By on July 23, 2009

Bloomberg is quoting “two people familiar with the plan” (now it’s three) that Toyota’s pulling the plug on their joint venture with Old GM. “The company will negotiate the timing of the closing with Motors Liquidation Co., an entity responsible for the disposal of the assets GM shed in bankruptcy, said the people yesterday. They declined to be identified because the information wasn’t public.” But but but . . . it IS public. You know; now. Anyway, three days ago, ToMoCo was angling for government “assistance” and union “flexibility,” telling the world that it hadn’t made a decision on whether or not to terminate the project once and for all. Toyota’s North American chief executive  Yoshimi Inaba said the decision “depended on possible aid from California lawmakers, labor contracts for the factory’s union workers that expire in August and NUMMI’s financial viability.” As Toyota is not known for, uh, lying, I reckon the jury is still out.

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32 Comments on “Bloomberg: Toyota to Close California NUMMI Plant in July...”


  • avatar
    Quentin

    The thing I don’t get is where will Toyota source Tacomas? Does the Baja Mexico plant have enough capacity to support the US w/ Tacos? Also, w/ the Corolla, do they really have enough capacity at TMMC?

  • avatar
    kaleun

    They always can increase production at the non-UAW plants. There the people actually work and appreciate any work they get.

  • avatar
    th009

    Quentin: Does the Baja Mexico plant have enough capacity to support the US w/ Tacos? Also, w/ the Corolla, do they really have enough capacity at TMMC?

    With Toyota’s sales down close to 40%, I think just about every plant has spare capacity right now …

  • avatar
    Quentin

    th009 – last year NUMMI and TMMC were running full bore w/ the Corolla (insane sales prior to the crash). I would guess that 50% was at TMMC and 50% was at NUMMI. If sales are down 40%, there is still 10% that has to come from somewhere. I suppose they could get Japan supplied vehicles. As far as the Tacoma, I really have no clue how much volume each plant has/had. I’m not certain that there are any plants that make the Tacoma other than Baja or NUMMI worldwide. The Hilux is reasonably different from what I recall. The fallout will certainly be something to watch.

  • avatar
    lw

    California is a horrible place to run a business right now… The state government has fallen apart and the cost of living is so high that even UAW wages would be hard to live off of.

    Try making a mortgage payment for a craptastic $500K home on only $80K a year.

    Cali’s loss is another state’s gain.

  • avatar
    Omoikane

    Corolla- no issue. TMMC’s running at about 80% capacity. Many other plants around the world making Corollas, all running well below capacity. Matrix could be moved to TMMC Woodstock currently running one shift only- if needed.

    Tacoma- a little more difficult. Sales numbers currently about 90-100k/year. TMMBC has capacity for 50k Tacomas and about 180k beds. 130k beds are shipped to NUMMI for assembly. TMMBC could increase production to 60k by running 9 hours shifts and every other Saturday for a while.
    They could move the line from NUMMI and get up to 180k in 6-8 months.

  • avatar
    Gardiner Westbound

    Omoikane +1

    Hard to imagine Toyota shedding many tears at the opportunity to close the redundant NUMMI plant and blame it on the usual suspects; the UAW, GM, California state government.

    They’re not going to throw the line away. It will go somewhere. The new, CAW-free Woodstock plant is working at 50-percent capacity – 75,000 RAV4s instead of 150,000.

  • avatar
    gmemployee

    Negotiate??? I’m trying to not fall out of the chair laughing. Negotiation assumes both sides have something to discuss. The simple fact is Tomoco is sitting at the table staring at no one. Its over done end of story. You can’t make this up!

    I wish all the employees at Nummi well but its done.

  • avatar
    Jeff Puthuff

    California is a horrible place to run a business right now… The state government has fallen apart and the cost of living is so high that even UAW wages would be hard to live off of.

    Huh? State govt. is operating business as usual, but hasn’t “fallen apart” and cost of living is high in the major metros but UAW wages would provide a comfortable, if modest, living. Come and visit some time from Tulsa and I’ll show you.

  • avatar
    romanjetfighter

    Cost of living is super high. The state college’s tuition went from 1k a year to 4k per year in 9 years.

    Also, 1 bedroom condos are 130-150k in the ghetto of OC.

  • avatar
    vww12

    Energy costs are among the highest of the nation in CA, and about to get higher b/c of the renewables requirements.

    Taxes are among the highest in the nation in CA.

    Buh bye, Cali. Go East, young man.

  • avatar
    jthorner

    There is a huge pickup truck plant in San Antonio which doesn’t have much to do. I doubt it would be too hard to covert some of its capacity to the Tacoma. Unless, of course, Toyota gives up on the $2 B San Antonio investment all together.

    The crazy thing is, Californians buy lots and lots of Toyotas. It is probably Toyota’s biggest North American market.

  • avatar
    gmemployee

    Its going to be interesting to see how TM Pr’s this thing. However I’m sure in the end we’ll get all the blame. As usual.(insert heavy sarcasm) Heaven forbid TM transfer its canada matrix production there to keep it open.

  • avatar
    GS650G

    NUMMI was a political creation and served a limited purpose for 25+ years. Now it’s time to move on.

    Another blow to CA. That plant will have trees growing in the parking lot, no one is going to do anything with it. The main problem is where it is located.

    The living costs are high, the state government imposes rules and taxes that are among the highest. And the UAW would insist on controlling the workforce or else violent protests would occur.

    Toyota is smart. They can rapidly change their lines to produce any vehicle they choose. And they don’t have to contend with Unions that tell them who can make what and where.

    Maybe Ford would be interested in the plant, but they already have production south of the border and obviously do not need the capacity.

    Perhaps China could step in. The PLA could duke it out with the UAW, that would be something to write home about.

  • avatar
    Geo. Levecque

    The Matrix at present here in Canada is made in Cambridge,Ontario along with the Corolla! In the same plant they also make the Lexus RX350, the only plant outside of Japan that makes a Lexus model.

    In Woodstock Ontario they currently produce the RAV4 only on one shift with Overtime now asked for!
    I would think one of these plants could fill the Gap for the line of Trucks that Toyota makes now in California.
    The Vibe was a combination of Toyota and Pontiac that General Motors sold as a joint venture, it won’t be missed by a lot of us, some I expect like it, such is life eh?

  • avatar
    Omoikane

    Geo,
    all the Tacoma beds are made in Baja, Mexico.
    The most logical outcome would be to expand Baja and have all the Tacomas made there.

    For Corolla’s, the most logical outcome would be to move Matrix to Woodstock, have that plant run 2 shifts as intended and pump up Corolla production in Cambridge. They could take their time with this one, as there’s plenty of extra capacity worldwide.

  • avatar
    Omoikane

    I forgot to mention,
    if i’d be Toyoda-san,
    I wouldn’t do anything for the Ontario plants,
    before having the idiot premier of Ontario
    drop the idea of giving even more taxpayers’ money to GM in form of the stupid 10k incentive to buy an electric car.

  • avatar
    lw

    “Huh? State govt. is operating business as usual, but hasn’t “fallen apart” and cost of living is high in the major metros but UAW wages would provide a comfortable, if modest, living. Come and visit some time from Tulsa and I’ll show you.”

    1325 sq feet in Fremont… $489K

    http://www.realtor.com/realestateandhomes-detail/4439-Gina-Street_Fremont_CA_94538_1111213321

    30 Year fixed with $92,000 down ($92K would BUY this home outright in Tulsa) and you can have the joy of a $2070 payment + insurance + taxes for the next 30 YEARS!

  • avatar
    Da Coyote

    California? IAW?

    Was there any doubt that Toyota would leave the people’s republic?

  • avatar
    menno

    I’m going to WAG (wild @ss guess) that Toyota will move Tacoma production to Texas, AND Baja, with a twist – diesel engines only, from the Baja plant once it’s expanded for more production. I believe a nice 4 cylinder Toyota turbo-diesel from the Hilux trucks would fit just nicely…

    Yes, I do believe Toyota will sell diesel pickups, because a few months ago or so, the company executives mentioned that hybrids were not a brilliant answer for pickup truck needs, but that diesels were a better choice.

  • avatar
    Geo. Levecque

    Diesels will never sell in North America, they are still dirty as compared to Hybrids, so even though most people on this list seem to like Diesels it’s not going to happen imho!

  • avatar
    menno

    George, tell that to the Volkswagen, BMW and Mercedes buyers. They can’t be “too” dirty; they have to pass the most stringient emissions tests in the world, and these new diesels are 50 state compliant.

    Honda are also apparently going to bring in some diesel AUTOMOBILES and SUVs since it is their opinion that from Civic size, down – hybrid works best, from Accord size up, diesel is the answer (for alternative fuel high efficiency, that is).

    Toyota parse the dividing line (with their much better hybrid system) at pickup trucks. Diesels for pickups, hybrids otherwise.

  • avatar
    altoids

    depended on possible aid from California lawmakers, labor contracts for the factory’s union workers that expire in August and NUMMI’s financial viability

    Translation: Make it worth our while to stay, or we’re gone.

    There’s never been a better time to close NUMMI – no one will blame Toyota, with an insolvent California government, GM in bankruptcy, and a worldwide recession. Toyota has always been hypersensitive about American jobs. Like GS650G said, NUMMI was a political creation, which has long since outlived it’s usefulness to Toyota. Now is the opportune time to close it.

    And yes, the California government is pretty much a disaster. To be fair, no one I know has gotten IOUs for tax returns (file early!), but if you’ve seen Fresno, San Jose, or Sunnyvale – 500k doesn’t buy you much house, or much of a neighborhood. Blame the zoning laws. The property tax is also exorbitant. But at least in NorCal, the highways are smooth, and the public schools are pretty good. Although I shudder to say this, the Boston city government looks competent by comparison.

  • avatar
    Joe Chiaramonte

    I thought this was an interesting comment from the SJ Merc this morning:

    “However, it’s possible that even if NUMMI vanishes as a legal construct, Toyota might still continue building cars there, according to Toyota officials.”

    http://www.mercurynews.com/business/ci_12898638

    I think it’s absolutely a no-brainer for Toyota to flush the current scheme once GM walked away. Isn’t this the only Toyota assembly plant in the US with UAW representation?

    Interesting timing of the J.D. Power story: “Hey, nobody likes these Matrices and Vibes, anyway.”

    As a resident, I’m more concerned about the 4000+ homes that will potentially edge closer to foreclosure in a market where foreclosure notices in the newspaper have been running 100-200 per week for about a year (just for San Jose… I don’t know about what’s being printed in the east bay papers). That’ll be yet another nail in the state budget’s coffin.

  • avatar
    mikey

    @GS650G….You mention “violent protests” from the UAW. Could you give a specific time or date of the last UAW violent protest?

  • avatar

    “Diesels will never sell in North America, they are still dirty as compared to Hybrids, so even though most people on this list seem to like Diesels it’s not going to happen imho!”

    I don’t think many people shopping for a truck these days are cross shopping hybrids. For a truck a diesel makes perfect sense! And for a car there are plenty of people who would buy a diesel before they would by a hybrid, just most of these people are happy enough with gas.

  • avatar
    charly

    “but UAW wages would provide a comfortable, if modest, living”

    That is the problem. Assembly plants are such that the system they use only works when it is the best paying job. That is not true with NUMMI and as such it is much harder to keep “order”.

  • avatar
    Geo. Levecque

    If you do all your driving in a Stop and Go situation like most large Cities, then Hybrid Cars are the best as compared to present day Gasoline Cars!
    In Vancouver,B.C. all the Taxi companies run Hybrid Cars, it makes sense whereas Toronto, Ontario you see lots of large US style Cars being used as a Taxi, with all there problems.
    Granted Diesels are best for large Transport Trucks and even though VW use Diesel Cars, they are not popular for the enviroment, no matter where they run whether in Europe or North America, in Europe Diesel Fuel appears to be cheaper than is Gasoline ie less Tax on it I would think, but having visited many Cities in the EU, I find that there is a lot of polution that you don’t get here in North America so you will not get any Politician to admit liking Diesel over Gasoline or Hybrid vehicles.

  • avatar
    James2

    I don’t know about the plant, but as a non-truck guy I wish the Tacoma would go back to a sensible size. I saw a 4-door Tacoma long bed that would dwarf a late-80s (even early 90s) F-150. My god.

  • avatar
    SpaniardinTexas

    Actually, I don’t know how somebody can make a living with a blue collar job in the San Francisco Bay Area… but they will probably send the production to Mexico and San Antonio.

  • avatar
    mtypex

    I would have expected Mitsubishi to bow out of the American market before Toyota closed the California plant, but, I was wrong. Wow.

  • avatar
    Donethat

    Tacoma’s will be built in the Texas Plant that currently builds the Tundra. Nummi or what ever they will call it will continue to operate small sections of the Plant. Mainly the Stamping Department. Management is currently Training on operating these press line.

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