NUMMI and Fremont
By Matt Artz
Monday, July 6th, 2009 at 8:25 am in NUMMI, Uncategorized.
Click here for a new story on NUMMI. It says the future of the plant probably hinges on negotiations with the union, whose contract expires next month. Toyota will want concessions.
If NUMMI goes under, what does that mean to Fremont. It would be a big hit for the regional economy, but not a knockout blow to Fremont.
The city gets nearly $2.2 million a year from NUMMI, but $1.9 million of that is property taxes, which wouldn’t go away, although it could be reduced if the plant closes. The city also gets about $280,000 a year in sales tax, business license tax and assorted permits. That’s about the cost of two rookie cops. For reference, Fremont has a $130 million general fund budget.
How about jobs? I’m told between eight and 12 percent of the roughly 5,000 NUMMI employees live in Fremont. So that’s about 1,000 new jobless city residents. Also the vast majority of the NUMMI’s suppliers are from out of town.
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July 6th, 2009 at 11:14 am
Other businesses, too. A good friend owns a shop in Irvington, and tells me that a good chunk of his customers are NUMMI folk. The tendrils branch out.
July 6th, 2009 at 1:53 pm
Glenn’s right. Local eateries pick up quite a bit of business from NUMMI.
Regarding negotiations between Toyota and the union, if this was a card game I would prefer to be holding the cards Toyota has vs. the union’s.
July 11th, 2009 at 9:17 am
As Nummi slips into the sunset, what is our City Council doing.
Who, in the city of Fremont is responsible for communicating with Nummi.
Did the City Council spend to much effort to bring the A’s here and upset Nummi.
What will the closing of Nummi do to the City of Fremonts budget, small business owners.
I do not think this is a ploy, by Toyota, to deal with Union negotiations.
What will happen to the unemployed Nummi workers?
July 11th, 2009 at 10:46 am
As with any business, the loss of this “customer” and associated revenue is not good for our economy, local and otherwise. I hope that all stakeholders will work aggressively towards an agreement that allows all to share a reasonable portion of the economic downturn.
That said, if our worst fears are realized, there should be a commensurate impact (of what scale I have absolutely no idea) on the demands for city services which are a direct or indirect result of NUMMI operations. While those of us within the community focus on the prospective loss of benefits, this is only one side of the equation. I would be surprised if our city managers have not previously made estimates as to the costs to the city associated with NUMMI operations who is undoubtedly one of our largest “customers”.
July 11th, 2009 at 6:51 pm
It had not occurred to me until you brought it up, Cal, that a portion of Toyota’s calculus regarding whether to stay in town or go might be tied to the City’s enthusiastic backing of the stadium proposal which Toyota, as a NUMMI partner, knew full well would have a negative impact on their operations. If you have a big, long-term business in town that employs lots of people, it’s not generally speaking a great idea to do your best to tick them off. Yet another example of thinking ahead by our Council, Planning Commission and City management.
Don’t forget, folks – Council elections are coming again next year!
July 12th, 2009 at 12:17 pm
From an insiders view, Toyota is pulling out of NUMMI within the next few months. Don’t blame Toyota though, they wanted to continue with GM at NUMMI. Can’t really blame GM either, economy is horrible and unfortunate decisions must be made that aren’t popular with some. For the posters who would like to see NUMMI stay open ask yourself this, if it were your business, would you keep it open? I wouldn’t.
July 12th, 2009 at 3:31 pm
From today’s SF Gate:
Possible Nummi plant shutdown worries Fremont
Carolyn Jones, Chronicle Staff Writer
Sunday, July 12, 2009
From the strip malls to the sports bars, Fremont was sputtering Saturday on news that Toyota might close its sprawling auto plant here.
“For a lot of people in Fremont, this would be the end of the world,” said City Councilman Bob Wieckowski. “Fremont grew up as a blue-collar city.”
Toyota announced Friday it’s considering closing New United Motor Manufacturing Inc., the Warm Springs auto plant founded 25 years ago as a joint venture with General Motors. GM pulled out of the plant in June after declaring bankruptcy.
Nummi is the largest private employer in Alameda County. Its closure would mean the loss of at least 4,700 plant jobs and affect thousands of others who work for suppliers, trucking firms and other businesses that cater to the auto giant.
At Kirby’s Sports Bar near the factory, the regulars were drinking a little more Jack-and-Coke than usual, said bartender Kendra Atkins.
“There’ll be a lot of people in Fremont without a job,” she said. “But we’ll be OK. They’ll still come in and drown their sorrows.”
Dan Houle, a forklift driver at Nummi for 24 years, was among those seeking solace at Kirby’s Saturday afternoon.
“It’s very scary,” he said. “There’s a lot of quiet, silence over there. This is going to hurt everyone big-time, not just Fremont.”
Nummi brings in $2.3 million a year in property tax for Fremont, the Bay Area’s fourth-largest city. The city can scarcely afford to lose the funds – it’s already reeling from a $16.3 million budget shortfall that has resulted in the loss of 74 city jobs and much of the city’s reserve fund.
Adding further insult, the city in February lost a proposed $1.8 billion “ballpark village” development when the Oakland A’s scratched plans to relocate to a site near Auto Mall Parkway.
“Six months ago, things looked great,” Wieckowski said. “Now we’re thinking it could all be over.”
Saki Kavouniaris, owner of Spin a Yarn restaurant near the Nummi plant, said his business would be devastated if the factory closed. The seafood and steakhouse regularly hosts Nummi retirement lunches, awards ceremonies and happy hours.
“When the old GM plant closed in 1982, this place was like a ghost town,” he said. “I knew things were bad, but I never thought this would happen. We’re already struggling.”
E-mail Carolyn Jones at carolynjones@sfchronicle.com.
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/07/12/BAL318N2ES.DTL
This article appeared on page C – 2 of the San Francisco Chronicle
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What Mr. Wieckowski doesn’t say is that building the stadium here would have exacerbated both Fremont’s and NUMMI’s problems, and that perhaps his Council’s actions in support of the stadium project are a contributing factor in Toyota shutting down their business here.
July 12th, 2009 at 8:33 pm
I dont think A’s stadium has anything to do NUMMI shutting down. NUMMI is shutting down because 1. GM is dead, 2. UAW is too costly for toyota.
Now actually the stadium deal doesn’t look so bad in hindsight. That whole area is going to vacant for decades. I wont be surprised if one by one pacific commons shops start shutting down too (circuit city, ritz camera, and counting…). Actually other than Costco and some chinese restaurants, all other shops are struggling there.
After the stadium fiasco and with this bad economy, I doubt there will be business owner who wants to set up shop in fremont. Future seems bleak for fremont.
July 13th, 2009 at 8:04 am
Change to my first post. Probably won’t be a couple of months, more like August 14th. Announced near the end of July.
July 13th, 2009 at 8:55 am
I agree with both of Andy’s points. NUMMI’s problems have nothing to do with the A’s deal or the City council’s positive or negative influence. To think that Toyota makes decisions based on a grudge sounds ridiculous to me.
And, there will come a time where we’ll be kicking ourselves over the A’s deal. Not that it was so important to bring the A’s to Fremont. But I get the sense that the competitive edge Fremont may have had, and the interest that large firms were taking in Fremont folded with the A’s deal.
July 13th, 2009 at 4:57 pm
A’s in Fremont is a joke. Fremont population is >50% immigrants from Asia and a bit from Europe. Not only they do not care about baseball, they were afraid fun would bring violence to their expensive neighborhoods + extra traffic.
A’s was a bad idea for Fremont from get go, City tried to do it against majority of its population and it failed to impose it after residents made their opinion known.
July 13th, 2009 at 7:13 pm
“But I get the sense that the competitive edge Fremont may have had, and the interest that large firms were taking in Fremont folded with the A’s deal..”
COMPETITIVE EDGE ?
THe only edge Fremont offered wolfe and Co was a naive ineptitude that Wolfe would have had a field day with. THat same “edge” still exists – but, personnel expenses (salary + benefits) keep most serious businesses looking beyond California for more competitive cost structures.
July 13th, 2009 at 8:26 pm
Anony, I agree that California is loosing is prestige, specially with companies who employ 500+ people. I’d even extend this thought to include CA losing it’s prestige with all businesses, high earners and tech entrepreneurs. This is especially true for the Bay Area.
But, my point regarding Fremont’s competitive edge was in reference to other Bay Area cities, with a wink toward Oaktown -who wants set up shop there? And, I say this because I just don’t buy the into the idea that Wolff was looking for easy pickings, because IMO the Auto Mall development was a truly symbiotic one. Everyone lost when the economy made the supporting residential and retail prohibitive. I think that’s going to become more and more obvious in the coming years.
July 13th, 2009 at 8:28 pm
I agree with Anony. While it’s true that NUMMI’s problems aren’t related to the A’s, our city leaders indicated they were willing to ignore NUMMI’s concerns to make the ballpark happen. It’s not holding a grudge, it’s realizing how committed the city is to doing what’s right for you and your business.
Despite Fremont being in the news more, I don’t know of any ‘large firms’ taking an interest in us due to the ball park. I maintain that companies like software and bio-tech (i.e. the kind we really want), would actually not want to be located a freeway exit or two from a ballpark. The only ‘large firms’ I know that gave their opinion about this were Kohl’s, Costco, Lowe’s and NUMMI, all of whom did NOT want the ballpark.
July 13th, 2009 at 8:46 pm
“I maintain that companies like software and bio-tech (i.e. the kind we really want), would actually not want to be located a freeway exit or two from a ballpark.”
I think that’s nonsense, Vinnie. The UCSF embryonic stem cell research center is within walking distance from AT&T Park, and China Basin Landing is slated to become a biotech research hub.
July 13th, 2009 at 8:58 pm
I may add, Vinnie that we may never know how the presence of a ballpark would influence the interests of large firms. What we do know for a fact is that your strategy of running Wolff out of town preserved the high paying jobs that Kohl’s, Costco and Lowe’s provide and those NUMMI is about to kill off.
July 14th, 2009 at 7:57 am
AT&T Park is located near a bustling downtown area that already has an excellent transit system in place. That downtown was there long before the ballpark. The comparison isn’t valid.
Traffic would have been horrible in that entire area on game nights. If I were the CEO of a small company, that would be a big negative for me.
I love how people say we (i.e. FCN) drove Wolff out. It was Kohl’s, Costco and Lowe’s that ultimately killed the deal. We simply didn’t think it would have been good for Fremont. Didn’t we have a constitutional right to voice our opinion?
BTW, if you did the math from the A’s economic report, the average salary of the jobs generated by the ballpark was about $26,000. Also, while economic projections are always murky, the studies that I’ve read indicate that sports teams are NOT good economic generators.
Anyone would at least have to acknowledge that bringing the A’s to town would have been risky. As I asked during my campaign, was that really a risk we wanted to take? Clearly in this economy, the rosy projections that the A’s gave would not have come to fruition.
July 14th, 2009 at 10:03 am
I understand the public transportation component, Vinnie. You need to be more clear, because businesses have no qualms about locating near a ballpark as long as there’s infrastructure to support it.
I do find it amusing that the FCN -which I predict will be backing you in the next council election- is already distancing itself from it’s legacy.
July 14th, 2009 at 11:33 am
Sounds like marty is a bitter boy about the A’s not comming to Fremont. Stop crying about the stupid ballpark. This was just a ploy so Lew Wolfe can move the team. He was never going to move the team hear otherwise he wold have stayed with the pacific commons sight.
July 14th, 2009 at 3:10 pm
Marty,
We all understand that you were backing the A’s Stadium in Fremont.
Well it is not going to happen, move on!
I think that Toyota was very concerned about the baseball stadium locating next to them, but where they were really suprised/upset was our politicians ignoring Toyota and pushing the ballpark. That is the facts.
July 14th, 2009 at 5:22 pm
Freemont ineptitude chased A’s out of town. Not FCN. FCN and residents simply began to fill the information void with publically available facts. . . . . a void that most certainly could have been filled more assertively (see current S.J. efforts) if there had been a proactive attempt to AGRESSIVELY work with and involve the various stake holders.
I actually think the timing of elections killed this thing as much as anything. If not for the “around the corner” elections – I’m guessing our leaders would have been much more aggressive at bringing the various stakeholders together early on to potentially work out and mitigate problems like parking . . . .which was painfully obvious – so why didn’t we work to solve these issues early on ?? why didn’t we bring Lowes and Costco and others to the table early on – - for me, the answer (speculatively) was because the elections were right around the corner. . . . we didn’t want the stadium to become a major rallying point that potentially wakes the relatively dead Fremont voters . . .. . . THAT certainly could have been a real disaster, right Vinnie ?
July 14th, 2009 at 7:30 pm
I think the timing with the Warm Springs site being announced after the election pissed a lot of people off. But prospects are exponentially worse for Fremont today than they were in November. If Toyota announces they’re out, the hole is dug deeper.
If that turns out to be the case, a narrative can be strung that the city government was trying diligently to boost the city economy with the A’s deal, but a “mob” of NIMBY’s facilitated by the FCN now represented by Vinnie Bacon chased Wolff out of town, and look at us now with a gazillion square foot ghost factory and no prospects for developing Auto Mall or the NUMMI lot.
I’m not saying I wholly agree with that story – it’s more complex than that – but this is politics. Perhaps I’m reading too much into Vinnie’s brush off of FCN involvement, but I’m getting the feeling he knows this risk.
[BTW, this is just my opinion, so make an attempt at not flipping out. I am ambivalent about the A's in Fremont and don't think Vinnie is a bad person, mmmkay?]
July 14th, 2009 at 10:45 pm
Marty -
Associating the loss of the stadium to a corresponding loss of economic benefit to Fremont flies in the face of all independant data. Economic advantages to stadium communities appears to be a figment of the imagination of those owning these developments.
You are correct, if NUMMI bails – Fremont will be in worse shape than if NUMMI stays. The A’s/NUMMI have no connection with one another.
The hypothetical narrative that you suggest would IMHO be very damaging to the reputations of city government if true since any attempt to boost the city economy with a stadium deal would fly in the face of all independant common sense and data. To believe that one could aid the local economy with a stadium, one would also have to disbelieve myriad publically available data. Which, if true, makes Vinnie a bit of a local hero. . .
I’m not saying I wholly agree with this story – it is, as you say, a bit more complex BUT – this IS politics.
mmmkay.
July 15th, 2009 at 6:48 am
What I meant by “this is politics” is that most voters dont read studies on the economic impact of stadiums. They find someone to blame.
July 15th, 2009 at 9:57 am
Well, we can all get our undies out of a bunch, because if NUMMI closes it won’t be that big a deal – Mayor Bob says so.
“I wouldn’t say that NUMMI has had a huge impact in terms of our local economy”, Fremont Mayor Bob Wasserman, from the front page of today’s Argus.
See, we thought NUMMI closing would be a BAD thing. We’ll all be fine. The article (authored by Matt) goes on to say that maybe even a major league baseball stadium could go in at the site.
Deja vu all over again.
July 15th, 2009 at 12:12 pm
F.L. is right in more ways than one – - – Deja vu, indeed -
Bob W says in the referenced article “I wouldn’t say that NUMMI has had a huge impact in terms of our local economy.” and in the sme article another Bob W is quoted as saying that the closing of NUMMI would be “…a disaster…”
I’m certain that someone much brighter than I will help the rest of us make sense of these two very disparate assessments of the same important matter.
Hey Marty whatdya think – maybe voters aren’t the only ones that dont study the economic impact reports (?)
July 16th, 2009 at 12:36 pm
Yes, politics is full of people spinning history in whatever way suits their purpose. I think the good people of Fremont are smart enough to see through any such nonsense.
There’s another problem with the ‘FCN drove the A’s out of Fremont’ argument. It was Wolff himself who dropped out. He’s a smart businessman. If he’d have felt it was viable, he would’ve continued on. He’s probably taken on groups a lot stronger than FCN.
If the ballpark were now a go, Wolff would have had to come up with $400-500 million to start building the stadium. He would also have had to raise the capital to start building the retail space, and build at least a few hundred homes to get started. His return on his investment would be from filling the retail space and selling the homes. I don’t know about you, but I’m certainly glad I’m not in this position in this economy.
The City’s prospects would not have been any better. As you’ll recall, it was the sales tax from the project that was the main contributor to the City’s general fund (which pays for police and fire). Of course, sales taxes across the state are off across the board. Most likely, we would not have received enough to compensate for the cost of providing services to this area, increasing our budgetary problems.
July 16th, 2009 at 1:18 pm
I’ve been told that Newark gets 1% of the 9.75% in sales tax collected, and I can’t believe that Fremont does much better. As Vinnie said, with sales taxes off across the State, so how much would the General Fund really have received in sales tax? Not much, I it seems. Plus, those sales wouldn’t start until the facility was operational, and would only be generated when the facility was in use (on game days or when the stadium was used for other functions).
While FCN made a respectable effort, in the end it was the economy and large local businesses that put the kibosh on the deal. Lou didn’t get what he has by making bad bets.
July 16th, 2009 at 10:05 pm
Cities receive sales tax equal to 1% of the sale. Fremont gets exactly what Newark gets. Interesting, the tax is paid on sale, transmitted to the state which apportions it to the various agencies (cities, transit districts, etc.) In our county, the state sends the money to the county treasurer who divides it up and sends it to the cities. The county charges 5% for this service. For Fremont, that service charge is more than 1.5 million dollars. For Newark, it is about a half million. I’d probably be willing to do it for 1%.