Toyota sticks to closure of California plant despite union’s visit
by MAKIKO KITAMURA , Business Day
TOYOTA Motor, Japan’s biggest car maker, said yesterday it would not reverse a plan to close a California assembly plant next month even after executives met with a delegation from the state in Japan.
Toyota executive vice-president Atsushi Niimi and three other managers met United Auto Workers labour union vice-president Bob King and other California leaders at the company’s headquarters in Toyota City yesterday. The parties discussed the closure of the plant, known as Nummi, a joint venture with the former General Motors.
‘As announced in August, production at Nummi will cease on April 1,’ Toyota said. ‘It was a very difficult decision , but due to GM’s withdrawal, we could not foresee its mid- to long-term viability as a business.’
Closing New United Motor Manufacturing may lead to 25000 job losses in California, including positions at suppliers, and erase 1bn in revenue from state and local communities over 10 years, according to a study prepared by Harley Shaiken, a labour professor at the University of California at Berkeley.
The factory has 4700 employees, according to Toyota.
Company president Akio Toyoda confirmed on Monday in Tokyo the decision had not changed. The car maker said last week it would provide 250m for salaried and hourly workers who lose their jobs.
‘Securing a profit at the plant has been difficult as California has high labour costs,’ said Masatoshi Nishimoto, a Tokyo-based analyst at vehicle consulting company CSM Worldwide. ‘Toyota’s other US plants have also been struggling with excess capacity, so closing Nummi was unavoidable.’
The decision may hurt Toyota’s image, already battered by a global recall of more than 8-million cars to fix problems related to unintended acceleration, delegates said.
At least 25% of new cars bought in California are made by Toyota, Consumer Federation of California executive Richard Holober said.
Toyoda said on Monday Toyota incentives may help end a two- month slide in US sales this month.
‘At this point in time, a recovery seems possible,’ Toyoda said yesterday after meeting with Japanese Prime Minister Yukio Hatoyama. ‘We are working toward taking care of the recall and achieving a sales recovery simultaneously.’
Defending itself at US congressional hearings in Washington on Monday, Toyota said the result of a test of its electronic throttle-control system cited in testimony as possible evidence of a cause of unintended acceleration could not occur in everyday driving.
Toyota said David Gilbert, an associate professor of car technology at Illinois University, altered a circuit in the accelerator pedal he tested, making it unreasonable to draw conclusions about vehicles on the road. Bloomberg