Toyota is pulling out of a California factory joint venture it had previously run with General Motors (GM) — the first-ever time the Japanese automaker is closing a major auto assembly plant.
Toyota Motor Corp said yesterday it would stop production at its Fremont, California-based New United Motor Manufacturing Inc (NUMMI) next March and will move production to its other plants in the US, Canada and Japan.
Production of the Corolla subcompact will be moved to its Cambridge, Canada plant, as well as Japan, and Tacoma pickups will be produced at its plant in San Antonio, Texas, it said in a statement.
PHOTO: AP
The decision had been widely expected after GM said in May that it was withdrawing from the 50-50 joint venture.
But hopes had been great in California that the historic joint venture launched in 1984 between two major US and Japanese automakers could stay open.
The plant, which employs about 4,600 workers, will be closed unless another company steps in to keep it going.
Executive vice president Atsushi Niimi said Toyota studied other options but couldn’t keep NUMMI open.
“It just would not be economically viable to continue the production contract with NUMMI. This is most unfortunate, and we deeply regret having to take this action,” he said.
He said Toyota carefully considered support offers from the California state government, but they weren’t enough to make it a sound business decision without GM.
He also said Toyota hoped to move Corolla production back to North America from Japan “as soon as possible.”
California Governor Arnold Schwarzenegger promised to work with the US and Japanese governments, GM and Toyota to support those who lose their jobs and to change the site toward other uses.
The California Labor Federation, which groups the state’s unions, criticized Toyota’s decision as aggravating the slowdown and hurting workers in the state, and urged the company to reconsider.
Executive secretary-treasurer Art Pulaski said: “It’s appalling that the company plans to abandon its workers, the community and commitment to the environment now.”
UAW president Ron Gettelfinger also criticized the decision. He said Toyota had benefited from the US government Cash for Clunkers program, which offered buyers rebates to trade a gas-guzzler for a new car.
“They deserve better than to be abandoned by this company, which has profited so richly from their labor, their productivity and their commitment to quality,” Gettelfinger said of the workers.
Hit hard by the global auto slump, Toyota has been struggling to achieve a turnaround. It racked up its worst loss ever of ¥436.9 billion (US$4.6 billion) for the fiscal year ended March 31, and is expecting more red ink for the fiscal year through next March.
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