California Autos Examiner

Monday, August 24, 2009

NUMMI is no match for Tesla

NUMMI's future is very cloudy

With Toyota's overcapacity issues, Pontiac Vibe assembly over and General Motors out, the future of Fremont, CA's New United Motor Manufacturing Inc (NUMMI) is very, very bleak.

Catch a slideshow of NUMMI in this link.

One hope held by some Bay Area locals was that upstart Tesla, which just received a large helping of Federal loans, could make a home at NUMMI. However, those hopes were dimmed with the announcement of Tesla's new Palo Alto digs for the assembly of its powertrains and corporate headquarters.

Tesla still needs a facility to build its Model S , but the company says that NUMMI is far too large.

"We need about 500,000 square feet for our plant and NUMMI is 5 million" says Rachel Konrad, a spokeswoman for the electric-car company told Automotive News. "The auto industry isn't the only segment of the California economy that has been struggling. We have a lot of mothballed plants to choose from. There are some aerospace and chip factories around here that have closed."

Some cruel irony for NUMMI has been the fact that the cash for clunkers program has upped demand for the Corolla, causing Toyota to hire new workers at NUMMI temporarily to meet demand.

Most reports have it that Toyota will end production at NUMMI by March 2010. The plant is Toyota's only UAW facility and it operates in a high cost area. However, there are a few things to consider. California is extremely important to the company and Toyota must weigh any backlash carefully. Also, Toyota's new president, Akio Toyoda, spent part of his early career running the facility that was opened by his father. California is trying to sweeten the pot for Toyota as well, with all sorts of tax breaks, loans and even cheap electricity.

No matter the costs, emotions, rallies and incentives, Toyota will likely make its official announcement that it is pulling the plug on NUMMI by the end of August. The impact of losing 4,500 workers and countless related jobs is a hard reality for a state rocked by economic turmoil and a town that has also lost the Oakland A's.

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