National Consumers League

Toyota Closing Plant at Workers' Expense


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By Sally Greenberg, NCL Executive Director While finishing up a trip out to California's Bay Area this week, I couldn’t help but lament the local news reports there that Toyota is closing its only unionized plant in the United States. The plant was a joint venture between Toyota and GM that launched in 1984 as an experiment for Toyota in building cars in the US and for GM to learn more efficient techniques from Japan. 4,700 workers will lose their jobs at the plant, which is based in Fremont, CA. California state officials say the ripple effect will cost 40,000 jobs in the state, all told. Toyota’s decision strikes me as utterly unfair and unjustified on several levels. First, the carmaker has made out royally in the last few months, selling more cars than any other manufacturer through the U.S. taxpayer-subsidized “cash for clunkers” program. The hottest item was the Corolla, ironically built at this Fremont plant, and Toyota even had to bring more workers in to keep up with demand generated by this program. So here we have American auto workers – who happen to be unionized– working overtime to crank out cars so this Japanese car maker can profit from a United States government subsidy, and Toyota goes and closes the plant once the “cash for clunkers” program is over. Second, Toyota is closing its only unionized plant, so this is an effort to cut costs at the workers’ expense. In fact, the company operates plants in Alabama, Indiana, Kentucky, Texas, and West Virginia and they aren’t closing those. Toyota has successfully resisted the UAW’s efforts to unionize in these other states. Toyota’s spokesman for North America said that they “deeply regret having to take this action” but that “over the mid-to-long term, it would not be economically viable” to maintain the plant. So, close the union plant because workers make a little more money and get a little better benefits. That stinks. UAW President Ron Gettelfinger observed that Toyota workers at the plant “deserve better than to be abandoned by this company, which has profited so richly from their labor, their productivity, and their commitment to quality.”  I couldn’t agree more.