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NUMMI News

By Matt Artz
Sunday, March 30th, 2008 at 2:03 pm in Artz, Fremont.

Here’s a post from www.thetruthaboutcars.com regarding NUMMI possibly no longer producing the Toyota Tacoma. Yes, he does misspell “Fremont.” I’ll contact NUMMI to see what they say.

NUMMI RIP? Toyota Considers Dumping UAW Plant

By Frank Williams
July 3, 2007 – 16,838 Views
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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  • William Spicer

    Cisco Field for the Oakland A’s, the Patterson Coyote Hills Development.
    Perhaps we need a City Council that is more concerned with existing businesses, then being Faux Developers.
    I hope the NUMMI Plant does not end up like the Centerville Redevelopment fiasco.
    We need City Council Members that are concerned about the WHOLE community not just developers, maybe NUMMI does not donate as much as Developers to there City Council Members re election campaign fund.
    The Time for Change is NOW

  • Charlotte Allen

    The yen isn’t as cheap as it used to be – it’s up 20% against the dollar in the past year. The continuing decline of the dollar may be the only thing that can save the NUMMI plant.

  • Frank

    For your Information NUMMI is not doing as they agreed in the contract. They are cutting costs from the bottom up and putting it all on the membership to take the hit.they want the membership to open up the contract or they will lay off. no matter what NUMMI will have to lay off so it is a no win situation for the membership. We the membership made NNNI what it was before this economic crisis, why can’t NUMMI understand we can not agree to open the contract unless they start to do as they agree to follow the Toyota way and stick to the agreement made by them and membership. we have been fair in all our contracts and have never asked for alot from NUMMI for now they need to stick to the contract unless they can do as they promised in the contract that we areed too.

  • frank

    too expensive to build cars in california, need to move another state. go non union. good place for A’s baseball field,

  • frank

    move oakland A’s there, labor too cost is to high.

  • frank

    too many defects,wheres the quality

  • Omar

    I wish UAW would’ve more involved in fighting for automobiles and motorist rights–which are essential for car sales and mobility. Too many Democrats, including Fremont’s own Assemblyman Torricos are hell-bent to either “get people out of their cars” or stick it to Auto and Highway users. AB798 Santa Barbara Nava (Dem) that opens the floodgates to Wall Street, Spain and Australia financier goons to open Toll Roads throughout California. Torricos own AB153 establishes the 800 mile network of Bay Area Toll lanes in our Carpool lanes (HOTT lanes)….Does all this money go to roads and cars that NUMMI can sell…Hell NO! It goes to Transit…BART…”to get people out of their cars” and not require BART to be more cost effective. Roads and Cars generate net REVENUE and JOBS for the state, not more costs and subsidies like transit waste! SO, WHERE”S NUMMI UAW Local 2244??? No where. Where are other (pro-) auto unions …no where, but in bed with anti-auto Democrats. Maybe NUMMI can demand that their state assemblyman Torricos and Senator stop and block AB153 to stop this anti-automobile Dem Madness–and save jobs. Member AHUA, NMA EAA and other pro-auto groups.

  • Michael Chaves

    I think toyota is playing every card they got and if the plant does close and Obama grants them no import tax,exempt on every possible thing thay want to bring in, toyota will get what they want! Free reign on the products they can. That would really put things out of balance. I definetly boycott anything toyota.!Their getting so many offers now ! breaks on everything. Our cost of living is way more than other areas.What do they want slave labor ? I dont think so

  • Vern Kaiawe

    $32 Plus Benefits? WOW! I Work For A Supplier (Brake/Fuel Lines) For 15 Years And I Eek Out Half That!! And I Live In California!! Gotta Find Ways To Get By And Not Want So Much That You End Up Losing All. Work Is Work! Gotta Expect Some Raises To Help With The Times But Geeze It’s Far From “Slave Labor”… “Slave Labor”???? That’s The Attitude That Brings In The Union And Now Here We Are…