After what seemed like an endless circle of rumors and heresy it seems New United Motor Manufacturing Inc (NUMMI) has finally handed down the official verdict on its closures: it’s a go. According to reports, despite heavy protest from workers and industry lobbyists alike, the Toyota and General Motors joint manufacturing venture will be officially closing its doors in March 2010, simultaneously releasing 4,700 works from employment.
Although many familiar with the sharp downturn the beleaguered global auto industry are no longer shocked by plant closures, Toyota’s decision to abandon NUMMI was nonetheless an unpleasant surprise. Thanks to an impressive foresight and keen business instinct, Toyota has managed to keep all of its operating facilities open (albeit some in very limited capacity) throughout the financial catastrophe and NUMMI’s closure marks the first concession the company has made towards the global recession.
It should be noted, however, that although it was Toyota’s final vote that sealed NUMMI’s fate, both GM and the UAW (surprise!) are equally – if not entirely – to blame for the closure. Not only was NUMMI responsible for the production of now-defunct Pontiac products, but it was also the most expensive plant on Toyota’s payroll thanks to UAW-enforced $28-an-hour wages (compared to the $24-an-hour worker wages at Toyota’s wholly owned plants). Toyota’s decision to jump ship seems to be one that was largely made for them.
Image Cred: AP Photo