NUMMI RIP
Published: August 27th, 2009
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Toyota’s board has voted to end production at its NUMMI plant starting in March 2010, reports the AP [via sfgate]. The factory in Fremont, California, was a joint venture between Toyota and GM, but its future was first cast into doubt when GM announced it was withdrawing after discontinuing the Pontiac Vibe built there. The state of California discussed incentives to keep Toyota (and its 4,600 jobs) at the plant, but Toyota’s 1 million unit global capacity reduction was the higher priority. It’s possible that state incentives could lure other OEMs to the factory, but local incentive-grubber Tesla has already declined pursuit of NUMMI on the grounds that it was more factory than the start-up could handle.
More by Edward Niedermeyer
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Good cars came out of that plant. And frankly, the cost of living in California didn't exactly leave those Nummi folks rolling in it. I would think the typical UAW compensation package, in California, would be close to the bare minimum required to scrape by. I doubt any these folks had beach homes. Political leanings notwithstanding, I'm sad anytime Americans lose jobs. Soon, we'll all just stand around staring at each other, trying to sell each other overpriced coffee, homemade baskets, knock off purses, Avon, and whatnot. I can't help but think the ship is sinking fast.
This raises a lot of questions. So we are now supposed to believe that NUMMI was never profitable? Really? Toyota doesn't make a profit on the Tacoma or the Corolla? That is hard to believe. I suspect the truth is a bit different. Maybe: the NUMMI factory provides vehicles at cost to Toyota. Toyota sales adds a markup and sells them with a profit. Presto: Toyota makes a profit while NUMMI doesn't. Or: Toyota charges NUMMI and GM large fees for design and other services and makes a profit that way. Either way, why would Toyota build so many cars for so many years at NUMMI without somehow turning a profit?
EJ_San_Fran: I guess that's what Toyota learned from GM: build cars for years without making a profit.
UAW is a cost adder to a company. They do not easily work with a company. They do not allow mobility in situations. They protect poor work ethics. I am surprised that Toyota put up with it this long. Management at NUMMI had a king kong attitude and were abrasive to their suppliers which is a GM trait not a Toyota trait. Toyota works with their suppliers as they understand strong suppliers makes a stronger Toyota. NUMMI could never get rid of union attitudes nor did they want to they let those attitudes flourish. This place reminded me of a frosted mini wheat Toyota being one side and GM the other. I knew in 2008 that Toyota would take the first opportunity to get out when they could. Now 5000 people lost their jobs however most should have thought about making it more profitable when they had the chance. Unfortunately, some good people will get tossed out of a job too but hopefully Toyota will give the good ones a chnce to relocate to other plants. California has a strong power industry hopefully some can find a job in that field. Good luck to the good ones! Don't take that union attitude with you to the next job you will find yourself unemployed once again. Its a recurring theme in both countries.