“Our focus right now is dealing with transitions for the workers, the suppliers and the communities,” said Bruce Kern, executive director of the East Bay Economic Development Alliance, in an early October interview.
The closing of the NUMMI plant, a groundbreaking alliance between General Motors and Toyota a quarter-century ago, is a significant earthquake in the tectonic shifts now rearranging the American auto industry.
NUMMI, which has been Alameda County’s largest private employer, stands for New United Motor Manufacturing Inc.
Some 4,700 jobs are at stake at the plant. There are many more when you take into account more than 1,000 vendors (“from Redding all the way to San Diego,” said Kern). “We are identifying the suppliers,” said Kern, “and putting together a package of resources to retain their presence in the market and to expand.”
The transition team will assess the need for loan guarantees, and marketing and development analysis services for NUMMI vendors.
General Motors announced it was pulling out of the NUMMI partnership in early summer, at a time when the auto-maker was “emerging” from bankruptcy with vows of a leaner, more transparent GM bolstered by investment from the U.S. and Canadian governments.
For most of the summer, a “red team” of city, county and state reps, including Gov. Schwarzenegger, was preparing a package of incentives for Toyota to keep the NUMMI plant going on its own. The package promised infrastructure improvements including federal stimulus funds.
Finally, at the end of summer, Toyota announced it would produce no more Corollas at the Fremont plant as of April 1.
Daren Fields, economic development director for the city of Fremont, used a marital discord analogy.
“You had this marriage and you have a child, NUMMI,” he said. “One of the parents decides it wants a divorce, which is what General Motors did. The other one says,
‘What does this mean? What about our child?’ That’s what they took some time to do.”
And it will take more time to clarify ownership after the collapse of the NUMMI partnership and prepare a transition for another use of the site.
“Once we have a definition of what the liquidation process will be, the city will be at the forefront of looking at all alternatives,” said Kern, citing Fremont’s authority over land use and zoning.
There will be a public-private planning process, Fields said. It’s similar to a military base closure, he added, where a number of possibilities may emerge simultaneously. “It’s a land use opportunity that’s bigger than the plant itself,” he said.
The site includes a dense development with buffers. At the south end are 53 vacant acres. Fields said the north end features a 107-acre vacant parcel, which abuts the site in development for a future Bay Area Rapid Transit subway station called Warm Springs.
In the early 1980s, as the U.S. reeled in a recession, GM announced its recently closed auto plant would be converted into the NUMMI partnership. Much was made of the two giant auto-makers learning from each other’s manufacturing and management customs.
It was Toyota’s first leap into major manufacturing in the U.S. A couple of years later, Toyota would break ground on a wholly owned plant in Kentucky that would grow to be its biggest factory outside of Japan.
Relative to the devastation of some areas when an auto factory closes, Fremont is doing well. Most workers do not live in Fremont nor do they shop there much, Fields said. The property tax impact is lower because the original GM plant predated 1978’s Proposition 13. The cars are sold elsewhere, so Fremont has not become dependent on that sales tax windfall. Most of the plant suppliers are located outside Fremont.
“We have a real diversified local economy,” said Fields. “This is not Flint, Mich., where the plant was the basis of the economy.”
Lance Howland can be reached at email@example.com