UAW boss challenges Toyota plant closing

January 14, 2010

Howes: UAW boss challenges Toyota plant closing


When I stopped Ron Gettelfinger on the auto show floor this week, I figured the union president might gush about Ford Motor Co.’s award sweep or the fact that General Motors Co. is showing signs of sustainable life.

But no. The president of the United Auto Workers wanted to talk about Toyota Motor Corp.’s decision to close a plant in Fremont, Calif., and its plans to move production to sites in Texas, Ontario, Japan and probably Mississippi — all of them nonunion plants expected to build the Tacoma pickups and Corolla cars no longer to come from the West Coast.

"That state’s been good to Toyota," Gettelfinger told me. Next week, he added, the union would be working the sidelines of the North American International Auto Show to collect signatures for petitions urging the Japanese automaker to reverse its decision on the Fremont plant.

Then he reached into his jacket pocket to retrieve a four-page memo headlined "The Strategic Importance of the Toyota NUMMI Plant to California." It reiterates the all-too-familiar litany of economic woes that come with the prospective closing of an auto assembly plant:

Some 4,500 jobs would be lost, despite a record of industry-leading quality and productivity at the plant; $300 million in annual wages and purchasing power would disappear from the California economy, desperate as it is for whatever economic activity it can get; thousands more jobs would be threatened.

"Abandoning the facility reflects Toyota’s short-term corporate interests at the expense of its workers, middle class jobs and the economic recovery of the state," Gettelfinger’s memo said. "Closing the plant today would be another shortsighted negative decision in a string of bad management decisions by Toyota. …"

Not exactly. Unmentioned is the precipitating factor for Toyota’s move, which would be the first impending plant closing in the company’s 73-year history. The simple fact is that it probably wouldn’t have come to this had the Japanese automaker’s partner in the venture not used bankruptcy to unilaterally exit the deal.

That would be GM, whose reorganization plan labeled the nearly 27-year-old New United Motor Manufacturing Inc. joint venture a "bad asset" it did not intend to carry into the new GM that began life last July 8. By summarily bailing and killing the models produced there, GM effectively doubled Toyota’s fixed costs in Fremont even as it sliced into precious revenue.

"This isn’t a Toyota issue," said Irv Miller, a spokesman for Toyota in Torrance, Calif. "It’s a General Motors issue. He doesn’t need to be looking to Southern California for reasons why NUMMI is closing. He needs to be looking to GM’s RenCen."

Except that the RenCen has spoken, a bankruptcy judge has spoken and so has just about anyone else who could affect the outcome. Count NUMMI’s work force, and one of the last vestiges of anything approaching major manufacturing in the Golden State, among the casualties of the unraveling of Detroit.

Gettelfinger’s right: California, the nation’s largest car market, has been good to Toyota. Last year it claimed 24.2 percent of the state’s market, more than GM and Ford combined, effectively making Toyota the hometown company. Its iconic Prius is the preferred environmental vanity play in Hollywood.

But this is true, too: Supplying Fremont was a logistical challenge, with engines (to name one example) shipped over the Rockies from a plant in West Virginia. The Fremont site is older, the work force is older and, yes, it’s represented by the UAW.

No one at Toyota would say so publicly, but Old GM did the stumbling Japanese automaker a favor in bolting NUMMI. The move gave Toyota the cover to consolidate production into newer facilities it controls from top to bottom.

Gettelfinger’s also right that Toyota expanded its manufacturing footprint too quickly, presumably on the assumption that its voracious consumption of U.S. market share would continue, that Americans would love Toyota’s trucks as much as its cars, that Detroit would collapse with no hope of revival.

Every one of those assumptions is proving to be wrong — like so many others that proclaimed the invincibility of the Japanese juggernaut.

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