A series from…
NUMMI Workers Say Yes to Severance Package
3,700 members of UAW Local 2244 can look forward to leaving the plant on April 1st with the promise of a chunk of change coming in May. The San Jose Mercury News reports 90% of those who voted approved the deal worked out between union negotiators and NUMMI management ahead of the closure.
Seniority dictates how much each member gets. At the top, for 25 years, there’s about $68,500. The average settlement – based on 15 years of service – is roughly $53,500. The minimum: $21,175. No word on medical benefits union leaders had said they were holding out for over the last half year. $278 million was apparently good enough for most. who voted. The Los Angeles Times notes workers will receive the payment in one lump sum.
NUMMI management argued from the get-go the money was not a severance package, but a “retention” deal, aimed at getting workers to stay on the job until the very last day. So injured workers on disability get only the minimum. Those who’ve already left for another job get nothing. Other than the security of a new paycheck.
NUMMI Job Center Closing Friday
But first, I got a chance to visit the plant and the plant’s job center in action. Here’s the radio story.
And the photos taken by intern Jennifer Baires.
Photo Slideshow
There’s another job center just for UAW members in the Union Hall. Tony Castillo of the Alameda County Workforce Development Board says the county’s game to fund that center for another three years, contingent on the good graces of whatever company/organization takes over the building when Local 2244 disbands.
Bits & Pieces
The Tesla Roadster (Credit: Tesla)
Starting today, as Green Car Reports puts it, “the not-yet-quite-bankrupt State of California is offering $5,000 rebates to residents who buy or lease a …Tesla Roadster, the $109,000 two-seat all-electric convertible that blasts from 0 to 60 mph in less than 4 seconds on the power of 6,831 little lithium-ion batteries.”
The Nissan Leaf (Credit: Nissan)
In truth, the Clean Vehicle Rebate Project is offering a range of rebates ($2,500-$7,500) for a range of electric drive vehicles. To get the maximum rebate, the state suggests a car like the Nissan Leaf, scheduled for release this December. That’s Advantage One for the Leaf. Advantage Two: while Nissan hasn’t named a price, it’s “targeting a price in the range of other typical family sedans.” Advantage Three: Hertz has announced it will rent Leafs, taking reservations starting in April.
Still, 0 to 60 in less than 4 seconds is tempting. Presuming you can drive that fast in California.
Now for some grimmer news. California lost 5%, or 79,000, of its industrial jobs between February 2009 and February 2010, according to Manufacturers’ News Inc. Southern California took the hardest hit. “Even though Los Angeles is still the state’s No. 1 city for manufacturing jobs,” the San Francisco Business Journal notes, “the Southern California region as a whole lost 56,681 jobs.” By sector, lumber, wood, furniture and electronics were particularly hard hit.
NUMMI Tentative Severance Package Deal Reached
The management of New United Motor Manufacturing Inc. and United Auto Workers have reached a tentative deal to cover union workers at the auto plant, which is closing April 1. In a statement, UAW VP Jimmy Settles said “We are deeply disappointed that Toyota has decided to close this award-winning facility” but also “We believe this agreement will help the membership as they transition to other work.”
Next step: a ratification vote by the union’s membership. Date and details of the agreement TBA.
Earlier this month, Toyota committed $250 million to NUMMI to fund transition support for salaried and hourly workers who stay on the job through April 1st.
We’ll take your plant
In the waning days of NUMMI, some would-be electric car manufacturers are coming forward with proposals to take over the plant, contingent on the generous help of the federal government and/or Toyota.
Aurica Motors of Santa Clara says it’s talking with NUMMI. Launched by a Silicon Valley physicist, Aurica has been working over the past four years on a system that would make electric cars travel farther on the same battery charge. The product is still a prototype and the company has yet to make a sale. Aurica’s general manager tells AutoWeek.com it wants to “branch into” auto manufacturing partly as an outlet for its drive train technology.
Commenter David Taylor tells us nXe Energy made a pitch at a recent local UAW meeting, urging the union to join the company in its bid to take over the plant. As a condition of the purchase, the Department of Energy would need to guarantee a $500 million dollar loan, and Toyota would need to agree to continue operating the plant for at least one year, to give nXe Energy time to ramp up.
A spokesman for Toyota says these are questions for NUMMI to answer. A spokesman for NUMMI tells the Oakland Tribune “While we appreciate their interest in NUMMI, there has not been an opportunity for productive discussions with Aurica …We are not sure whether their proposal is viable.” nXe? I’ve put in calls about that proposal, and am waiting to hear back from NUMMI and the UAW Local 2244.
5.5 million square feet is a lot of square feet to fill. Bear in mind that Tesla – a company with an actual track record manufacturing electric cars – anticipates requiring something about a fifth of the size. Which may explain why Tesla’s not planning to take over the Fremont facility.
The Trip to Japan
Japan's Toyota Motor president Akio Toyoda says NUMMI closure will continue as planned (Credit: STR/AFP/Getty Images)
This just in from the Middle East North Africa Financial Network. Or really, Marketwatch. (Google News alerts pull up random publications at times.) A UAW delegation to Japan has not changed Toyota’s mind about NUMMI. But UAW VP Bob King told the Japanese business daily Nikkei the union will continue to try. The delegation is meeting with company officials today at Toyota HQ near Nagoya.
Bits & Pieces
Have you noticed a certain amount of schadenfreude from Detroit about the Toyota recalls? Maybe it’s just the handful of folks I’ve talked to from Back East, but you’d think the very fact celebrities like Cameron Diaz drive Priora is somehow proof positive the fruits and nuts of California don’t make rational decisions about the vehicles we drive. Which is one reason why David Segal’s extensive exploration of automotive quality control in the New York Times makes for such compelling reading. (There is a shout-out to NUMMI in the article, too.)
While we’re browsing the New York Times, there is another article by Louis Uchitelle about the sudden decline of auto towns like Moraine, Ohio. We learn that Edward B. Montgomery, executive director of the White House Council on Automotive Communities and Workers, has made 23 trips to cities like Moraine. He doesn’t promise jobs on these trips. Instead, he promises federal stimulus dollars. Uchitelle writes, “There is an implicit political message in this largess. It goes something like this: Stick with the president and the Democratic Party, and while we cannot bring back mass production with its large-scale employment, we can help you in the transition to other sources of income and jobs.”
Speaking of which, I head out today to Fremont, to check out the transition center available to NUMMI workers. As it happens, on this very day, the California Employment Development Department (EDD) announces it’s seeking a $33 million federal grant to help these very workers.
The BYD E6 on display at the 2010 North American International Auto Show in Detroit. (Credit: STAN HONDA/AFP/Getty Images)
In other news, California may be home to yet another electric car making facility, this one from China. The Los Angeles Business Journal reports BYD is looking to open its North American headquarters and an auto assembly plant in Los Angeles County. “BYD Co. Ltd. is one of the world’s biggest rechargeable battery manufacturers and also makes consumer electronics. Despite entering the auto market only seven years ago, its BYD Auto unit is already the fourth largest car maker in China.”
It’s not a done deal, the BYD facility in LA, but wooing is going on, from LA County Supervisor Michael Antonovich, LA City “Jobs Czar” Austin Beutner, and Bill Allen, chief executive of the Los Angeles Economic Development Corporation. The LAEDC, by the way, tells us LA County is the largest manufacturing center in the U.S., employing 433,200 workers in 2008. Who knew? Now, you do.
NUMMI Developments
Have a listen below to Kelly Wilkinson’s radio story that covered a) the federal pension guarantee for NUMMI workers; b) Toyota’s pledge to bankroll their bonuses; and c) the Blue Ribbon Commission report. Her spot aired this morning on The California Report.
NUMMI Closure To Cost Taxpayers
That Blue Ribbon Commission report State Treasurer Bill Lockyer promised is out today. UC Berkeley Professor Harley Shaiken crunched the numbers and concludes:
Plant closings are damaging in good times but become devastating during hard times. The Council of Economic Advisors estimates that it costs $92,000 to create a job. This means that creating the number of jobs lost just at NUMMI — 4,700 — would cost more than $430 million, and the cost of creating the 25,000 jobs in the statewide NUMMI network would total $2.3 billion.
…
This is the moment for political leaders in Washington and Sacramento to address the closure. The most immediate, direct, and cost effective jobs plan available is to keep NUMMI running.
The Commission plans to deliver its findings to Toyota in Japan. In the meantime, sources inside the plant in Fremont report an anxious atmosphere as workers wait for word on when severance package talks between UAW Local 2244 and Nummi Inc. will wind up. Any day now?
Some Relief for NUMMI Workers
This just in from Reuters: The Pension Benefit Guaranty Corporation, the federal agency that insures corporate pensions, says it will assume responsibility for the plans of 5,800 workers and retirees of NUMMI in Fremont. As previously reported, New United Motor Manufacturing Inc. is closing down at the end of this month. The PBGC estimates the pension plan is 55% funded with assets of $161 million to cover liabilities of $292 million. The agency expects to cover all but $5 million of the shortfall.
I’m asking around to see what this means for the severance/retention package talks presumably still going on between NUMMI and UAW Local 2244… Stay tuned!
UPDATE: Still waiting on my sources about the PBGC thing, when word comes down Toyota will commit $250 million “to fund transition support” for NUMMI workers.
You may be thinking, “Hey, isn’t NUMMI Inc. technically a separate entity from Toyota and GM?” The press release acknowledges the practical nature of the relationship. “Although NUMMI is an independent company, Toyota has made a significant financial commitment to help ensure that production continues as smoothly as possible and that team members receive transition support. We hope that NUMMI and the United Auto Workers will reach an agreement soon, so that NUMMI’s UAW team members can benefit from the transition support that we have committed to funding,” said Jim Wiseman, Group Vice President, Toyota Motor North America.
RSS FEED
Subscribe to our blog feed and you'll never miss a post!