The United Auto Workers union (UAW) has reached a tentative agreement with Toyota Motors (TM) to shut down the New United Motor Manufacturing Inc. (NUMMI) plant in Fremont, California.
The agreement, which includes payouts for workers, is subject to a ratification vote by the plant’s workers, which is likely to take place later this week. The plant is scheduled to close on April 1.
Earlier this month, Toyota agreed to spend $250 million to fund transitional support for plant workers. As many as 5,400 direct jobs will be affected by the closure, including 4,550 hourly UAW workers. According to the East Bay Economic Development Alliance, the NUMMI closure would also cost 30,000 indirect jobs.
NUMMI, opened by General Motors in 1962, was shut down in 1982 due to operational inefficiency. However, the plant was reopened two years later under a 50/50 joint venture between General Motors and Toyota.
NUMMI was a remarkable joint venture in Toyota’s as well as America’s history. The joint venture taught Americans all about the famous Japanese ‘lean manufacturing system’ (focused on just-in-time delivery) and Toyota stepped into U.S. using GM’s supply lines.
NUMMI produces Corolla and Tacoma for Toyota and Pontiac Vibe (Toyota’s version of the Vibe) for GM. However, GM had decided to pull out of NUMMI after completing its bankruptcy filing in June last year, as it will discontinue the Pontiac brand.
Toyota will stop production at NUMMI in this month and will shift production to its other plants in the U.S., Canada and Japan. Production of the Corolla subcompact will be moved to Cambridge, Ontario, as well as Japan, and Tacoma pickups will be produced in San Antonio, Texas.
Meanwhile, the Californian start-up electric vehicle company Aurica Motors has shown interest in acquiring the NUMMI plant. The company intends to retain the NUMMI workers and launch a new model in two years.
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