Toyota Motor said on August 28 it was abandoning a plant in California that it jointly owned with General Motors -- the first time the Japanese firm has ever pulled the plug on a factory.
The move, which affects 4,700 workers, follows GM's decision in June to drop its ownership stake in the joint venture, New United Motor Manufacturing Inc. (NUMMI), as it restructured under bankruptcy protection.
"We have determined that over the mid- to long-term, it just would not be economically viable to continue the production," said Toyota's North America head, Atsushi Niimi. "We deeply regret having to take this action."
The plant in Fremont, Calif. will end production for Toyota in March and shift output of Tacoma pick-ups to a factory in Texas, while Corollas will be manufactured in Canada and Japan for the North American market.
"Toyota's announcement that it will close the NUMMI plant is devastating news for thousands of workers in California," said Ron Gettelfinger, president of the United Auto Workers union. "It's unfortunate the company chose to close a U.S. facility after benefiting so greatly from the federal 'cash-for-clunkers' program, which is funded by U.S. taxpayers," he said.
New United Motors Manufacturing Inc. is the only unionized Toyota plant in the U.S., but Niimi said the presence of United Auto Workers had no "direct impact" on its decision. "California is a very high cost location, mainly because our major supply bases are located in the Midwest region of the U.S.," he said. "Also California's cost of living is rather high."
Toyota entered the joint venture in 1984 as an experiment to see if American workers could build cars according to their standards. Since then, it has pursued a policy of building the majority of the vehicles it sells in the U. S.s in North America and has launched several advertising campaigns highlighting its contributions to the U.S. economy.
"We remain strongly committed to maintaining a substantial production presence in the USA and North America," said Niimi. "To that end, we will consider moving additional Corolla production back to North America over time."
Copyright Agence France-Presse, 2009