Toyota denies story, says Fremont exit undecided

Toyota denies story, says Fremont exit undecided

Tuesday, August 18, 2009

(08-17) 19:12 PDT — A Japanese newspaper has reported that Toyota Corp. will quit making cars in Fremont as of March, but the president of New United Motor Manufacturing Inc. said Monday that no decision has been reached.

Rumors have been swirling around the Fremont factory since June, when General Motors quit its 25-year joint venture with Toyota to build cars at Nummi.

A story posted over the weekend on the Web site of Japan’s Asahi Shimbun newspaper cited an unnamed source as saying the company will transfer production of the Corollas now built in Fremont to a plant in Ontario and move Tacoma manufacturing to a truck factory in San Antonio.

A Toyota spokesman said Monday that the company has not yet made a decision or set a deadline for making up its mind.

As Nummi’s 4,500 workers filed into the factory Monday, they were handed a bulletin from plant President Kunihiko Ogura seeking to reassure them that Toyota has not decided to close the plant and promising "new information when it is available."

David Cole, with the Center for Automotive Research in Michigan, said the Japanese report seemed plausible because Toyota has too much manufacturing capacity and the Canadian and Texas plants were the logical places to take over the work now done in Fremont.

Nummi is the only factory where Toyota builds cars in North America that is represented by the United Auto Workers, Cole said. "That’s a sensitive issue for Toyota."

The contract governing Nummi workers had been set to expire Friday, but Sergio Santos, president of UAW Local 2244, said the agreement has been extended indefinitely with a provision that allows either side to cancel it with five days’ notice.

Industry observers have said that winning concessions on that UAW contract would have to be part of any deal to keep the factory open, but Santos said Nummi’s production costs were comparable to those of other Toyota plants.

"I don’t think it’s a labor cost issue," he said.

In addition to its direct employment, Nummi is estimated to support another 35,000 jobs in component manufacturing, shipping and other services. California officials working on an incentive package to keep Toyota in Fremont refused to throw in the towel Monday.

"This is just part of the ongoing speculation," said Bruce Kern, director of the East Bay Economic Development Alliance, which is coordinating efforts to save Nummi.

The Japanese plant closure report said Toyota had begun to notify its main suppliers about ending production in Fremont.

Mike Skinner is the manager of Vuteq, a Hayward factory that makes automotive glass for Nummi and is a division of a Japanese company that makes similar products for Toyota around the world. Skinner said he has orders through early November but no word of what happens after that.

"We’ve heard nothing. Even our headquarters in Japan knows nothing," said Skinner, who oversees 75 people whose jobs depend on Nummi. "We’re all in the dark."

E-mail Tom Abate at tabate@sfchronicle.com.

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