Toyota said Wednesday its decision to leave the NUMMI plant is “final,” and that it will pump $250 million into the Fremont auto factory to support bonuses for its 4,700 employees who remain on the job until the shutdown date, April 1.
The move supplies fresh evidence that Toyota Motor Corp. will proceed with its plan to abandon the New United Motor Manufacturing Inc. plant during the next few weeks.
“Toyota’s decision to end its production contract with NUMMI as of April 1 was difficult but necessary,” said Jim Wiseman, group vice president for Toyota Motor North America.
“Regrettably, our decision is final,” Wiseman added.
Word of Toyota’s final decision came the same day as a report released Wednesday that suggests the plant shutdown would deal a $2.3 billion blow to the state’s economy. Lawmakers and union leaders have attempted to squeeze Toyota to persuade the automaker to relent.
The plant is a quarter-century-old joint venture between Toyota and General Motors Corp.
“Although NUMMI is an independent company, Toyota has made a significant financial commitment to help ensure that production continues as smoothly as possible and that team members receive transition support,” Wiseman said.
The plant’s prospects turned bleak when GM abandoned the factory in the wake of its bankruptcy. GM was the first to jettison its ties to the factory. In August, Toyota announced it would also depart.
“We treated this
a lot differently than General Motors,” Toyota spokesman Mike Goss said. “Under our plan, at least these team members had some time to work on what their future is going to look like.”
The $250 million in funding depends on an agreement between the United Auto Workers and NUMMI. Toyota said it hopes the union and the auto factory can soon reach an agreement so the bonuses can be made available.
“We are offering this money so that NUMMI can distribute it to team members who build high-quality vehicles through the end of March,” Goss said. “This is one way we are saying thanks to those team members for doing this.”
The support Toyota is providing to NUMMI underscores Toyota’s decision to do its part to help employees transition to a future without NUMMI, according to Toyota.
“It is unfortunate that neither GM — NUMMI’s other 50 percent shareholder and customer for 25 years — nor Motors Liquidation Company, its current shareholder, has indicated that it will do the same,” Wiseman said.
Toyota’s $250 million commitment produced mixed reviews from Sergio Santos, president of UAW Local 2244, which represents members who work at NUMMI.
“That’s good news that Toyota is offering the bonuses,” Santos said. “It’s discouraging that they are not offering an extension to keep the plant running after April 1. We are trying to get Toyota to agree to an extension.”
The move by Toyota suggests the Japan-based automaker wants to keep high-quality vehicles rolling off the assembly line in a productive fashion, said Bruce Kern, executive director of the East Bay Economic Development Alliance.
“This is consistent with their efforts to produce quality vehicles at the NUMMI plant all the way to its last day of operation,” Kern said. “Toyota also has spent quite a bit of time with suppliers to be sure they keep their quality high.”
A report prepared by UC Berkeley professor Harley Shaiken determined that it would cost California taxpayers $2.3 billion to replace the NUMMI factory jobs and the supplier jobs that could vanish when the plant closes.
“The cost to the public of replacing these jobs would be staggering,” the report issued by the Toyota NUMMI Blue Ribbon Commission stated.
Including supplier employment, an estimated 25,000 jobs will be lost due to the plant shutdown, according to the commission’s report.
The expense to taxpayers to replace the positions is expected to be $92,000 per job, including wages, health care and social costs, the researchers estimated.
“The most immediate, direct, and cost-effective jobs plan available is to keep NUMMI running,” the blue ribbon commission stated. “Toyota would restore its image and retain a world-class plant. Workers and their families would make it through a dark economic winter. California would get further down the road to economic growth and a green future.”
Still, Toyota’s latest comments suggested the company doesn’t see NUMMI as part of that future. The automaker seems to be focusing on its other facilities.
“Looking ahead, Toyota remains strongly committed to maintaining a substantial manufacturing presence in the U.S. and will continue to employ thousands of people in California,” Wiseman said.
Contact George Avalos at 925-977-8477.