big 2.8 with considerable interest. As Toyota products account for the vast majority of NUMMI production, when it comes to any decisions regarding the facility's operating costs or, indeed, its future, Toyota calls the shots.

Toyota is sure to use the upcoming negotiations as a barometer of the local UAW’s willingness to accept wage or benefits cuts and/or changes to work rules. These concessions will be the deciding factor when Toyota makes their final decision on whether or not to maintain California production.

But two years is a long time to wait if you’re trying to cut costs. And there’s just so much you can do with suppliers, utilities, work rules and other expenses. Short term, Toyota has two choices: coerce the UAW into giving back some of what they gained in the last contract or move production elsewhere. Look for the Japanese automaker to take the path of least resistance.

The uncertainty surrounding NUMMI reflects the fact that the union’s future isn’t looking too rosy right now. Delphi’s UAW workers just took a massive cut in potential earnings and other benefits. The upcoming negotiations with The Big 2.8 seem to have the deck stacked in Detroit’s favor. And in spite of the UAW’s attempts to gain ground in Toyota’s plants, Toyota still holds the trump card. 

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40 Comments on “NUMMI RIP? Toyota Considers Dumping UAW Plant...”


  • avatar
    GS650G

    I think Toyota will move production sooner rather than later. 2 years from now the union will be far away from another round of negotiations with the 2.8 resulting in more arrogance. Better to pile on now and get out.

  • avatar
    NickR

    It will be interesting to see what happens with Toyota in Canada. The Canadian dollar has appreciated very rapidly, practically devouring the ‘free’ profit found in favourable exchange rates. I assume they will want to try and make that up somehow.

  • avatar
    willbodine

    NUMMI is one of the most fascinating “back stories” to the whole GM death watch phenomenon. The former GM Fremont plant was closed in 1978, high costs and low quality being the given reasons (Fremont’s A and G body cars had the lowest internal GM quality ratings at the time.)
    In comes Toyota, “installs” the Toyota Production System (just-in-time parts production and continuous-improvement), rehires the old GM workers and voila, the Corollas, Novas and pick-ups being produced soon had the HIGHEST internal GM quality audits. In the same period, anyone care to guess how many millions GM paid to outside consultants to address their continuously declining market share?? And yet the answer was right there in the South Bay. All they had to do was change the way they did business. A priceless “free” gift from Japan, and they ignored it. They don’t deserve to survive.

  • avatar
    Glenn 126

    NickR, I think Canadian exports of Toyota cars to the United States may drop slightly due to just your reasoning, and imports from Japan will increase. On the other side of the coin, the US plants could export “some” cars to Europe, as Honda have done in the past for example. This would add profit due to the opposite effect which is hurting Audi, BMW, etc. – the disparity of the Euro and the Dollar (i.e. our US dollar is plumeting in true value vs. other currencies – long story – too much to get into here).

    Obviously, Toyota has characteristically been VERY conservative with it’s Mexican operations (unlike the big 3 who’ve dived into the deep end, and sent tons of jobs south – literally). But I suspect the NUMMI plant is doomed. Toyota will simply close it in 2009 and GM won’t care since by ’09 it’ll probably be importing all vehicles from China, South Korea and Mexico anyway.

  • avatar
    AGR

    Toyota is building a new plant in Woodstock, Ontario in addition to the one in Cambridge which assembles Toyota and Lexus RX’s.

    Toyota is realising and understanding that they need a “trained workforce” to assemble a quality product. There is a difference between assembling a quality product, and “slammin’ metal together” which is a risk every manufacrurer runs.

  • avatar
    mikey

    Oh the NUMMI plant! Yes sir back in the eighties we were all told ,how friggen wonderfull the NUMMI plant was.
    Management went all out to deliver the messageNUMMI was the way of the future.
    We saw movies of happy contented assembly workers buiding the cars of the future.I think it was a warmed over Toyota with a Chevy Nova emblem.Management brought a couple of them up to the plant,the Toyota/Chevrolet.Some wit re named it the Toylet.
    They even went as far as sending handpicked groups of workers down[my invite musta got lost]These folks came back with glowing reports on how great and wonderfull this new way of building cars was.
    Note : Send a Canadian on an all expense paid trip to California in February they wiil write you a glowing report on an earthquake.
    Of course the brand new union [CAW formally the UAW]
    didn’t agree.I’m sure a few of them went on a company paid trip just to see how bad it was.
    For about 4 or 5 yrs. it was NUMMI this and NUMMI that
    and we are going that way, so you might as well accept it.
    Once Toyota got rid af all the old GM management they ran it thier way.
    Management has to be a part of the “Toyota way”not just the assembly workers.GM management wanted no part of that shit.
    Now we find ourselves 20+yrs down the road, and low and behold,doesn’t NUMMI have issues?
    High labor, cost health care problems and the UAW knocking on,the now number one Toyotas door.
    I’ll becha Toyota wants to unload it
    So much for the NUMMI way

  • avatar
    BigRon

    As far as Canada is concerned, dollar for dollar, ANY Auto manufacturer makes more off each car they sell in Canada compared to the U.S.

    Hey Mikey, aren’t the NUMMI Plant workers already UAW? Wasn’t it Toyota that removed UAW workers from the unemployment lines that the infallible GM sent them to? Unfortunately, the UAW was a pleasant little bonus that accompanied the NUMMI Plant, and when you can’t cure the cancer….

  • avatar
    Dynamic88

    “In comes Toyota, “installs” the Toyota Production System (just-in-time parts production and continuous-improvement), rehires the old GM workers and voila, the Corollas, Novas and HiLuxes being produced soon had the HIGHEST internal GM quality audits. In the same period, anyone care to guess how many millions GM paid to outside consultants to address their continuously declining market share?? And yet the answer was right there in the South Bay. All they had to do was change the way they did business. A priceless “free” gift from Japan, and they ignored it. They don’t deserve to survive.”

    This is as good a thread as any to ask this question – Why have Big 3 execs been so stupid over so many decades?

    Low IQ probably isn’t the culprit. The Big 3 can hire from top business schools – Harvard, Wharton, etc. There are no HS dropouts in the boardroom.

    My own take is that ToyHon have a philosophy to follow – one that looks beyond quarterly statements. The bright people in the Big 3 flounder, w/o sense of direction or purpose.

    Anyway, it’s been a half century (well, just a bit longer) since the bug gave us the first warning sign about foreign competition. It’s been what – roughly 40 years since the first Corolla? A quarter century of loosing share to Camcorders. And still, they don’t learn.

  • avatar
    BigRon

    NO WAIT! I’ve got it!

    UAW: Hey Toyotie, we’ve gone an’ sucked all da Munny outta dem folks in Deeetroit an’ dat dere udder place DELPHIE, so now, WE’RE CUMMIN’ FER YA! ( Followed by guns firing and a whole bunch of Yeeehawing. )

    TOYOTA: LET’S GIT, I MEAN GET THE HELL OUT OF HERE!!!!!!!

  • avatar
    mikey

    Right you are bigron the NUMMI plant has allways been UAW at 31$ an hour.The rest of Toyota is not, at 18$ to 24$
    an hour the UAW makes a good case to go with the UAW.
    Toyota would love the pesky UAW to go away and dumping NUMMI only makes sense

  • avatar
    BigRon

    18 to 24$? Looks pretty good if you’re a DELPHI employee topped out at 18.50$/hour.

    Anyhow, got to go, my union says I can’t be in the building after 3:30p.m.

  • avatar

    Actually, at their newest plants, workers start out around $14-15/hour. That’s one reason Toyota locates in lower-cost-of-living areas. They can pay lower wages and get away with it.

  • avatar
    mikey

    Right again BigRon Toyota is finding out that being the big kid on the block has its pitfalls.
    Lets see you got recalls, quality issues,hidden waranty costs.Now you have insiders with confidential memos leeking to the press.Maybe 20-20 will do a piece on Tundras gas tank blowing.They probably got the same stuff they used to rig up the Chevys.
    And then you got the nasty UAW having you in thier
    crosshairs.
    So Toyota closes the joint GM/UAW/Toyota plant.Ok then they beat the UAW back from the plant gates.
    So somewhere in 2008-2009 Ford folds followed by GM
    Watch the media turn on them Can anybody say consumer backlash.
    Remember when your” king of the hill “theres allways somebody that wants to knock you off

  • avatar

    Toyota here in Ontario, Canada has the advantage of Government Run Heath Care and also newer factories!The Vehicles made in Cambridge, Ontario are far better than similar ones made in other older factories, in fact in the Lemon Aid books, the author says the same thing ie a Corolla made in Canada is a better product over all.,and of course there is no Union here either, even though the CAW would give there eye teeth for that to change.

  • avatar
    Kevin

    As for the UAW penetrating those non-union factories in Toad Suck, Arkansas (wherever) — I think the union would have a pretty easy sale.

    The UAW only needs to remind the non-unionists:
    “If it wasn’t for us, YOUR job wouldn’t exist.”

  • avatar
    carlisimo

    Damn. I live in Fremont and see NUMMI every day (and occasionaly get stuck at the train tracks for 15 minutes as it slowly rolls through the middle of town). It’d be a pity to see it go, but if the wages dropped enough all the workers would have to leave anyway. Even $500,000 doesn’t get you much house here.

  • avatar
    50merc

    When GM built an assembly plant in Oklahoma City, there was terrific demand for the new jobs: they paid roughly twice the area’s typical wage/benefit rate. GM didn’t pay that much out of the goodness of its heart; headquarters’ contract with the UAW dictated it. For 25 years the workers lived far better than their cohorts at other factories.

    Now the plant, like so many other GM facilities, is closed. The high-cost producer cannot survive when it loses the ability to pass on higher costs.

  • avatar
    mike frederick

    Damn. I live in Fremont and see NUMMI every day (and occasionaly get stuck at the train tracks for 15 minutes as it slowly rolls through the middle of town). It’d be a pity to see it go, but if the wages dropped enough all the workers would have to leave anyway. Even $500,000 doesn’t get you much house here.

    Kind of hard to make those mortgage payments on 32 bucks an hour.

    NUMMI is not going anywhere until 2013.

  • avatar
    Geotpf

    NUMMI is not going anywhere, period. Toyota will never close any American plants-the potential PR hit would be huge, and they know it. I can see GM pulling out of the venture at some point, however-85% of the product produced there has a Toyota badge on it already.

    Now, this doesn’t mean they won’t play the union-management dance come contract time, or that they will expand the plant any. But it’s not closing or shrinking.

  • avatar

    Geotpf: Toyota will never close any American plants-the potential PR hit would be huge, and they know it. I'm not so sure about that. Toyota is losing several hundred million a year on this turkey, despite running it at nearasdammit full capacity. A minor political hiccup (at worst) vs. a big old dent in ToMoCo's balance sheet. Do the math. End of days bro', end of days.

  • avatar
    calacak

    Personally, I find it unrealistic to think that the NUMMI plant is losing money, considering the number of cars and trucks the plant produces. They have already produced around $4 billion in sales with the product they create — and that is just the first six months of 2007. Being in Cali, I wouldn’t doubt they are using Hollywood’s creative accounting practices to make it seem worse than it is.

    What is more likely true is that NUMMI is not as profitable as other Toyota plants and Toyota fears that NUMMI will be used as a weapon by the UAW when trying to convert other plants. When you are looking to make a company more profitable, you look at the worse of the crop, even if it’s still productive.

    This and other reasons show why Toyota is killing the big 3. Toyota is thinking a few steps ahead and looking at what needs to happen much farther down the road, unlike most American companies that only think of short term gain.

  • avatar
    Luther

    “Even $500,000 doesn’t get you much house here.”

    Which is the main reason why NUMMI does not make sense…Not to mention the parasites in Sacramento. California is a high value-add State with it’s cost of living (ie, High Tech, Divorce Lawyers, Medicare Troughers…er..AMA Stooges..er..Doctors)

    I cant believe Toyota makes a profit on Corolla, Matrix, Tacoma out of NUMMI. Small vehicle production makes sense in Mexico…Or Toadlick.

  • avatar
    jthorner

    I’ve read several books on the history of Toyota and GM and as best as I can see it the reason Toyota went into the Nummi deal was to learn how to do business as a manufacturer in the US. In 1984 Toyota hadn’t built any US or Canadian factories yet and they looked at the Nummi deal as a way to get in cheap (GM provided the physical plant) and to get tied into the logistics of doing business in the US. GM saw the deal as a part of it’s two prong strategy for learning to do things the Japanese way. Rotate managers through Nummi to learn the secrets and also rotate people through the green field Saturn factory where all the latest and greatest ideas would be put to the test.

    Well, GM certainly learned some of the Toyota lean production lessons and Toyota certainly learned how to run US factories. Both companies have long since gotten what they wanted out of Nummi. GM, Ford and Chrysler all long ago abandoned their once strong California factory base. The huge Ford Milpitas factory just down the road from Nummi is now a struggling shopping mall. High costs of doing business here in Northern California drove the US based companies away almost 30 years ago. Now that Toyota has no real need for Nummi, why should they keep subsidizing it?

    I don’t see a PR disaster for Toyota if they announce that they are phasing out of Nummi. Heck, they can probably figure out a way to pin the tail on the donkey, er GM! Just announce that they are happy to have taught GM how to build cars and that they will now hand back the keys to the factory gates.

    GM has never figured out how to sell their portion of the output from Nummi. It was supposed to be a 50/50 share, but GM has rarely been able to sell it’s part. The Chevy Nova was a slightly worse trim version of the Toyota Corolla. The Pontiac Vibe is a less desirable version of the Toyota Matrix platform. Nova and Vibe have hardly been best sellers.

    Toyota is smart to start by shifting the Tacoma elsewhere. Tacoma doesn’t share anything with the Corollas and Vibes also built at Nummi. The sight of all those truck beds arriving on Toyota tractor trailers from Mexico on a regular basis is actually funny. Why not build the whole truck in one place? I would be thrilled to have that much less traffic on Interstate 5.

  • avatar

    If Toyota was considering closing the Fremont NUMMI plant, the local UAW could eliminate that possibility by making concessions to make their wages in line with other Toyota US plants. You can’t close your only union plant in the US. That would be an NLRB violation.

    Also the anti UAW opinions which are fine for this forum if they were expressed by management in a work environment can be used against them with the NLRB. Like it or not people have a legal right to form a union and once they have one, a company must bargain in good faith. If the local made concessions in line with other US plants then the plant could not be closed.

  • avatar

    Sherman Lin: You can’t close your only union plant in the US. That would be an NLRB violation.

    They didn’t say they were closing it. They’re considering moving Tacoma production (40% of total production) from there. That still leaves Corolla and Vibe at NUMMI.

    However, the UAW contract is with NUMMI, not Toyota. If Toyota decided they wanted to produce Toyota vehicles in their own factories instead of having NUMMI do it, I’m not sure the NLRB could do a thing about it.

    When NUMMI was formed, it was a 50/50 joint venture by Toyota and GM (and as far as I know, it’s still incorporated that way). I don’t know what would happen or what the legal ramifications would be if Toyota tried to back out, but with the right amount of cash I’m sure GM would let them off the hook. Then it would become just another GM plant slated for closure.

  • avatar
    KatiePuckrik

    I’m not too aware of the NUMMI plant so if anyone can give me any insights into it, I’d appreciate it, but dumping the NUMMI plants would be a necessity for Toyota.

    Since the NUMMI plant contains UAW workers and the UAW workers are now gunning for Toyota’s home (Toyota, Honda and Nissan appear to be the Axis of Evil for the UAW! Don’t worry, the UAW will liberate them soon! :O)) so Toyota need to come down hard on any affiliation with the UAW. It is absolutely imperative that Toyota retain an iron grip over their sites and don’t lose control like the big 2.8 did and practically have to beg the UAW for co-operation!

    Now I know in previous postings I’ve been quite pro-UAW. But my reasoning has been that the big 2.8 has done nothing to rectify their situation so why should the UAW do anything? But in this case, Toyota IS doing something. They’ve maintained their profitability by not employing the UAW and why should Toyota employ the UAW if they’re working fine without them? I mean, if Toyota’s staff don’t want to unionise, who can force them?

    But to maintain balance, the UAW DO need to be around. Without them, Toyota could start taking advanatage of their workers and we’d regress about 40 years! The presence of the UAW ensures that Toyota pay fair wages and benefits to their workers.

    There! I managed to stay impartial! And I didn’t flame the big 2.8 too much, as well! :O)

  • avatar
    Sid Vicious

    How is it against the law to close a plant as long as you are not contractually prevented from doing it? It “might” warrant an investigation, but I don’t believe it’s illegal. At what does bargaining in “good faith” mean. Near as I can tell it means don’t tell any lies.

    To Mo Co doesn’t intend to lie. They are going to tell Gettlefinger that if labor costs don’t come down they’ll move production out. Hardly a lie. So the union goes on strike at this one plant. BFD. Guaranteed by that time Toyo is all set to produce Tacomas in Mexico. And then what? Some one in Ohio has to wait a little while for the temp workers at NUMMI to make their Vibe?

    Big difference here. A UAW strike against NUMMI does not shutdown Toyota USA. A strike against a single GM plant (1998 I believe) can shut down all GMNA. Detroit negotiated themselves into a very deep hole with the UAW thugs. Toyota is way way too smart for that.

    As far as the NLRB goes. Anyone paying attention will know that the UAW is impotent in Washington (reference recent energy legislation.) The NLRB won’t lift a finger or bat an eye. Senators from Texas, Kentucky, Indiana, West Virginia, and Mississippi will make sure of that.

  • avatar
    Luther

    “why should Toyota employ the UAW if they’re working fine without them?”

    Maybe it is because Toyota does not employ the UAW that they are working fine.

    2.801 cannot attract the best Executives because no top Executive wants to work with a union work force that constantly override the Exec’s decisions. I think this is a major reason why huge “retension” bonuses are given out that makes it appear like the 2.801 Execs are overpaid…They are overpaid. Mulally must be kicking himself for leaving Boeing.

  • avatar
    ihatetrees

    Luther:
    2.801 cannot attract the best Executives because no top Executive wants to work with a union work force that constantly override the Exec’s decisions. I think this is a major reason why huge “retension” bonuses are given out that makes it appear like the 2.801 Execs are overpaid

    At Delphi, mid level management bonuses were an issue. It was reported as ‘insensitive’, given the concessions that management wanted from the UAW. However, these managers were NOT over-paid (a fact based on numbers leaving for non bankruptcy greener pastures).

    For such management, there’s no job’s bank or buyout (even severence would have had to go thru the bankruptcy court). Smart one’s who wanted a career asked themselves, “Why am I staying in this company.”

    I often wondered how many fine people on the outside say, “Why would I even want to work for this company?”

  • avatar
    Johnson

    Frank Williams: According to the report, Toyota’s U.S. production capacity is growing faster than sales

    Not true. Toyota’s sales have been growing at a faster rate than US production capacity, which is exactly why Toyota has gone on a new plant spree in North America. In terms of total US sales for Toyota, the percentage of North American produced models has dropped in recent years. This is because Toyota has had to run their Japanese plants on overtime just to meet demand here in North America for Toyota products.

    Toyota has publicly stated it is committed to maintaining North American production, which is why they are building several new plants.

    As for Canada, the reason Toyota is building a new plant in Ontario is because there is a large number of trained workers.

    As for NUMMI, I highly doubt Toyota would completely abandon it, but moving Tacoma production is certainly a possibility. On the other hand, due to increased demand for the Tacoma, they might keep production at NUMMI if they don’t find enough capacity elsewhere.

  • avatar

    Johnson: Not true [that Toyota's production capacity is growing faster than sales]. Toyota’s sales have been growing at a faster rate than US production capacity, which is exactly why Toyota has gone on a new plant spree in North America. In terms of total US sales for Toyota, the percentage of North American produced models has dropped in recent years. This is because Toyota has had to run their Japanese plants on overtime just to meet demand here in North America for Toyota products. Well, I'm just going on what was in the Wall Street Journal as reported by Automotive News: Top executives at Toyota Motor Corp. are concerned the automaker has built too many factories in the United States and are urging it to hit the brakes on new plant building, The Wall Street Journal reported today on its Web site. Former Toyota Chairman Hiroshi Okuda, the architect of Toyota's aggressive expansion outside Japan, and Shoichiro Toyoda, a senior member of Toyota's founding family, have expressed concerns that U.S. sales may not keep pace with the company's capacity increases,the Journal said. Both men sit on the automaker's board. A weak yen, meanwhile, is making it advantageous for Toyota to expand manufacturing capacity and export cars from Japan. The strategic shift means new U.S. factories are unlikely anytime soon, according to the report. Tomomi Imai, a Toyota spokesman in Tokyo, declined comment on the report, saying only that the automaker had made no decisions on new U.S. plants as it had announced a new factory in Mississippi earlier this year. The Journal said as a result of its strategy shift, Toyota scaled back plans for the $1.3 billion Mississippi assembly plant.

  • avatar
    craiggbear

    A Modern Parable

    A Japanese company ( Toyota ) and an American company (General Motors) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race.

    On the big day, the Japanese won by a mile.

    The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing.

    Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing.
    Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team’s management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager. They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the ‘Rowing Team Quality First Program,’ with meetings, dinners and free pens for the rower. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses.

    The next year the Japanese won by two miles.

    Humiliated, the American management laid off the rower for poor on the job performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year’s racing team was out-sourced to India .

    Sadly, The End.

    Sad, but oh so true! Here’s something else to think about: Ford has spent the last thirty years moving all its factories out of the US, claiming they can’t make money paying American wages. Toyota has spent the last thirty years building more than a dozen plants inside the US. The last quarter’s results: Toyota makes 4 billion in profits while Ford racked up 9 billion in losses. Ford folks are still scratching their heads.

    IF THIS WASN’T SO SAD IT MIGHT BE FUNNY !

  • avatar

    Sid Vicious
    If you have 10 plants and close one of them because it has the highest labor cost that is ok but if you have 10 plants and simply close one simply because that has a union that is union busting, Thats why I prefaced my comment that the local by accepting cuts to be in line with other Toyota plants could protect themselves.

    By law if people choose to have a union then you have to deal with that. “Bargaining in good faith means meeting with the other side, exchanging bargaining proposals and making a sincere attempt to reach an agreement. This does not mean that you must agree with the other side’s proposals to avoid an unfair-labour-practice complaint. However, you must not engage in a deliberate strategy to avoid reaching an agreement, as such a strategy will be deemed bargaining in bad faith.”

    Bargaining in good faith means you are legitimately bargaining for something such a wage of 12 dollars an hour. If the union says ok but then you say no I have to have 11 dollars for the sole purpose of not agreeing to a contract then that is not bargaining in good faith.

  • avatar
    Tundraman

    First off I'd stress too all is never say never."BigRon" here better wake up to reality. I don't think arougance and ignourance are going to tell the truth in such matters. #1 fact is that the American way of bussiness is repulsive at best. The CEO's have been the murderers of the Big 3. The facts are as such (you are more than welcome too reseach this yourselves before you post something stupid in response). The US CEO are greedy self serving slobs! Enron is the American bussiness man today! They pay immediate pay plans to themselves reguardless of the objectives and quality issues being met! How many times have you heard that wall street exec's got there commissions reguardless of year end results because of the deals they set before they were hired on? Did you know it was stated that GM could have payed off the retirement benefits it promissed it's retirees but because of unscrupulous/rediculous agreements they had crazy payouts due to exec's first so a layoff and plant closings became there only option. I would remind all that GM and Ford had nothing to loose had they maintained there commitment to a quality product and truly stood behind it! I am a former Chrysler and Ford tech myself. Chrysler I can honestly say tried with really a budget that has been hard since even being saved with Iaccoa and a federal bailout. But Ford has no excuse! The arougance I saw myself made me sick…they would scoff and laugh when I would say things at classes like. "I feel Ford had better get on the ball"one trainer (an engineer would ride my ass all week because he was insulted that I dare to even talk like that. Strange how things worked out ehhh? That was in 1991 the revamping of the mustang was being discussed after all the hype about the Viper from Chrysler.Ford had already been embarrassed that the lesser Chrysler people had come up with a binary comunication networking on the New Yorker (this made it possible for the computer between the ABS controller and the powertrain control module to work together making downshifting and stopping quickly as well as cruise and other funtions to work and react to eachother.) I can tell you this was an eyeopener for Ford it broke down (The inside word at the time was "castlewall killer") The CEO demanded that all cut the crap and start working together or else heads would roll had they gotten another slap like that. If your in the automotive industry you understand fully what that meant shortly after …… Chrysler would have the Jump along with GM on the C.A.F.E and CARB demands the latter result OBD II self diagnostics that was demande as part of the Feds demanded emmissions next generation. # 2 Toyota will close the plant! They will move the production whereever they need. Why and how you ask? Because there is no loyaty to those workers from fellow Americans (nasty thing too say you say?) Wowa right there!! 32 an hour isn't enough plus bennys! Figure it out idiot your polititions voted for NAFTA where were you? The 103rd congress brought this in like a train wreck and where were you? Well if you think Clinton was a great president suck on this because thats where it all started! 1993's NAFTA welcome too world competion!! I myself looked at all the trucks out there, had intentions to buy a Ford or GMC the result….looking at all the trucks features reliability safety equipment towing capacity structural design Toyota Tundra was the final buy. Engine designed by Americans built in Kentucy, body built it Texas!! Ford on the other hand is built in Canada parts imported from Mexico and recalls/tsb's customer complaints, etc I didn't choose too deal with. Sorry but before you respond look into the facts it's really sad what we are looseing in this country we are doing it to ourselves!! Like Wal-Mart is not your freind!! You are the catalyist that sends money right to China as they load are country with there "junk" products while our country men loose there jobs!! Who makes a large number of American flags you saw on this fourth of july. Fact: CHINA!!!

  • avatar
    jthorner

    NUMMI is it’s own company which is in turn owned by two other companies. NUMMI makes cars under contract to Toyota and GM. I highly doubt that Toyota will have any NLRB problems if it scales back or even stops buying vehicles from NUMMI. NUMMI is a corporation with only one factory and two customers and it is completely dependent on those two customers for engineering and sales.

    The NLRB issue is almost certainly a red herring in this situation. Worst case scenario is as I posted above, Toyota simply hands the keys to the front gate back to GM where they came from in the first place.

    The idea that Toyota owes the workers at that plant anything when the only reason it re-opened in 1984 AFTER GM closed it is that Toyota made a big bet on the place. Investing in a factory is not a life-long commitment to forever invest in that factory no matter what the situation is in the future.

    When is the UAW going to get ahead of the game and become an outsourcing provider? Why don’t they use their huge investment fund money to buy one or more of the automotive factories on the chopping block and then become a supplier to the branded car companies? In electronics outsourced manufacturing is done routinely, why not for automobiles and trucks?

    The UAW claims that they are the key element of the automotive manufacturing game, so why don’t they put their money where their mouths are? The most recent report puts the UAW’s assets at over $1.2billion! Look up the 2006 FORM LM-2 for the UAW National at: http://www.dol.gov/esa

    So come on folks, show us how a factory should be run.

  • avatar
    hack6500

    Specifically focusing on GM, greed on BOTH sides is what has killed its American manufacturing operations.

    Greed on the Corporate side is often overlooked in comparison to that of the UAW. This corporate greed is very obvious to an American supplier for GM and is directly responsible for the steady decline of American supplier competition as a whole over the last two decades.

    Additionally, this supplier decline has a direct effect on auxiliary manufacturing industries, who now also have fewer choices, thereby stifling an entire nations manufacturing operations.

    BOTH sides are responsible for the catastrophic collapse of the entire American Automotive Manufacturing Industry, and each demonstrate a long term policy of being short-sighted and thereby greedy.

    The fact that a foreign interest wants to manufacture their product in our country is amazing, and something its citizen workers need to embrace, foster, and reward.

    Toyota has its reasons for partnering with the UAW at NUMI, and i strongly believe this to be a great moment in history, its the UAW as ‘OLD STEEL GREED’ vs. ‘The Toyota Way’

    I feel the UAW needs to react in a responsible “MOVING FORWARD” style of thought, allowing itself and its work force to remain in business. to do anything less places the UAW and its entire American manufacturing operations at risk. (period)

    The book mentioned above was ‘required reading’ for all GM suppliers.

  • avatar
    BigRon

    Mikey,
    How can Bloomberg report Honda and Toyota paying out 47$ per U.S. ass. plant employee bennies included.

    http://www.bloomberg.com/apps/news?pid=20601103&sid=auOI75eOYdYI&refer=news

  • avatar
    OctaVentiConPanna

    At NUMMI, only workers in the “skilled trades” make $32/hr. They’re the ones who are the electricians, welders, etc. They’re more commonly known as “maintenance”. The majority of the workers who actually do the build on the production floor make $28/hr. at the top pay scale. They are increasing their use of temps who make $19/hr with 6 month contracts. The average wages have actually dropped due to their use of temps.

    To say that the entire plant will shut down is pure speculation. Workers are already training for the next generation 2009 Corollas and Vibes. The quality coming out of NUMMI is also better than some of their plants in Japan. There are no plans to shut down passenger car production. Unfortunately, the story about truck production coming to an end may very well be true.

  • avatar
    jruhi4

    I think that much of the key to NUMMI’s survival is whether or not Pontiac gets to create a 2nd-generation Pontiac Vibe off of the upcoming 2nd-generation Toyota Matrix which should debut in the late 2007/early 2008 time frame. If GM and Toyota share this model once again, it improves the odds for NUMMI’s survival. If, on the other hand, GM/Pontiac pass on a 2nd-generation Vibe, then I’d say NUMMI is seriously endangered.

  • avatar
    hotrod

    The problem is not the $32 per hour it is the fact that there is 5 people doing 1 persons job and that is what the UAW has done for all the of the big 3. It is hard for me to understand why the big 3 employees can’t see that and that this problem is costing thousands their jobs.

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