Workers Crushed by Toyota
California has been very, very good to Toyota. It is one of the largest markets in the world for the popular Prius hybrid. Nearly 18 percent of all Toyotas sold in the U.S. are sold in California. The state has showered the company with benefits, including large-scale infrastructure improvements for its operations and millions of dollars for worker training. California is one of the key reasons that Toyota is the wealthiest carmaker on the planet.
Toyota is paying the state back with the foulest form of ingratitude.
The company is planning to shut down the assembly plant in Fremont, Calif., that makes Corollas and the Tacoma compact pickup. The plant closure will throw 4,700 experienced, highly skilled and dedicated employees onto the street during the worst job market since the Depression, and it will jeopardize nearly 20,000 other jobs around the state.
It is a cold and irresponsible act on Toyota’s part, a decision that was not necessary from a business standpoint and that completely disregards the wave of human misery it is setting in motion.
The New United Motor Manufacturing Inc. plant (generally referred to as NUMMI) began as a joint venture between Toyota and General Motors in 1984. G.M. abandoned the venture when it collapsed into bankruptcy proceedings last year. Toyota declared that the plant was no longer viable because of the absence of G.M. and announced that it would close at the end of this month.
What has not been made clear to the public is that for many years the plant has been used primarily to produce vehicles for Toyota, not General Motors. A report prepared for a state commission that has been seeking to avert the plant closure noted that “G.M. accounted for only 10 percent of the plant’s production last year and an average of 15.4 percent between 2001 and 2009.”
In fact, from Jan. 1 to Feb. 27 this year, with G.M. gone, Toyota produced 61,000 sparkling new vehicles at the plant. That was more than double the 27,000 that were produced in the same period in 2009, when G.M. was part of the operation.
The report, written by Harley Shaiken, a labor professor at the University of California, Berkeley, noted that “Toyota could easily fill its production lines at NUMMI by building a higher percentage of the Corollas it sells in the U.S.,” or by adding a new model to the plant — a hybrid, for example.
What we’re dealing with here is the kind of corporate treachery toward workers and their local communities that has ruined countless lives over the past several decades and completely undermined the long-term prospects of the economy.
The NUMMI plant is a heck of a lot more viable than the nonstop dissembling of top Toyota executives. The company could keep the plant open and profitable if it wanted to. But, instead, it has decided to shift the production of these vehicles to Japan, Canada, Mexico and Texas.
The scale of the ingratitude is breathtaking. The U.S. is the largest market for Toyota vehicles in the world, larger even than Japan. The Corolla, one of the vehicles produced at NUMMI, is the best-selling car of all time.
Beyond sales, Toyota has reaped endless benefits not just from California, but from the U.S. government and other states as well.
The federal cash-for-clunkers program, for example, was a bonanza for Toyota. As Professor Shaiken’s report put it: “The automaker ranked first in ‘Cash for Clunkers’ sales in summer 2009, a stimulus effort that allocated $3 billion in incentives to trade in older models for newer, more fuel-efficient ones. The Corolla proved the most popular model.”
Among the infrastructure investments made by California on behalf of the NUMMI plant was the dredging of the Port of Oakland 12 years ago at a cost of $410 million. That was done to accommodate the types of cargo ships required by the plant.
It will be a crushing economic blow if Toyota, as planned, high-tails it out of Fremont. Like the rest of the nation, California is struggling with the worst employment crisis since the 1930s. The NUMMI plant closure would be the single biggest layoff in the state since the start of the Great Recession in December 2007.
Those who are trumpeting the alleged fact that the recession is over should consider that the unemployment rate in California in January (the last month for which complete statistics are available) was a mind-numbing 12.5 percent. That was the fifth worst in the nation. In eight California counties, the jobless rate — not the underemployment rate, mind you, but the official jobless rate — was higher than 20 percent. Those counties are suffering through a depression.
The human toll behind such data is of no apparent interest to the fabulously wealthy Toyota operation.