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Oracle of Delphi

Toyota says it may end NUMMI operations

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Lindsay Chappell

Automotive News

July 10, 2009 - 7:22 pm ET

Toyota Motor Corp. said Friday it might close its large California car and truck assembly operation, New United Motor Manufacturing Inc., now that General Motors has exited the 50-50 partnership.

“We are carefully evaluating our options with respect to the NUMMI joint venture as a result of General Motors’ actions,” Toyota said in a statement released Friday. “Under the current business circumstances, Toyota regrettably must also consider taking necessary steps to dissolve the joint venture.”

“We need to determine whether it can be economically feasible to contract with NUMMI without GM,” the statement reads.

One big problem, according to NUMMI itself: The plant is simply not competitive.

NUMMI itself released a separate statement late Friday acknowledging that it has become a problem for Toyota, due to high labor costs.

“Neither NUMMI’s labor costs nor business conditions are competitive, so we are working hard to improve them and make NUMMI more attractive to Toyota,” the statement said.

The Fremont, Calif., joint venture builds the Toyota Corolla, Pontiac Vibe and the Toyota Tacoma pickup. Launched in a closed GM factory in 1984 to share car production 50-50 between the global competitors, NUMMI is the only Toyota assembly plant in America whose workforce is represented by the UAW.

NUMMI’s hourly workers earn national UAW rates of about $28 an hour at a time that Toyota and other automakers have been opening new auto plants in Mississippi, Texas, Georgia and Tennessee where assembly workers start $15-$20 an hour.

Two years ago, Toyota said it intended to establish a new manufacturing center at NUMMI to make the plant more competitive. A spokesman for the plant said he was unaware of any such effort.

GM revealed its plan to abandon the NUMMI partnership recently as part of its sell-off of uncompetitive assets to emerge from bankruptcy. GM grouped its NUMMI investment with the “old GM,” the unprofitable portions of the company that remain in bankruptcy court.

The “New GM” -- the core profitable parts of the automaker -- emerged from 39 days of bankruptcy protection earlier Friday.

The NUMMI joint venture has been cited for 25 yeas as an example of harmonious auto-making between U.S. and Japanese cultures, and between union workers and Toyota’s flexible production rules.

“NUMMI has been a model of U.S.-Japan industry collaboration as long as 25 years, but GM's decision to abandon NUMMI and discontinue its production of the Pontiac Vibe have prompted a set of difficult and complex decisions for Toyota,” the Toyota statement said.

Link: http://www.autonews.com/apps/pbcs.dll/arti...273359873272487

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I dont blame them for not wanting to deal with unions, they've seen what the UAW has dont to the Big 3.

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This article put a big smile across my face.

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I knew it, Toyota prefers to cut and run rather than deal with US unions.

What company ever wants unions?

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They have been getting far s****ier lately... I remember back when I was a kid (when it was Price Club) and they actually had good deals. Now you go there and they have things on for the exact same or higher prices as a cheap grocery store or Walmart, plus you have to buy in large quantities. I really don't understand how they're still open - could just be people assuming they're getting a good deal 'because its Costco' instead of actually shopping.

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