Toyota closed the last chapters of the book on NUMMI, wrote a check for $6 million, and put the book to where it will collect the dust of history. According to Reuters, Toyota reached a $6 million settlement with former NUMMI workers.
The suit was brought by workers on medical leave when NUMMI was shut down in March 2010. It’s not that they had gone empty-handed. After GM had pulled out of NUMMI in June 2009 and left Toyota holding the bag, Toyota announced plans to pull out by March 2010. Toyota had negotiated a $281 million settlement-agreement with the UAW-represented workers, while GM was whistling Dixie.
At the time it was clear that some union brothers were more equal than others. Through careful wording, sick or injured workers who did not meet certain attendance requirements received only $21,175, which left more of the pie for the able-bodied workers. Workers with over 25 years of experience received $68,500. This was clear when the contract was accepted with a 90 percent majority. For its services, the UAW pocketed 3 percent of the severance payment. At the time, the UAW owned 17.5 percent of GM. The disputes led to union meetings as the one above, and to more intelligible, but not less colorful ones as this one (wear headsets at work:)
Contract or not, the slighted workers brought suit. They sued Toyota, not the union that negotiated the deal on their behalf, a deal they had signed. The suit ground its way through the wheels of justice, and is now settled.
About 500 workers are expected to file and receive awards from the settlement, says Reuters. There must have been an epidemic in Freemont at the time. The plant was said to have employed a total of 5,400 employees, including 4,550 UAW hourly workers. Any way you slice it, that’s an absentee rate of around 10 percent.
The shafting continues. The biggest chunk of the settlement, $700,000 goes to lawyers. The remaining $5.3 million will be distributed – according to a new formula. If all 500 will apply, the average payout will be around $10,500. But in a time-honored tradition, some will get more, some less.
” Any way you slice it, that’s an absentee rate of around 10 percent.”
I don’t think so. You’re assuming all of those 500 workers were absent every day. I doubt that was the case.
The way I read it, they were absent when the plant closed.
Plant closures are HR nightmares. Absenteeism is always rampant, morale is low, quality dies and your facilities / overhead goes to hell. 10% isn’t bad, unless you’re talking LTD. The LTD numbers I have been privy to were in a union free die cast plant and it was around 2-3%, with some ‘on the books’ due to settlements. But if that’s ‘unscheduled,’ I’d say that’s a testament to the workforce. I’ve been walked out of a company, and had I had fair warning, you could bet your ass I would have burned some sick leave.
I’ve held witness to a textiles plant not restarting after a major railroad shafted the plant in court. The suit was caused by a chemical spill by the RR that shut the plant down. When a manufacturing site closes it’s doors, it’s worse than a funeral. You see a (often times) century old part of the community die. The owner gave what he had left in the coffers to the people that wound down his last contracts then shut the doors. I saw the best and worst of human nature in a very short time frame.
The UAW was bred in the violent, early part of the century, and the anti-symbiotic nature is still present. Culture is hard to change within an organization, especially when new blood has been absent from the UAW since the early 90’s. It is a very human organization.
That’s why most plants (atleast non-unionized) only offer production employees STD, LTD is for the office types only these days and it makes some sense.
Getting out from under the UAW will probably make this the best 287 million dollars Toyota ever spent.
And it was for marketing purposes only, toyota owed them nothing, they were GM’s employee’s, toyota was basically just leasing them.
In the overall scheme of things, all in all it is a small price for Toyota to pay to get out of this ill-fated relationship with GM and the UAW. They’ll never make that mistake again.
There were plenty of people in the distant past who pointed out that a partnership with a domestic manufacturer and/or a relationship with the UAW would result in a costly failure. So Toyota has only to blame themselves for this financial fiasco.
And if the UAW threatens to want to form new alliances with Toyota and other foreign manufacturers in America, the foreign manufacturers always have the option to pull the plug and move production OUT of the US to Mexico, Central or South America, like many have already done, i.e. Mazda.
In the mean time, and in the future, the buying public can voice their opposition by buying a vehicle made in the US by Americans, for Americans, from a non-UAW assembly plant in a right-to-work state.
“In the overall scheme of things, all in all it is a small price to pay.”
Note on son, sent back alive with one ear removed, after $6m payment was made.
I think you nailed it there, Bertel.
6,000,000/50,000,000,000=0.012%
Compare their loss to the citizenry, they got off lucky.
NUMMI was toyota’s foray into the US labor environment. It wasn’t a mistake; it was an experiment. I’m not going to pick your sentiment apart, but in my opinion, I think it was rather successful. All of their other manufacturing sites are in right to work states. I’d say their experiment taught them something (good or bad is personal opinion).
GM thought they could learn something about the TPS. Lean manufacturing isn’t rocket science, but practicing lean with union work rules is.
Yeah its called once burnt twice shy
https://www.thisamericanlife.org/561/nummi-2015
An interesting listen.
Evidently the depths of depravity to which GM mini-managers and the team of White House Felon/Cretins will go are not yet measured.
I will never, evah purchase a GM product again. (Not even the Corvettes which I have loved and owned….)
May the flies of a thousand camels land in the UAW beer…
TOYOTA. Now 100% UAW-Free!
Evidently the depths of depravity to which GM mini-managers and the team of White House Felon/Cretins will go are not yet measured.
LOL….wut?
Tin foil hat on a little tight?
Hard-to-verify disability claims always remind me of a saying: “Illness is the vacation of the poor.” Of course, calling in sick for a day or two every month is practically the norm in some circles.
An expert on Oklahoma’s workers’ compensation system told me that companies, especially those in eastern Oklahoma, had learned to give no advance notice of a plant closing. He said if any workdays are left before the scheduled closing date, there will be an explosion of work-related injury claims. Sorta like employee-initiated severance pay, eh?
Don’t forget the work rules in California, combined with the Soviet-esque UAW, was the final nail in the coffin for NUMMI.
Toyota upper management is not stupid (even with the ‘unintended acceletation’ mess last year). They know parasites when they smell them. The decision to pull out of NUMMI is among the best I have ever seen them make business-wise. There is a reason the Texas Tundra/Tacoma plant ISN’T union, and I doubt those guys work for minimum wage (although, GASP, they might have to pay for their own retirement/healthcare).
As evidenced by recent votes by other workforces of ‘transplant’ automakers in the southern US lately, the UAW is about to go the way of the Dodo, and they know it. Their insatiable attempts to insert themselves into these plants proves it; these are their final throws in a fight that ended decades ago (pay inequality, outlandish benefits, etc).
P.S. Honda, Toyota, VW, Hyundai, etc. DIDN’T NEED A US TAXPAYER BAILOUT. Get a clue, get back on the line, shut your mouths, and GET BACK TO WORK, guys (union auto workers), lest someone who actually appreciates the job takes it from you, and then what are you left with? That’s what I thought…
The last line of the second video explains it all–unions are big business, and they have all the same tendencies, intentions, & flaws of any other big business.
Fremont just has one e.
Not much else to say… I don’t blame Toyota for this one.
I’d say we’d have to know more before declaring NUMMI a “win” or a “loss” for Toyota. The amounts paid out need to be offset against whatever profits vehicles made by the plant over its roughly 25 years of operation churned out, for one thing. And I had always heard that a big reason for getting into bed with GM at NUMMI was to get a good look at the USA supplier base (via access to GM’s supplier data base) before opening Georgetown a couple of years later. As well as testing the water as to whether UAW workers (or American workers for that matter) could indeed build Toyota’s. By the time it was all over, I personally don’t know if it was a success or not (and Toyota might never go public with its own true views), but I think declaring NUMMI a mistake or not based just on the closure costs is making a judgement without taking into account all the pro’s and con’s of a plant that did indeed operate for a quarter of a century.
Here’s a NUMMI protest from the past. Look who comes on at 2:45. In fact, press “print screen” around 3:15, then open MS Word and hit “paste.” Instant poster for conspiracy theorists everywhere.
Wow. I’m so grateful those commie pieces of vile are unemployed. I’m just sorry that most of them are still alive. Baby steps. Eventually patriotic Americans will realize that they’re suffering so that people further from their ideological values than any enemy we’ve ever faced on the battlefield can have a free ride.
Wow… Good catch! Not surprised… :(
I’m a contractor. In 2008 on the Friday before Thanksgiving week I got a call saying don’t come in on Monday. “I let it go. And I said to myself, this is the business we’ve chosen; I didn’t ask who gave the order, because it had nothing to do with business!”
Since then I have upped my income, up yours.
Ever wonder why Toyota fights to keep the UAW out? Think they might move plants to Mexico if threatened by organization? Answer not needed.
However the story isn’t clear about whether Toyota had to pay the full amount of severence/medical since this was a 50/50 ownership with GM. Seems they would be responsible for only half of the settlement with GM liable for the other half, but of course protected by bankruptcy from payment. My guess this question is as stupid as my first two.
Once again – this blog pretends to be about cars but seems to be more of a venue for right wing teabagger types to express their politically-motivated hate toward unions (which translates to Democrats.)
I am with a large (in fact THE largest) percentage of Americans who support unions. I buy cars made by union workers. My Corvette is a dream car built in Kentucky, by Americans who are UAW members. I’d never buy a car built in a right to work state. Period.
@sbourne….Right you are, that would explain why the few of us here that have first hand experience in this area,don’t bother to comment.
Please don’t stay silent mikey! This site and its readers need your perspective! Otherwise it will just become another self-reinforcing group think mess! Please don’t give up!
Right wing would be Republican. Otherwise, that video is embarrassing to watch, unrefined is a word that comes to mind. I would be surprised to see the UAW even around 50+ years from now.
I ran the gamut of political affiliations since I was born into a Democrat, union-member household. When I got old enough to vote at age 21 my very first vote was for Republicans because they reflected my beliefs more closely.
A few years ago I turned into an Independent and have voted for the best candidate on the ballot, even if they had no chance in hell of winning anything.
There was a time when there was a need for unions, but that has since been displaced by all the regulations and mandates that the federal government has levied upon employers.
There are so many different ways to ensure that workers are receiving fair treatment these days that unions have become obsolete, serving only to enrich the politicians they support and fatten the pockets of the union leaders at the expense of the members who pay, and pay and pay and pay.
Employers, business owners, corporations have only one overriding responsibility and that is to make money. Employees are entitled to no more that a fair wage for a fair day’s work, all prescribed by the federal government mandates for employers. Those by themselves are restrictive enough.
Employees do not share the risks that owners and investors do, yet from what we see in this article, the employees of a failed venture expect and demand that they are compensated. That union helped drive GM and Chrysler into bankruptcy with their demands and collective bargaining, and their members wholeheartedly supported those efforts. Now they are crying because they’re unemployed, and not employable.
So my take is that Toyota bit the bullet and figured it was best just to pay out and to avoid any future ventures with domestic partners and unions. I agree with that.
Toyota will make a lot more money in the future in just North America than what they had to pay out for this failed joint venture. It is up to the buying public to buy UAW-made goods if they support the UAW, or buy something else if they don’t. We have a choice in America. Let the sales numbers speak for themselves!
“I’d never buy a car built in a right to work state.”
You don’t want workers to have the right to choose not to fund organized crime and the dismantling of all of our freedoms. You’re not a good person.
+1 @ CJinSD
Any website about cars that’s more than just very basic review will have to include a UAW story or two because they are so integral to the domestic auto manufacturers. Didn’t the UAW get part ownership of GM and Chysler in the bankruptcy?
I also take issue with “the largest” percentage of American’s who support unions. Is that from some political push poll? Private sector union membership has been on a slide in the US for decades. Only public sector unions have grown and that party is about to end the same way it did for the private sector, driving gov’t into bankruptcy.
Prior to going to college I worked in a union shop. Being a closed shop I had to join the teamsters, where I got an education in how to work “slow.” There was ZERO reward for productivity. If I worked hard I couldn’t get a raise, a bonus, nothing. Union contract was strict seniority. Well, the senior lazy bastards went on strike when their contract was up. Management called their bluff and moved the entire plant to FL. Employees down there (the few that moved) were give higher wages than we had up north including full medical and thus nobody wanted to join the union. Sound similar to NUMMI? This is happening all over the country like it or not.
I have worked in both union and non-union shops. Union shop = benefits and good pay… non-union = no benefits and low pay. Example: there are two supermarkets in our town: one is union and the other non-union. The union shop workers have health care, a retirement, and get paid $15 an hour (hardly exorbitant, especially in California). The non-union shop workers have no health care, no retirement and are paid $8 an hour. Oh, there is ONE big difference: the manager of the union shop “only” makes $80,000 a year, whereas the manager/owner of the non-union shop makes $180,000 a year… So, are unions bad? Well, they ARE bad for the owners!
Hey Jeffy: I’m calling bs on your numbers. Make that capital BS.
And now UAW wants to unionize Toyota plant in the South? Good luck with that. I think even if somehow all of the worker in the plant decided to join the UAW, Toyota would probably pull out of the U.S. entirely and build a plant in Mexico or something, rather than have to deal with UAW.
Meantime Americans will lap up union built cars coming out of Germany, Japan and Korea.
Difference is, those foreign unions did not drive their employers into bankruptcy and financial collapse.
The UAW drove GM and Chrysler into bankruptcy and financial collapse.
Proof is that what was once known as Chrysler is a now a wholly-owned subsidiary of Fiat, an Italian company. And it cost we, the people, plenty of cash money to bribe Fiat to take that defunct company off our hands.
GM is still owned by we, the people, and the prospects for getting back the bail out money is dismal, at best.
Fortunes have been made selling foreign-brand cars and trucks. Equally true is that fortunes have been lost selling domestic-brand, UAW-made vehicles. In fact, so much so, that we, the people are still the unwitting and reluctant proud owners of Government Motors.
I’m from Pittsburgh which was an early flashpoint in union history, specifically the 1892 strike against Carnegie Steel (http://en.wikipedia.org/wiki/Homestead_Strike). Given the situation at the time, I could see why there was a need for unions, but the 21st century is no longer the case. My father and most his his generation worked in the steel mills here until their closure in the early 80s. He would freely admit to anyone it was the unions who DESTROYED the steel industry in this city. The union model was only sustainable with lack of serious competition outside of their control. They would ‘represent’ workers in Company A, B, and C, it didn’t really matter who those companies where, because their demands would remain the same, in essence they became leeches. With the advent of globalization, mills in England, India, and later China could produce steel drastically cheaper than here, why pay for union steel when you can get foreign for 1/5th the price? The great irony is the unions succumbed to the very greed and corruption they sought to fight against.
The only place a union should exist today is for those who are dealing with the public’s lives… Police, Fire, EMS, Nursing, etc. The only reason I say this is because our society is so backward they seek to crucify those who work for the public’s good should those people happen to make a mistake. Disband and outlaw the rest.
My dad was a member of the IBEW during the fifties and sixties and had to put up with union rules and the concept of “a job for everyone” which meant he wasn’t allowed to do anything other than his own assigned union-sanctioned job. So it was that many projects fell behind in those days because jobs were waiting for other union members to do their share of the work.
My dad was a Master Electrician and had to wait for other union members to install wiring or to clean up a site before starting the next job which had to be prepped by yet other union members.
When he was offered a civil service job with the JPL at Los Angeles AFS he jumped at the chance and worked there until he retired at age 65. Money wasn’t as good until he got to the GS-12 level.
While new to the job and for three years after, the union steward for the Federal Employees union came around and put a lot of pressure on my father to join up (or be shunned by other members). But he held firm and was promoted to the GS-12 level on merit and experience after three years which put him out of the union’s grasp and smack dab in a management billet.
I think that there was a time when unions made sense, but these days the government makes sure that employees are well protected.
What the UAW did to GM and Chrysler was inexcusable and I think that what Toyota chose to do to settle all this was the best thing they could do in a bad situation. Experiment or not, Toyota learned an expensive lesson but I am certain that Toyota will recoup all that money, and more, in future sales in the US alone.
I’m no fan the domestics or the UAW. I generally buy Honda and Nissan, usually with a 3rd pedal.
That said, boycotts do not work, the bailout is done, the money spent. Maximize YOUR personal well being when in the market for a vehicle. If I were in the market for a casual use pickup, I’d probably get the best one for the buck, a Silverado.
The extra margin that GM gets from this sale means almost nothing. The benefit to me, with the money I save over a Tundra, is significant:
I can support politicians and organizations that will have the guts to put a bullet in GM’s brain if it crawls back to the taxpayers a second time.
I can support governors like Scott Walker willing to do the hard thing toward unions.