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The High Cost of Closing Down the NUMMI Auto Plant

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].

Toyota’s Plan To Close NUMMI Would Kill Jobs, Destroy Communities

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.