Twenty-five thousand jobs and $2.3 billion dollars. That’s what California stands to lose if Toyota follows through with its plan to shut down the New United Motor Manufacturing, Inc. (NUMMI), plant in Fremont at the end of the month, according to a study released today by a Blue Ribbon Commission. The Commission, appointed by State Treasurer Bill Lockyer, was tasked with assessing the economic, social, and environmental costs of Toyota’s planned closure of the state’s only auto assembly plant.

UC Berkeley Professor Harley Shaiken, chair of the Blue Ribbon Commission:

NUMMI is in the heart of Toyota’s most important U.S. market, NUMMI has Toyota’s most skilled and experienced workforce in the country – one that has consistently won industry acclaim for quality – and California is at the cutting edge of both technological innovation and the green future the company wants to lead. NUMMI and its highly experienced and skilled workers should be valued by Toyota as a key asset for the company as it struggles to reestablish its reputation for quality and green innovation.

The Commission’s report validates what we already know — there are no good reasons for closing NUMMI and many good ones for keeping it open.  

The report found:

§ Even during the recent downturn in auto sales, Toyota’s share of the U.S. market continued to expand. Toyota could easily operate all of its U.S. plants — including NUMMI — at full capacity and still not meet the demands of the U.S. market.

§ NUMMI’s closure would deepen the recession in areas that are already among the hardest hit. Unemployment in the state is 12.4 percent and in Fremont is nearly four points higher.

§ More than 20,000 jobs would be permanently lost according to the University of the Pacific forecast for 2010-2014. Many of these jobs are high quality, well-paying jobs.

§ States and localities will lose nearly a billion dollars of tax revenue needed to fund vital services in the ten years after the plant closes.

§ Workers and their families will suffer not only economically but physically as well, according to new research, which shows that plant closings significantly increase the incidence of heart attacks and strokes by 50-100 percent among older workers like the long-time workforce at NUMMI.

§ Californians buy more Toyotas than anywhere else, and by closing the NUMMI plant, Toyota is drastically increasing the distance that the vehicles must be transported to reach the California dealerships, which will lead to more pollution and result in greater degradation of the environment

If Toyota takes the Commission’s advice and uses NUMMI as the center for developing the eco-friendly California Corolla, it has the potential to lead the auto industry in the development of electric and plug-in technologies. But by leaving California behind, Toyota would also be leaving behind the state that is leading the nation in the development of those green technologies. And by abandoning its workers, the automaker is only drawing even more negative attention to Toyota’s blatant disregard for the well being of those individuals that keep them in business.

As the company seeks to rebuild its commitment to the “Toyota Way,” it needs to seriously reevaluate its recent management decisions. The report concludes

The most immediate, direct, and cost effective jobs program available is to keep NUMMI running. The automaker and California would reap a triple bottom-line benefit: Toyota would restore its image and retain a world-class plant; workers and their families would make it through a dark economic winter; and California would get further down the road to economic growth and a green future.

Rebecca Greenberg is communications organizer at the California Labor Federation Email her at [email protected].

For more than 25 years, thousands of workers in northern California have committed their lives to producing high-quality Toyotas at the Bay Area’s New United Motor Manufacturing Inc (NUMMI) auto plant, and hundreds of thousands of car-buying Californians have made Toyota the #1 car company in the state. So when Toyota announced last year that it plans to close down the NUMMI plant on April 1, 2010, the company dealt an undeserved punch in the gut to California’s workers and consumers, not to mention our state’s already faltering economy.

Toyota’s plan to close down NUMMI is the latest in a string of remarkably poor management decisions from the Japanese automaker, which is still in the hot seat after the recent rash of recalls of millions of Toyota vehicles worldwide. As the company struggles to regain consumer confidence, Toyota has absolutely nothing to gain by closing the plant, and both Toyota and California have just about everything to lose.

Closing the NUMMI plant is bad for:

California workers and their families. If Toyota has its way, more than 5,000 autoworkers at the plant will be out of work, and another 1,500 Teamsters who transport the cars from the NUMMI plant to the dealerships will also be jobless. Additionally, as many as 50,000 workers at hundreds of businesses in California are completely dependant on NUMMI to stay afloat, from the suppliers that manufacture car parts to the restaurants where the NUMMI workers go for lunch and even the shoe stores where the plant workers buy their specialized work boots.

Mari Alvarez, a mother of three, has worked at NUMMI for 9 years, and her husband worked there too, before he got injured. Mari said that if the plant closes

We just don’t know what we’re going to do. It’s not just an economic disaster, it’s a human tragedy.

The economy. There’s no doubt that the closure and subsequent layoffs would be devastating to our already faltering economy. California has already lost a million jobs since the beginning of the recession, and the proposed NUMMI closure would be the largest mass layoff in California since the recession began.  

Last week, State Treasurer Bill Lockyer introduced a new Blue Ribbon commission tapped to investigate just how dire the effects of the closure will be across California’s economy.

Lockyer explained:

Californians are deeply concerned about how the loss of this plant might affect their economy, their state and their lives, and it is the job of this Commission to help find the answers to those questions. It is a testament to the quality of leaders on this panel that they have been more than willing to take up this challenge

.

The commission — which includes representatives from labor, business, consumer, environmental, religious and political communities, as well as actor Danny Glover, who is a lifelong civil rights advocate — will be completing their investigation by Wednesday, and a delegation will travel to Japan shortly thereafter to present the commission’s findings to the Toyota executives.

The environment. Even though Californians buy more Toyotas than anywhere else, Toyota would rather increase their carbon footprint by shipping hundreds of thousands of cars to California from overseas, when they could be making them right here where they sell them.

In fact, if Toyota stuck by their promise to begin manufacturing the Prius (one of the most popular cars in northern California) and other hybrid vehicles at the NUMMI plant, instead of importing them, it would not only reduce greenhouse gas emissions, it would more than make up for the work lost when GM went bankrupt and was forced to discontinue manufacturing the Pontiac Vive. Toyota claims GM’s pull out was the primary reason for the decision to close NUMMI. In reality, GM production at NUMMI represented only 10% of 2008 production and less than 20% over the past five years.

Carl Pope, president of the Sierra Club, wrote in a letter to Toyota President Akio Toyoda:

California’s leadership in clean vehicles will drive up demand for the very best, and Toyota can show its commitment to the consumers in this state by bringing hybrid manufacturing to NUMMI.

Taxpayers. Toyota has the taxpayers to thank for dropping millions into the “cash for clunkers” program, which benefitted Toyota far more than any other car company. Toyota also received a variety of taxpayer-funded incentives and subsidies for training programs. And if the plant does close, the taxpayers will wind up footing the bill for the shutdown costs.

NUMMI is the last remaining auto plant on the West coast, and Toyota’s only unionized auto plant. NUMMI has consistently won top ratings from J.D. Powers for its outstanding commitment to efficiency, productivity and safety.  But if Toyota shutters the plant, tens of thousands of California workers will be left jobless, despite the fact that the company has never closed any of its other plants, nor have they ever laid off a single Japanese worker.

Toyota might think the NUMMI closure is a done deal, but we don’t. That’s why we’re supporting the UAW along with the AFL-CIO, Teamsters and dozens of other unions, environmentalists and community allies on a massive campaign at Toyota dealerships across the country to urge Toyota to make a U-turn and keep the NUMMI plant open.

Toyota’s plan to close the NUMMI auto plant in Fremont is an outright attack on union workers. And if they won’t employ our workers, then we won’t buy their cars. Sign the pledge today at http://bit.ly/4xYAif and vow not to buy any more Toyotas if the company shuts down the NUMMI plant.

Rebecca Greenberg is communications organizer at the California Labor Federation. Follow her on Twitter @CaliforniaLabor.

The last major auto plant in California has closed today.  NUMMI, a joint project between GM and Toyota, was eventually shifted entirely to Toyota when GM pulled out of the deal.  Toyota has decided that it does not need the plant on its own.

Toyota Motor Corp. has decided to close its auto plant in the Bay Area city of Fremont early next year, eliminating about 4,700 jobs and bringing large-scale automobile production in California to an end.

Executives of New United Motor Manufacturing Inc., the joint venture Toyota set up with General Motors Corp. in 1984 to operate the sprawling assembly plant, told its workforce this morning that the plant would shut down in March, according to a union member who attended the meeting. (LA Times 8/27/09)

Other than a few small auto parts plants and minor facilities, like Tesla’s new facility in the bay area, the auto industry has almost completely left California.  Now, we were never a huge auto manufacturing state relative to our size, but this is a landmark.  However, it is symbolic of our ailing manufacturing sector.

If California is to really recover from the last 3 boom-bust cycles, we are going to need to build a truly balanced economy. We can’t build it on real estate or computer programmers alone, we need it all.  And a key part of that is a vibrant manufacturing sector.

Now, some of this will come with the “green jobs” expansion, but green jobs alone probably won’t provide California enough of a manufacturing sector to really create a balanced economy. One would suppose that this is why politicians like John Garamendi were falling all over one another to get NUMMI to stay. They realize that this is a very real issue.

In order to create real meaningful manufacturing sector jobs, we’ll need to provide companies with what we have always done well here in California: providing a qualified and abundant workforce and a good infrastructure. However, with the recent budget cuts, we are growing increasingly in danger of falling behind in both areas.

The way to really build a solid manufacturing sector isn’t to engage in the race to the bottom that some states engage in, but rather to provide an excellent value with excellent resources. California can do that, but we can’t keep slashing and burning through our state government and expect to stay competitive.

John Garamendi has been seeking votes in California for well over 30 years.  He first took a run for the Governor’s mansion in 1982, and was set to do so again in 2010 until the seat in CA-10 opened up, and he was inspired to return to Washington, where he served in the Clinton Administration in the Department of the Interior.  He has the most diverse record of anybody in the race, with stints at the federal level, the state legislature, and in two statewide offices, as the Insurance Commissioner and now Lieutenant Governor.  In our interview, we discussed health care, lessons learned from regulating insurance, No Child Left Behind, saving the NUMMI plant in Fremont (more on that from Garamendi here), and foreign policy in Iran.  I found Garamendi to come at issues in a very comprehensive and thoughtful way, and you can see this for yourself below.  A paraphrased transcript follows. (flip it)

DD: Thanks for talking with me today.

John Garamendi: My pleasure.

DD: So how’s it going out there on the campaign trail?

JG: It’s going very well.  Every day, I feel we’re moving along well.  You have everything being done that is normally done in these campaigns.  We have a strong volunteer grassroots organization committed to getting out the vote.  Phonebanking has started, we’ve hit about 30-40 thousand homes.  We’re walking in different communities.  We just had a meeting in Rossmore, with 300 people turning out.  So I think it’s going very well.

DD: Your last several campaigns have been statewide, with district-level campaigning being more retail, how are you finding it?

JG: To me, it’s exactly the same, only it’s done in a smaller area.  I’ve always believed strongly in retail politics.  The only difference is that after the event’s over, I don’t have to get on a Southwest Airlines plane.  We did an African-American church out in Fairfield over the weekend, same as any African-American church in Southern California or anywhere else.  It’s just easier for travel.

DD: OK, let’s hit some issues.  First off, health care.  August is this time where everyone’s making their feelings known about health care in their districts.  What are you hearing in yours?

JG: I am hearing a strong element for single payer, or Medicare for All.  As you may know, I’ve led that debate in this state for many, many years.  I’ve always found it the most efficient, most cost-effective way you can possibly do this.  Just send your premiums to the Medicare office.

So I hear a lot of individuals trending in that direction.  And some of the unions, the California Nurses Association, are also trending in that direction.  There is also a concern about the complexity of the legislation moving through Congress.  And people want to see at the very least a public option to compete with the insurance companies.  Also, with a lot of seniors, the drug issues concern them, both with fixing some of the issues with Medicare Part D and also maintaining what they like about Medicare.  So that’s the range.

DD: Would you vote for any bill that didn’t have at the least a public option that’s available from day one, without a trigger?

JG: Well, I’ve always been a strong voice for Medicare for All.  The fallback position is the public option.  That’s already a compromise.  And so the legislation had to have a public option, I can’t go any further away from that.  The other thing I want to express is that I understand insurance reform, which is a lot of this bill.  I was the main regulator for insurance companies in the largest state in the union.  So I bring a set of knowledge to this debate that not only doesn’t exist among my competitors, but doesn’t exist in Congress.

DD: Let’s talk about that.  Right now, insurance companies are regulated in the states, and so the regulations vary from one place to the next, and can be corrupted by local interests.  Do you support a federal role in insurance regulation?

JG: This is something that we have to figure out with insurance reform and with respect to financial regulation.  The regulatory mechanisms need some clarity.  It simply won’t work to write a law saying to the insurance companies, “Take all comers.”  They will not do it.  So you need a police force.  Someone to enforce that law.  Will that be federal, or based where it is now, at the state level?  That’s the kind of detail that must be worked out.  I mean, we’ve had auto insurance here in California that’s supposed to take all comers, and they find numerous ways to avoid that.  And of course, this is why I support Medicare for All.  You don’t have to worry about any of that.  But as long as we’re going with health insurance reform, I can add something to that process.

DD: What are the pluses and minuses of putting this in the hands of the Feds?

JG: If it’s a federal process, you’d have to set up a massive new federal bureaucracy.  In the positive sense.  But you have to have a police force, because otherwise, the insurers won’t do it.  That’s a major, expensive undertaking for the federal government.  There’s an advantage to the existing mechanism in that it already exists, like with Medicare or Medicaid.  However, you mentioned some of the problems with how the regulation changes depending on the state.  So both options have shortcomings.  Either way, if we have a bill based on insurance reform, it has to be dealt with.  And I’ve been dealing with these companies for eight years of my life.  I know how to do this.

DD: Medicare for All will apparently get a vote now.  Is that helpful?

JG: It’s enormously helpful.  It got pushed to the side of the debate for too long.  Medicare provides about 60% of the care in dollar terms already in this country, and it’s very popular.  If you bring the rest of the population in, on a per-person basis, the cost would decline dramatically.  The money in the private system is good enough to get this done and cover everybody.  And the other important thing is that Medicare allows individual choice of provider.  Whatever doctor you like, you can keep them.  Of course, we know that private insurance restricts your choice of doctor.  So this is the big lie in this debate, the idea that Medicare would have government telling you what doctor to pick.  That’s what happens right now.

DD: Let’s move on.  I noticed on your website you took a lot of time talking about the need to rebuild manufacturing.  We’re seeing this cash for clunkers program becoming very successful as an economic stimulus for the auto industry.  Is that the kind of incentive-based programs that we can use to bring back manufacturing to America?

JG: Not exactly.  The auto industry is not central, but it is important.  That’s why I’m trying to save the NUMMI plant.  1,200 businesses are direct suppliers to NUMMI.  The auto supply industry is one of the largest in America.  So cash for clunkers will help NUMMI.  But what I’m talking about with respect to manufacturing is an economic theory that I developed in the 1980s.  Basically, I figured that you need certain things to maintain the ability to lead as an economic power.  You need a world-class education system and a commitment to research and development.  Through both of those, you can create new things, with a high profit margin, whatever those things are, but new innovations that people find valuable.  Eventually, those new things become a commodity, and once that happens, like all commodities, it seeks the lowest-wage place to be made.  So those things get pushed off, and you have to create more new things, to keep feeding that engine.  So that’s what I’m talking about, high-end manufacturing.

DD: Couldn’t the NUMMI plant be retooled to serve as a place to manufacture those new things, be they innovations in solar or wind technology or new batteries?

JG: Well, we tried this a few years back.  I endorsed a bill in the legislature to provide a specific exemption for sales tax on manufacturing equipment to retool the NUMMI plant for hybrid vehicles.  And that probably would have been enough to keep NUMMI open.  But it didn’t pass.  Right now, what we’re doing is putting together a package for NUMMI of incentives that will hopefully keep them in California.  But it’s more complex than that.  This is like a divorce.  You have GM and Toyota fighting over who owns what widget on the line.  So there are legal issues in play now.  I think we can get it done, because that’s a very efficient plant, one of the most efficient in the country.  But we have to manage this divorce.

DD: Education is another issue you talk about a lot.  The Department of Education just put out this Race to the Top program to offer money to the states with good outcomes, but they are restricting the funds to states which incorporate student testing into teacher evaluations, and because California doesn’t do that, they don’t qualify.  What are your thoughts on that, and this larger divide between education reformers and groups resisting their reforms?

JG: My question about it is basically, what is the equation between the test and teacher evaluations? Are we talking about just the test score? In that case, do I get to choose the students? Because the students and their backgrounds are a contributing factor to their performance. So it’s a complex equation. There’s a socioeconomic element to it. And it’s very difficult to do to take everything into account. I don’t think that testing should be the sole measure of a teacher evaluation. There are multiple factors. My daughter’s a kindergarten teacher, and this year she got to school and there were a lot more kids in her class. So is that a factor? I think we need to evaluate teachers, but we must be fair.

DD: Do you support a reform like paying teachers more to go into poor-performing inner city areas?

JG: I’ve always supported reforms like that. I put up a bill in the 1980s to pay more to math and science teachers, to make sure we were attracting the best of them. And I support sending good teachers into the inner city. We have to pay our teachers better if we want to get the best outcomes.

DD: We are having such a tough time in California, what can the federal government do to alleviate some of the burden here where we are destroying our social safety net during a deep recession?

JG: Well, just to go back to education, one thing the federal government can do is fix No Child Left Behind. It was a great concept, but not good in detail. The reauthorization is coming up, and the Feds had better fund it. You can’t place a burden like that on the states and expect them to deliver. So funding, and some reform of the law, has to get done. I don’t think testing should be the only evaluation of students. There’s a place for it, but we’re building a nation of robots by teaching to the test. I have significant concerns about No Child Left Behind that need to be addressed.

DD: What about beyond that. Would you support a second stimulus focused on the states?

JG: I don’t know whether there will be a second stimulus. But the problem is pretty elemental. California is the 7th, 8th-wealthiest place on Earth. We have made a decision, and it was a decision, not to invest in education. We have plenty of money to fund it, but we made the decision not to. The leadership has refused to use that wealth in the greatest resource we have, and that’s our education system. It’s clear to me that the federal government cannot substitute for the effort that California must make for themselves. We need investment, coupled with serious reform, to break the gridlock. Voting to tax students by raising college rates is just insanity. And the regents and trustees refused to support legislation for an oil severance tax to fund higher education. I brought it to them, and they wouldn’t support it. We are the only oil producing state with no tax on the natural resources coming out of our ground. The oil companies have been able to take it for free for over a century. It’s madness.

So the federal government cannot substitute for California. But I’ll fight to bring money back to the state. First by funding No Child Left Behind. And also, there’s the issue of medical services. The formula for state participation in Medicaid in California is 50-50, an even split between the Feds and the state. In other big states, that ratio is different. In Illinois, New York, it’s more like 60-40, 70-30. Getting a better split in that formula represents a huge amount of money for California. And there are numerous formulas like that. So experience counts in understanding all that.

DD: OK, final question. On your website, I noticed very strong language supporting Israel, and also warning Iran not to continue with their alleged nuclear program. And you advocate for stopping shipments of refined oil to Iran if they refuse to cooperate. Now, I’m assuming that was written before the most recent uprising.

JG: It was, yes.

DD: Do you still believe, given the events over there, that it’s a good idea to stop refined oil shipments, when it may hurt not the regime, but the very people in the streets who are resisting it?

JG: There’s no doubt that the effect of an embargo would hit the economy and the people. That’s what it’s designed to do. I’ve thought long and hard about this, after watching the events take place, and I still believe in the concept. What you have over there is the current government’s legitimacy being questioned. Does that mean they are more willing to negotiate on the nuclear program, to bring something tangible to the people? We don’t know. So I think you have to pull together the interested groups, and that’s Europe, and Russia, Pakistan, the Arab states, they might be more interested than us. And you create a larger coalition to change the behavior of the government. The uprising actually helps in that regard. And like in any negotiation, you have to have a big stick. So I would not drop the embargo possibility. And again, all of this is down the road a piece. Now another big stick would be bombing their facilities, and I think there are some unadvisable consequences to that. So I’d rather use the other stick.

DD: Thanks so much for talking to me today.

JG: Thank you.