Local News

FREMONT (CBS 5 / AP / BCN) ― Toyota Motor Corp. said Thursday it plans to end production in March 2010 at a California joint venture where it has built vehicles with General Motors.

The decision would mean the shutdown of the sole auto assembly plant on the West Coast if no other carmaker emerges to keep it going.

Toyota's board voted early Thursday to end the company's production contract at the Fremont-based New United Motor Manufacturing Inc., spokeswoman Cindy Knight confirmed.

NUMMI officials said later in the day that they had received notice that Toyota wouldn't order vehicles from the plant after March of next year.

"We are deeply saddened that we will no longer have vehicle orders after March 2010," NUMMI president and chief executive Kunihiko "Kent" Ogura said. "We particularly regret the impact that this will have on our valued NUMMI team members."

Toyota had said previously that it was moving toward liquidating its stake in the Fremont facility after the plant's fate was thrown into question in June when GM announced it was withdrawing from the 50-50 joint venture. General Motors Co. emerged from bankruptcy and the company's stake in NUMMI is now part of Motors Liquidation Co. also known as Old GM where it will be liquidated under court supervision.

The NUMMI plant, established in 1984, employs 4,670 workers. Toyota builds the Corolla compact car and the Tacoma pickup truck at the plant and until recently GM built the Pontiac Vibe station wagon there.

California Gov. Arnold Schwarzenegger said it was "a sad day in the history of Fremont as California joins the ranks of states adversely affected by the bankruptcy of General Motors and the worldwide collapse in demand for automobiles."

He added that the state was working to "ensure appropriate employee severance, proper environmental remediation and assistance in transforming the site to alternative uses."

California lawmakers have discussed with Toyota a package of financial incentives to keep the plant open. The six-month period before Toyota ends production gives the state time to find another automaker or manufacturer that may want to use the facility.

But U.S. Sen. Dianne Feinstein, D-Calif., called the decision a "devastating blow" that would likely lead to the plant's closure. She said the economic package included tax breaks, the ability to buy cheaper electricity, the waiving of sales taxes and $20 million in state aid to improve shipping facilities at the plant.

"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," Feinstein said.

Feinstein said she was hopeful the facility could attract "some new form of manufacturing and I would hope that Toyota would be helpful in that endeavor."

U.S. Sen. Barbara Boxer, D-Calif., said the unfortunate development means that "we must now do everything we can to help the thousands of NUMMI workers and other businesses in the community that depend on the plant."

Japanese media outlets had reported Wednesday that Toyota would slash worldwide capacity by 700,000 to 1 million vehicles and the NUMMI production was expected to be part of the global plan.

Fremont Mayor Bob Wasserman said he too was "extremely disappointed" at Toyota's decision "to no longer manufacture automobiles in Fremont."

"Toyota has told us their decision to close the plant was purely a business decision necessitated by General Motors exiting the NUMMI partnership, a substantial decline in automobile sales in the United States, and the excess production capacity that exists at Toyota auto plants," he said.

Fremont Chamber of Commerce government and community affairs director Nina Moore said that NUMMI's closure would be "a devastating blow" to the city and the state.

Moore said that in addition to the NUMMI workers who would lose their jobs, California would face an estimated loss of 35,000 jobs directly and indirectly because the closure of NUMMI would affect companies that are suppliers for the company or do business with the plant in other fashions.

The only public official to offer a more upbeat assessment was Lt. Gov. John Garamendi who said he was still "optimistic" that the auto plant could continue to operate under Toyota, another automaker or by Toyota in partnership with another company.

Garamendi said he had expected Toyota to make this announcement ever since bankrupt GM said it would withdraw from the partnership.

But the lieutenant governor said he believed Toyota was merely "posturing" with bankruptcy court officials about the auto plant's assets.

"A 25-year marriage is breaking up but Toyota has a new lover and it's called California and we want them to stay," he said. 

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