Toyota Provides Millions for NUMMI Transition Support
NEW YORK — Though its decision to shut down the New United Motor Manufacturing Inc. vehicle plant in Freemont, Calif., has raised concerns among some state leaders, Toyota is offering transition support to workers in the form of $250 million to provide bonuses for the plant's salaried and hourly team members who continue to build vehicles until the plant closes.
Officials emphasized that this funding is subject to NUMMI's ongoing negotiations with the United Workers' ongoing negotiations with respect to hourly employees represented by UAW.
"Although NUMMI is an independent company, Toyota has made a significant financial commitment to help ensure that production continues as smoothly as possible and that team members receive transition support," stated Jim Wiseman, group vice president, Toyota Motor North America.
"We hope that NUMMI and the United Auto Workers will reach an agreement soon so that NUMMI's UAW team members can benefit from the transition support that we have committed to funding," Wiseman continued.
Offering of timeline outlining the history of the plant — which opened in 1984 as an independent 50-50 joint venture of Toyota and General Motors — officials noted that the purpose of NUMMI was to build vehicles on contract for both automakers.
Then, GM announced in May that it would no longer produce the Pontiac Vibe at the plant, eventually cutting off production in August.
And under GM's bankruptcy organization in June, the automaker's 50-percent share of the plant was left as an asset to be liquidated.
"GM's actions compelled Toyota to conduct an extensive review of its contracted manufacturing relationship with NUMMI as well as its capacity and production needs in light of current and anticipated market conditions," Toyota officials explained.
"Based on this careful and thorough review, Toyota determined that continuing contract manufacturing with NUMMI is not economically feasible, which resulted in Toyota's decision in August 2009 to end its production contract with NUMMI on April 1, 2010," they added.
Continuing on, Wiseman, on behalf of Toyota, offered thanks to "all federal, state and local efforts to help NUMMI team members, who have shown great dedication over many years."
Wiseman added that "Toyota's decision to end its production contract with NUMMI as of April 1 was difficult but necessary … Looking ahead, Toyota remains strongly committed to maintaining a substantial manufacturing presence in the U.S. and will continue to employ thousands of people in California."
Toyota argues that keeping the plant open for another seven months after August 2009 allowed NUMMI to continue employing team members and offer career counseling, among other services, to aid employees in their planning and transition.
There are also plans for Toyota to utilize some of the NUMMI suppliers at its wholly owned U.S. plants, something the automaker suggests "will further mitigate the economic impact of this closure."