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GM ending NUMMI partnership with Toyota

By Matt Artz
Monday, June 29th, 2009 at 12:27 pm in NUMMI, Uncategorized.

UPDATE UPDATE: I went down to NUMMI and stood at the edge of the property with several tv guys trying to flag down workers for a comment. Had I known this morning that I’d be trying to get blue collar guys to talk to me, I probably wouldn’t have worn my bell bottom pants.

Not much to report. One worker said GM rapes people and that he had confidence in Toyota. Another said he was scared, and a third just put is faith in G-d.  Most just sped past us in their cars. I was surprised how many NUMMI employees wear “NUMMI” related t-shirts to work. I only wear my Argus shirt to the gym or painting parties.

 

UPDATE: A more thorough story from the LA Times.

From Associated Press.

GM ending Nummi joint venture with Toyota

NEW YORK (AP) — General Motors Corp. says it is ending its joint venture with Toyota at a Fremont, Calif., manufacturing plant after the two automakers failed to reach an agreement on a new product there.

New United Motor Manufacturing Inc., or Nummi, produces the Pontiac Vibe for GM and the Corolla and Tacoma for Toyota. But GM is phasing out Pontiac and had been in discussions with Toyota about the plant’s future.

GM says it was unable to reach an agreement with Toyota on a new product for the plant and says its stake in Nummi will become part of the “Old GM” that will be sold off during its bankruptcy process.

A bankruptcy court is scheduled to rule Tuesday on GM’s proposed sale to a new company majority-owned by the U.S. government.

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  • Ken Frey

    GM doesn’t seem to have learned much of a lesson. I had one of their products – a Nova which was essentially “a Corolla with a Chevey bow tie” and it was a great car. GM did little to support the sales for that and the subsequent Geo line. We’ve also had a Saturn for several years and it’s holding up very well – another line they didn’t support and are now dumping. A slimmed-down dinosaur with lipstick is still a dinosaur. And we know what happened to the dinorsaurs!

  • Irvington

    I’m with Vinnie – let’s all hope they can keep their heads above water making the Tacoma and Corolla.

    http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/06/29/financial/f111055D24.DTL&tsp=1

  • Fremont Res.

    It’s the only assembly plant west of the Rockies. It’s small wonder it’s survived as long as it has.

    Hopefully, Toyota can think of something to fill hole in capacity or come to an agreement to reduce it (GM has made the task difficult, though, by leaving the UAW to man the place).

    Unfortunately, I think two great malls within 10 miles is probably not workable.

  • Marty

    Realistically, why kind of odds are each of you putting on NUMMI remaining viable?

    I think the best case scenario is the Tacoma being built through it’s current design (redesigned in 2005), at which time production will move to the underutilized Tundra plant in San Antonio. The last model Tacoma lasted from 1996-2004, with minor changes between. They don’t redesign them often, but at this rate expect d-day to be in 2014.

    The Corolla and Matrix have both been redesigned this model year (I believe), and assuming that it is quite an effort to re-tool a factory elsewhere, I am betting that the cars will be assembled in Fremont until the next redesign – Toyota sedans are redesigned more frequently than their trucks, about every 4 years. So, d-day for the Corolla/Matrix is in 2014 as well.

    And don’t forget that there is no tariff exclusion for Toyota building sedans in Japan, as there is with trucks and SUVs.

    Just my armchair analysis, but I think the above is the best case scenario.

  • Doug

    From S.F. Chronicle report:

    “For Fremont, where the Nummi plant is the city’s largest employer, the effects of GM’s pullout remain uncertain. Fremont Mayor Bob Wasserman said while GM’s move comes as no surprise, he’s still trying to weigh the affect it will have on the plant.

    Wasserman said the decision is a sign of the troubled economic times in California, which already faces a $24 billion budget shortfall and has a record 11.5-percent unemployment rate.

    “We’re hoping for a turnaround, but it appears there will be more damage before that happens,” Wasserman said.”

    Full article:
    http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/06/29/financial/f111055D24.DTL

  • http://www.shahforcouncil.com Ishan Shah

    Oh no. ALL BAD. The plant isn’t going to close is it Matt?

  • Doug

    From today’s Argus report. This is the key paragraph:

    “…NUMMI is about twice the average age of Toyota’s other North American vehicle assembly plants. Moreover, it is the only North American plant with union-arbitrated wages and work rules, which Toyota might consider bothersome enough to warrant closing the facility…”.

  • http://www.shahforcouncil.com Ishan Shah

    Crap. This can’t be happening….

  • http://www.shahforcouncil.com Ishan Shah

    thats some 35000 jobs at risk!!

  • Doug

    Ishan, how did you arrive at 35,000 jobs at risk?

    I’ve heard numbers more in the 7,500 – 10,000 range given the number of suppliers, truckers, etc. that service NUMMI.

  • Doug

    Okay, now I know where the 35K number came from…

    Questions Raised About Nummi Plant’s Future
    FREMONT, Calif. (KCBS) – Fremont officials are waiting nervously to see what becomes of the Nummi plant, now that General Motors says it’s pulling out of its longtime joint venture with Toyota.

    At least one Bay Area congressman is looking to see whether the federal government should step in to offer assistance.

    Rep. Pete Stark, D-CA, told KCBS that he has talked to a high level Toyota executive, who told him they have to reassess everything from the state of the auto industry to the economy, to how they operate without GM support – issues that simply cannot be resolved in a week’s time.

    Listen KCBS’ Holly Quan reports

    There is no indicating that all of the federal help being given to GM would tricked down to GM’s partners, and Stark is not pleased about that reality. “It’s an American plant, I mean, they have a Toyota name on it but operations like that don’t get to be much more American,” declared Stark. “We’ve got 4,000, 5,000 jobs.”

    On the other hand, he’s not thrilled about all the government help being given to help bail out other for-profit companies like Wall Street banks, either.

    In addition to its direct workers Nummi supports another 35,000 jobs in the region through warehousing and parts suppliers.

  • marty

    I’m not exactly sure what Stark is expecting the Fed to offer up here. Is NUMMI too big to fail?

  • Gus Morrison

    All the stories talk about NUMMI being Fremont’s largest employer. But, I believe NUMMI is Alameda County’s largest private employer.

    When GM closed in the early ’80s, the impacts on Fremont were minimal, but the impacts spread across the region from Gilroy to Richmond. Senior management types from GM were moved to other facilities, so the brunt of the closing fell on production workers. Many of them transferred to other GM facilities in places like Oklahoma City and St Louis. Today, that is not an option.

    As mayor, I met with Toyota in late 2004, trying to convince them we were the place to build the Prius. The governor tried at the same time. We could not get a response and see where we are.

    As I type this, I recall a meeting with the GM people in 1979, when I was a new councilmember. They had just eliminated the swing shift. Congressman Don Edwards covened a large meeting with local electeds and GM to try to convince them to build their new “x-car” in Fremont. The plant manager, in his infinite wisdom, said “Americans don’t want small cars” and closed his ears. I pointed through the window to the parking lot, half filled with Volkswagens. He, as did GM, ignored that obvious fact. They continued to build big cars that we didn’t buy and in a very few years, the plant was closed. My faith in the management of America’s auto industry began to die at that meeting.

  • Doug

    “…a high level Toyota executive, told him (Stark) they have to reassess everything from the state of the auto industry to the economy, to how they operate without GM support – issues that simply cannot be resolved in a week’s time.”

    From what I’ve read Japanese auto companies have 100-year plans. Something tells me they developed contingency plans for just such a time. Now what will it be? Marty’s 2014 date sounds right. This gives COF time to begin developing other business opportunities.

  • kyle

    Clearly this is a curse from Lew Wolff. Kohl’s and Costco will be next.

  • Differing opinion

    What’s with the comment about wearing your bell bottom pants if you knew you were going to talk to a blue collar worker? Is that some kind of insult directed at blue collar workers? We can’t all be as fortunate as Mr. Artz and get to hide behind a keyboard and let our personal opinions fly. Some of us actually have to go out and work for a living in our blue collars. I’m sure those individuals, who probably just heard they were losing their jobs were in no mood to speak to reporters.

  • Matt Artz

    Differing Opinion, I make an effort to dress in similar attire to people I know I’m going to interview. Older reporters have told me that people are more likely to open up to and feel comfortable with someone who dresses like them. So if I know I’m going to cover something at the Port of Oakland, I’ll wear dickies and sneakers. If I have to go to the courthouse and interview lawyers, I’ll wear dark shoes and tuck my shirt into my pants. I might even wear a tie. The exception, I suppose, are council meetings. Most city types wear suits, but since the other press guys dress like they’re at a hot dog eating contest, I figure an untucked collared shirt should suffice. I don’t think those NUMMI guys sped past me b/c I was wearing bell bottoms, but I do think that after a long shift, they’re probably more likely to talk to a guy who looks like he just walked out of the plant, and not a disco.

  • John

    I think Marty has it about right. Toyota will not be manufacturing cars or trucks in California after 2014. However they will probably be gone sooner. Most have not paid attention but the controlling economic entity in California is now the California Air Quality Control Board,”CARB”. This is where the power is and will continue too be for the foreseeable future. Instead of rolling back many of the onerous restrictions on private industry in our State as we suffer through this recession “CARB” is not slowing down but moving ahead as planned and all fees,fines and restrictions on private industry will be in place and fully implemented by 2012. Toyota’s a smart company, they have already evaluated the effect “CARB” regulations are having on profits. They also know that other States are welcoming them to expand and move production there as California is chasing them away. The last vehicles will roll of the line by the end of 2012 and the NUMMI plant in Fremont will be dismantled and shut down by the end of 2013.