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Today the workers of the  New United Motor Manufacturing Inc.(NUMMI) plant in Fremont . The 4700 workers are  getting an average severance package of $54,000 each.  Here are some of my thoughts on this news.

First of all, NUMMI is a joint venture between GM and Toyota.  The main reason that it is closing is that GM basically died and Toyota no longer wants to keep the plant open.  It is true that most of the cars manufactured there were Toyotas, but it also produced a good amount of GM cars over the past few decades.  Now I feel that its ironic that Toyota is paying for the entire severance package and still getting a ton of bad press for closing down this plant.  Where is GM with its bailout money now?

On the radio I heard a NUMMI worker who said that she will be getting around $65,000 in severance and she thought that it was very generous.  She will also get unemployment pay, retraining, and subsidized health insurance.  It is actually pretty ridiculously generous.  If my company shut down I think I would be lucky to get even a month of severance. This whole thing makes me wonder if non-US based companies from Japan or Europe are more generous in their worker benefits.  If so, perhaps it is good for everyone to pursue a career with those companies?

Ultimately this comes down to the issue of an increasingly global economy.  I have always said that it is short sighted for Americans to only buy things made by American companies because non-American companies do create a lot of jobs here.  If the president or our governor wanted to create more jobs then they should really work on attracting these multinational corporations to come and hire American workers.  If the NUMMI plant were cheaper to operate then Toyota may have kept it open because by all accounts I have read it was a great plant that produced cars efficiently for decades.  It really doesn’t surprise me that Toyota closed it down because California is probably one of the most expensive states to do business in, and the Bay Area is one of the most expensive labor markets.

It is sad that the Bay Area and California as a whole will be losing thousands of jobs, but I wish the best to all the former NUMMI workers.   Perhaps some of them could retire now since their pensions are still intact.  If I were in their shoes I think I would enjoy the severance a little and perhaps do something completely different.  It is really a great opportunity for them, and I hope they make the best of it.

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canadian cialis onlineon 04.02.10 at 2:16 am

Closing NUMMI has nothing to do with “California costs”. The highest cost element has and always will be labor cost. It’s Toyota that is spreading this canard about “California costs of doing business” to divert the public’s attention away from the real reason for closing NUMMI.

When GM filed for bankruptcy, they basically escaped from paying any severance. GM production accounted for 15% of production at its peak. After GM left, it was all Toyota production with us working overtime to meet demand…. even working Saturdays. NUMMI is basically a Toyota plant. Even the GM car, Pontiac Vibe, is a Toyota Matrix rebadged.

It was Toyota that decided to shut down NUMMI. Toyota could’ve bought GM’s share of the plant for pennies on the dollar after GM filed for bankruptcy, but Toyota decided not to despite having $39.4 billion in cash (9/30/09). They would’ve only had to spend less than 1% of their cash to acquire the other 1/2.

The real reason Toyota shut down NUMMI is to get rid of their only UAW represented plant. Now, Toyota no longer has to peg their wages at their other plants to NUMMI and they are free to lower wages. The closing of NUMMI is a union busting event.

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