Farewell, Toyota: Union Agrees to Settlement Over Factory Closing

Akito Yoshikane

A Toyota dealership in Torrance, Calif., on March 12, 2010.

About 90% of workers approve deal

The United Auto Workers and Toyota reached a tentative agreement late Monday to shut down the company’s only unionized factory in North America.

As part of the agreement, Toyota will pay $250 million to roughly 4,600 salaried and hourly employees at the New United Motor Manufacturing Inc. plant, aka NUMMI. The mass layoffs will be largest in California since the Great Recession started in December 2007.

The factory, located in Fremont, is the last auto manufacturing plant in California. Up to 20,000 jobs in the surrounding area will also be affected by the closure. It’s a move that couldnt have come at a worse time, as the surrounding communities grapple with the Great Recession and the state faces a massive budget crisis.

The decision was made after months of negotiation and protests to try and convince Toyota to continue operating. (The company announced the closure last August.) Earlier this month, several members of the state commission, including UAW, flew to Toyota headquarters in Japan with a letter requesting a meeting with Akio Toyoda, the company owner, in a last minute plea.

But workers reached an accord with Toyota this weekend. The San Francisco Chronicle reports the packages will vary by tenure and range between $21,175 to $70,000. ABC Local reports that workers will have to pay for their own healthcare and agree not to demonstrate against Toyota.

The Chronicle says the NUMMI workers will have extended unemployment benefits. The employees who work in supply firms related to the NUMMI plant are waiting on a federal decision to see if they can qualify for the Trade Adjustment Assistance program.

Union members are expected to vote today (Wednesday) to ratify the agreement, though it looks like there was some grumbling leading up to the decision. Some union members expressed disappointment with the lack of transparency during the negotiations. The Chronicle reports that some UAW members wondered why their union did not target General Motors.

Workers in Fremont manufactured the Tacoma pickup truck and the Corolla compact car at the plant, which had been running for over two decades as a joint venture with General Motors. Now, Toyota will produce the cars in its other North American factories and Japan.

New York Times columnist Bob Herbert blasted the company for leaving California and called the move a cold and irresponsible act.” He criticized the company for turning its back against a state that provided the company with benefits and large infrastructure improvements — measures that helped the company become the world’s wealthiest and largest automaker. Herbert also notes that Toyota has profited from the Cash-for-Clunkers programs.

What we’re dealing with here is the kind of corporate treachery toward workers and their local communities that has ruined countless lives over the past several decades and completely undermined the long-term prospects of the economy,” he wrote.

In fact, a report released by the state commission earlier this month found that replacing the jobs lost from the factory closing will cost taxpayers $2.3 billion dollars. The report, led by Harley Shaiken, a labor professor at the University of California, Berkeley, debunks the reasons why the closure was imminent:

These results might be tragic, but are they inevitable? Not at all. Most plant closings result from one or more of three factors: a slow-selling product, a company in financial trouble or a failing factory. None of these factors are present in this case. The Toyota Corolla, built at NUMMI, is the best selling car of all time and was the second best-selling car in the U.S. in 2009.12 Toyota is the wealthiest automaker in the world, having earned a record $65 billion between 2004 and 2008 alone.

Instead of closing the factory, the plant could have produced Hybrid models or led the way in creating environmentally efficient cars, the report said.

The closing surely won’t help Toyota’s image as they struggle with their recall scandal. California has the fifth highest unemployment rate in the country — 12.4 percent as of last December. The loss of these manufacturing jobs is a huge blow to the state.

UPDATE: About 90% of NUMMI workers approved the settlement agreement in a vote Wednesday night, the San Jose Mercury reported. The payouts range from $21,175 to $68,500 for those who were employed for 25 years at the factory. The average settlement, for 15 years of work at the plant, is $53,500, union officials told the newspaper.

We are not happy with the package,” Sergio Santos, president of UAW Local 2244, said Wednesday. The money will never replace the loss of our jobs. We’re going to be thrown out on the street.”

Akito Yoshikane is a freelance writer based in Chicago.
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