Toyota closing plant in CA , 4700 out of work, could effect as many as 50,000 jobs!

Discussion in 'Wall St. News' started by S2007S, Aug 29, 2009.

  1. S2007S


    Everyone still hoping and wishing for the "V" shaped recovery.....

    Toyota closing Fremont Nummi plant

    Tom Abate, Chronicle Staff Writer

    Friday, August 28, 2009

    (08-27) 13:01 PDT FREMONT -- Toyota's decision to stop making cars in Fremont in March will idle 4,700 workers at the New United Motor Manufacturing Inc. factory and send a shudder of job losses through more than a thousand California companies that supply parts to the only automotive plant on the West Coast.

    The fate of the factory has been in question since June, when General Motors withdrew from the partnership with Toyota that created Nummi in 1984. Toyota on Thursday confirmed rumors that had been swirling for weeks that it will close the plant, regardless of financial incentives offered by the state.

    "Today is a sad day in the history of Fremont as California joins the ranks of states adversely affected by the bankruptcy of General Motors and the worldwide collapse in demand for automobiles," said Gov. Arnold Schwarzenegger, adding that the state will now focus on retraining workers and finding alternative uses for the roughly 5 million-square-foot plant.

    Nummi worker Ken Villegas said employees learned of the shutdown at a giant plant meeting.

    "I don't think anybody was very surprised," he said. "The news has all been bad for months, and we were getting plenty of signals this was coming."

    The East Bay Economic Development Alliance estimated the plant pays an average production wage of $65,000 and has a direct payroll of roughly $512 million a year. It also estimated that Nummi supports an additional 18,800 jobs at more than 1,100 supply firms throughout the state with an indirect payroll of $904 million.
    50,000 jobs may be hit

    Other sources have estimated the Nummi effect as even higher, from 30,000 to as many as 50,000 jobs.

    Richard Basurto, a 61-year-old delivery worker at Nummi whose wife is also employed at the factory, said it's not just income that is imperiled, but health benefits.

    "This is going to impact a lot of families," said Basurto, who considers himself comparatively lucky because he is close to retirement and has a pension. "There's a lot of younger families I really feel for."

    Word of the closure rippled through the network of Nummi suppliers.

    At Vuteq California Corp. in Hayward, which provides Nummi and another Toyota plant in Mexico with automotive glass and plastic parts, manager Mike "Doc" Skinner was considering how the shutdown would affect his operation and its roughly 70 workers.

    "Everything is under review and it isn't clear what happens next," Skinner said.

    Daren Fields, economic development director for the city of Fremont, said an official from Toyota's North American division said the company simply had too much capacity and could not afford to keep Nummi open, especially without GM as a partner.

    Fields said it is too soon to know what will happen to the roughly 300-acre site because Toyota and the old GM are still negotiating how to dissolve their partnership.

    "Nummi is like the child of divorced parents, and they're still fighting over the assets," Fields said.
    Toyota overbuilt

    David Cole, with the Center for Automotive Research in Michigan, said Toyota had overbuilt production just as the recession crippled sales. "The only way to get rid of capacity is to shut plants down," he said.

    Toyota issued a statement saying "we deeply regret having to take this action," but that it had decided to shift the production of Tacoma trucks now made at Nummi to a plant in San Antonio, and to assign the Fremont-built Corollas to plants in Japan and in Ontario, Canada.

    At the Fremont office of United Auto Workers Local 2244, which represents plant workers, volunteers continued to prepare for a previously planned Saturday rally in San Francisco.

    "This is my second closure," said Nummi employee Lynn Chess, 53, who worked for GM before it shut the plant in 1982 only to reopen it later with Toyota. "That building was there before," she said, waving at the huge factory across the road, "and I have a feeling it's going to continue building cars somehow."
  2. taipan77


    This is sad for all those families and because when you hear the news all I ever here is how good the economy is recovering and How a bailed out GS will hand out 37Billion in bonuses. (It's not that I'm mad they made money but they used tax payer money with ultra low rates to scam the system.) Anyways I still don't understand how everybody is saying all is well. I live in San Diego and by where I live they have all these vacant warehouses that used to have start ups and technology companies that had a lot of good paying jobs. The only thing I see on them now is for lease or for sale. We need to all wake up. We have problems and they need to be addressed and just creating bigger deficits will not fix it. If that was the case all countries would spend to create booming economies. What everybody is failing to realize is that you can't have GDP grow forever. Every once in a while it needs to drop and from there is where we get our new growth. Just like a forest that over grows and siphons all the resources till half of the forest dies. Then when a fire comes along and clears the brush and dead growth new shoots will come out and grow to sustain the forest. That is exactly how our economy works.
  3. First factory Toyota closes in 72 years.
  4. :( So sad that's where my Corolla came from. Like the energizer bunny 13 yrs, 180k and just keeps going. Better built than my much newer Camry IMO.
  5. So they're shifting Corolla production to Canada (sucks) and Japan (sweet)
  6. My Toyota is by far the best vehicle I have owned.

    GM was the worst.Ford better than GM but not much.

    GM started putting out garbage in the late 70's.
  7. There's only 210,000 people in Fremont. It's going to have a devastating effect on that town's economy.
  8. Sweet, thanks Toyota! Ontario is dieing without the manufacturing sector. Maybe once they get this they can stop sucking on Alberta's tit.