“Last night, the Toyota Board, acting in Japan, ordered that Toyota stop purchasing new vehicles from its subsidiary, New United Motor Manufacturing, Inc., (NUMMI), as of March 31, 2010. 

I’m profoundly disappointed. This will likely result in the closure of the NUMMI plant and the loss of 4,500 direct jobs and more than 35,000 indirect jobs in California. This is a devastating blow.

NUMMI will be the first ever plant shut down by Toyota in North America – and this comes despite the success of ‘Cash for Clunkers’ program, which sold more Corollas than any other vehicle.

Toyota informs my staff this decision was necessitated because General Motors (GM) walked away from NUMMI during the bankruptcy proceeding, leaving NUMMI with reduced demand for its products, 20 percent of which were sold to GM in recent years.  GM members resigned from NUMMI board, leaving Toyota operating a facility at less than full capacity with no demand to justify Toyota’s expanded production. 

Since I learned about the possibility of Toyota’s withdrawal from NUMMI, I tried to be helpful in a number of ways. I spoke to Mr. Yoshimi Inaba, President of Toyota Motor America, on several occasions and indicated my willingness to work with the company to find solutions to keep the plant in operation.  I also wrote to Mr. Akio Toyoda, the new CEO of Toyota Corporation and a former NUMMI manager, offering to help in any way I could. 

The last time I spoke with Mr. Inaba, he pointed out the major problems they faced: the company had lost money, and there was not enough work to keep the plant open after GM pulled out of the joint venture following the cancelation of the Pontiac Vibe, which carried one shift. The plant was aging and it couldn’t compete with Toyota’s two other plants in the South. Finally, the cost of operations was extremely high in California.

I spoke to Governor Arnold Schwarzenegger about this, as well as local and State officials, who put together a proposal in an effort to help Toyota keep NUMMI operational. The package included tax breaks, the ability to buy cheaper electricity, waive sales taxes on $20 million a year in plant machinery upgrades and an array of efforts to improve highway and rail access, including $20 million in state help to improve shipping facilities at NUMMI.

Yet as the days went on, the officials at Toyota grew more remote and less transparent. My calls were not returned, which gave me the distinct idea and view that they were going to withdraw from the venture – which was confirmed with today’s news.

I very much regret this. I had enormous pride in the company. I watched it grow and develop.

My personal history with NUMMI dates back to 1981, when the 49ers won their first championship at Super Bowl XVI in Detroit’s Pontiac Silver Dome. During a reception, I happened to meet Roger Smith, then-Chairman and CEO of GM. Upon our introduction, he told me: ‘you have the least productive GM plant in your backyard, and I’m going to shut it down.’ He did, and more than 5,000 workers hit the bricks. I never forgot that.

Shortly after that, the NUMMI joint venture between Toyota and GM evolved, and a contract with the United Auto Workers (UAW) was written.

At NUMMI, Toyota changed the way cars were made in the United States.  Just in time inventory was put in place, robotics were put in, quality circles were developed. The Union head told the Washington Post, ‘The Japanese treat you as a professional car builder. They respect your intelligence, and that makes you want to do a better job.’  The production became a modern example of what mechanical manufacturing was all about.

In the late 1980s, when I was President of the Japan Society, I met Tatsuro Toyoda, who was then running the plant. As I noted in a 1987 opinion piece in the San Francisco Business Times, the NUMMI plant was producing a car every minute. Grievances dropped from many hundred to maybe 10. Absenteeism dropped from 26 percent on some days to about 2 percent.

According to Mr. Toyoda before his return to Japan, the NUMMI plant was producing in quality and efficiency equal to any Toyota plant in Japan. This was a source of great pride to me and to the community. I took two visiting mayors to visit the plant, the Mayor of Cork, Ireland, and the Mayor of Shanghai, China. Since then, the facility continued to produce great vehicles with great quality.

So, the closing of the NUMMI plant is a great loss to me, the workers, and to the State of California.

I would hope that this facility, which is very large, can be put in some new form of manufacturing and I would hope that Toyota would be helpful in that endeavor.  My staff has already met with the Obama Administration’s Auto Communities Task force, and we will work to be as supportive as we can be at the Federal level.”

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