THE long-awaited decision from the top brass of Toyota that their New United Motor Manufacturing plant a stone's throw north of Milpitas would be closing wasn't unexpected. Still, it remains a shock to the state's economic system and reflects the cold, hard realities of globalization, and the ups and downs of free market enterprise. It has happened in lots of places during this particular "down" cycle of a brutal recession. However, it is always harder to take when it happens in your own backyard and impacts real people in your own neighborhood.
Just like some ancient Greek tragic plays, the outcome was pretty much known by anyone willing to see the handwriting on the wall.
NUMMI was an idea that seemed fresh and different and hopeful back in 1984. It was going to bring together a partnership of giants: the 900-pound gorilla of the American auto industry (which had sniggered at those little Japanese cars when they first came to our shores) with the savviest of the foreign carmakers. Toyota knew how to build quality into its cars before they left the assembly line and now GM would learn how as well.
The subsequent 25-year history showed that GM wasn't really able to learn much as its final humiliating bankruptcy has proved. Toyota in the meantime had gone onto glory as the company that pioneered the best hybrid technology, a continually repolished reputation for long-wearing cars, and high customer loyalty. Thus when GM had its ultimate fall, it had to shed the
Milpitas, remember, had its own jolt when Ford still a mighty power in the auto business decided it was a lot cheaper to make cars in the south, in Mexico or Canada or even Michigan as opposed to California. The community survived the blow because the high-tech boom was going into high gear. Eventually Ford had to dig deep in its coffers to fund a cleanup and conversion of its 160 acres here into a giant shopping center. The GreatMall, now several owners later, has indeed been a major local beneficiary as an employer, a sales-tax generator and an impressive local institution.
The NUMMI shutdown next March will cut loose nearly 5,000 workers who toil at the kind of good-paying blue-collar jobs that are few and far between in the Bay area. Retraining efforts will be made but will be challenging, all the more because comparable jobs in construction and manufacturing have been among the hardest hit in our downturn. It also hasn't been lost on organized labor that NUMMI was the only plant Toyota operates in the United States that has a union workforce.
There are, of course, serious "multiplier" effects. Suppliers to the plant in Fremont themselves employ an additional 50,000 workers. And the flow of NUMMI checks through the local economic bloodstream could be as much as a half-billion a year.
The impotent flailing over the past few months by our elected officials who still promise to bring a package of incentives to Toyota to win a stay of execution is a grim reminder of our gridlocked state government and a federal government that has too many other fish to fry.
One other ironic aspect of the federal government's role is particularly telling. In the divvying up of the $3 billion in tax dollars that juiced up car sales through the "Cash for Clunkers" program, guess who took the lion's share of the booty? You guessed right. It was Toyota.