• Mar 3rd 2010 at 6:31PM
  • 16
The present Toyota recalls have been garnering a vast amount of media attention, but no one has forgotten about the automaker's earlier decision to end its production contract with California's New United Motor Manufacturing Inc. (NUMMI). Just recently, Toyota issued a press release stating it will commit $250 million to support the NUMMI plant closure that, as we reported earlier, will mean a direct loss of 5,400 jobs and up to 50,000 jobs at suppliers and other supporting businesses. Don't blame Toyota entirely, however, as the plant was originally established as a joint venture between General Motors and Toyota, but GM pulled out first during its time in bankruptcy last summer.

Toyota says its financial support will aid in providing bonuses to both salaried and hourly NUMMI employees at the plant. The funding, however, is still subject to current negotiations between the UAW and NUMMI. Jim Wiseman, Group Vice President of Toyota Motor North America issued this statement:
"Although NUMMI is an independent company, Toyota has made a significant financial commitment to help ensure that production continues as smoothly as possible and that team members receive transition support. We hope that NUMMI and the United Auto Workers will reach an agreement soon, so that NUMMI's UAW team members can benefit from the transition support that we have committed to funding."
NUMMI currently produces both the Corolla and Tacoma for Toyota. Earlier reports state that Corolla production will be moved to the automaker's Cambridge, Ontario factory, and the Tacoma will be shifted to Toyota's San Antonio, Texas facility. Toyota's production contract with NUMMI officially ends in just a few weeks on April 1st, which is no joke to the workers who won't be building the cars the next day. Follow the jump to read the official press release.

[Source: Toyota | Image: Justin Sullivan/Getty]
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Toyota Commits $250 Million to Support NUMMI Transition

Will Enable NUMMI to Fund Bonuses for Team Members Who Continue to Produce Toyota Vehicles through April 1

March 3, 2010 - New York, NY – Toyota Motor North America, Inc. (TMA) today announced that Toyota has committed $250 million to its contracted manufacturer New United Motor Manufacturing, Inc. (NUMMI) to fund transition support for NUMMI's salaried and hourly team members. Toyota's financial support is enabling NUMMI to offer bonuses to salaried and hourly team members who continue to produce quality vehicles for Toyota through April 1, 2010, when Toyota's production contract with NUMMI will end. This funding is subject to ongoing negotiations between NUMMI and the United Auto Workers with respect to those hourly team members represented by the union.

"Although NUMMI is an independent company, Toyota has made a significant financial commitment to help ensure that production continues as smoothly as possible and that team members receive transition support. We hope that NUMMI and the United Auto Workers will reach an agreement soon, so that NUMMI's UAW team members can benefit from the transition support that we have committed to funding," said Jim Wiseman, Group Vice President, Toyota Motor North America.

"Toyota appreciates all federal, state and local efforts to help NUMMI team members, who have shown great dedication over many years," said Mr. Wiseman. "The support we are providing to NUMMI underscores our commitment to do our part. It is unfortunate that neither GM – NUMMI's other 50 percent shareholder and customer for 25 years – nor Motors Liquidation Company, its current shareholder, has indicated that it will do the same, despite the fact that NUMMI team members have produced more than one million vehicles for GM."

Mr. Wiseman continued: "Toyota's decision to end its production contract with NUMMI as of April 1 was difficult but necessary, given GM's abandonment of NUMMI, which severely undermined the economic viability of the plant. Regrettably, our decision is final. Looking ahead, Toyota remains strongly committed to maintaining a substantial manufacturing presence in the U.S. and will continue to employ thousands of people in California."

Timeline of Recent NUMMI Events

NUMMI, based in Fremont, California, was established in 1984 as an independent, 50-50 joint venture of Toyota Motor Corporation (TMC) and General Motors to produce cars on contract for both companies. In May 2009, GM abruptly announced its decision to end its production contract for the Pontiac Vibe at NUMMI, and this production ceased on August 17, 2009. In June 2009, as part of GM's bankruptcy reorganization, GM's 50 percent share in NUMMI was left among the assets to be liquidated of the Motors Liquidation Company (or "old GM").

GM's actions compelled Toyota to conduct an extensive review of its contracted manufacturing relationship with NUMMI as well as its capacity and production needs in light of current and anticipated market conditions. Based on this careful and thorough review, Toyota determined that continuing contract manufacturing with NUMMI is not economically feasible, which resulted in Toyota's decision in August 2009 to end its production contract with NUMMI on April 1, 2010.

Toyota's Investment in NUMMI and America

Rather than halting production orders from NUMMI abruptly last August, Toyota made a significant commitment to take production for seven additional months, enabling NUMMI to provide continued employment to team members, as well as career counseling and other services to help with their planning and transition.

Toyota also expects to continue using some of NUMMI's suppliers to support Toyota's wholly-owned U.S. plants, which will further mitigate the economic impact of the closure.

Despite the end of its production contract with NUMMI, Toyota's operations in the U.S. remain substantial and include manufacturing facilities in Alabama, California, Indiana, Kentucky, Missouri, Tennessee, Texas and West Virginia. Toyota will continue to provide an uninterrupted supply of vehicles to dealers and customers in North America.

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    • 1 Second Ago
      • 5 Years Ago
      pulling out first, during DP typically means, the end result is not your fault...
      • 5 Years Ago

      So why exactly do these workers deserve $250 million ?

      $250 million / 5,400 workers = $46,300 per worker

      The extra unemployment benefits they are going to receive from the state of California isn't enough ?
      • 5 Years Ago
      At least they are not doing a cut and run like Gov't Motors. They left Toyota holding the bag while we gave them the money to bail on the workers. So the Gov't don't treat the union workers very well. I guess the union should wakeup to the fact that when it comes to Gov't Motors and dealing with Obama they will screw you too. At least Toyota has some class when it comes to it's workers. When the auto industry was slow last year Toyota didn't lay anyone off. The (Big 3) sure didn't do that for there unions.
      • 5 Years Ago
      Again, repeat after me:

      The proof is GM, Chrysler, the state of California and on and on and on.......
      • 5 Years Ago
      someone please correct me if i'm wrong.... but the "aid" they say they are giving sounds like it's simply severance pay for those about to get laid off. If that's correct, talk about a crazy spin job!
        • 5 Years Ago
        Lets look at it this way. "Live Better work Union". Next time you see that bumper sticker take a good hard look at the car its on. 70's clunker of course. Call it what you want a spin job severance or whatever. Toyota could have shut the doors on that place in a heartbeat and not thought twice about it. Thats not how they do business. They actaully have honor and respect for American Culture, even after those Congressional idiots tried to beat them down. GM walked away from NUMMI and even if they didn't you and I the taxpayer would be paying for it under this crappy regime. Think about that. I worked for a Union once, totally worthless. All they want is money to support themselves and their lifestyles. The government needs to get out of the car business right away. 40 cents of every dollar GM and Chrysler make goes to Obama and his worthless administration. Oh yeah cash for clunkers didn't benefit anybody. We all paid taxes on that 700 million to crush those cars and Give 2-4000 dollars for each one and we only managed to save about 5 milion barrels of oil on the MPG increase on sold cars. GM Chrysler and Ford...three car companies that dont believe in America so they send factories outside the US for cheap labor. Toyota on the other hand invests in American and Continues to. Toyota is more American than any of the Detroit Three. Suck on that.
      • 5 Years Ago
      Toyota is beginning to sink, it's just a matter of time now.
        • 5 Years Ago
        It's Payback time for Toyota (besides the recall "damages", etc)...and that's with a capital "P"!
        • 5 Years Ago
        Actually, this is good news for Toyota, at least as far as their bottom line goes. Switching even a small share of their production from union to non-union labor will save them a heap of money and headaches in coming years.

        That said, my heart goes out to the assembly-line guys at NUMMI. I lived near Hayward for a couple of years, and the last thing that neighborhood needs is another vacant plant and more people out of work.
      • 5 Years Ago
      Being a 20 yr union person I can safely say that if nummi had been non union, it would still be going strong.
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