Toyota said Wednesday it will spend $250 million to assist employees at a Northern California factory slated to be closed next month.
Toyota Motor Corp., which is working to repair its image in the U.S. following recalls and congressional hearings, said the bonuses are for salaried and hourly workers at Fremont-based New United Motor Manufacturing Inc. who will lose their jobs when production halts there on April 1.
The facility, California’s sole remaining automobile assembly plant, started 25 years ago as a joint venture between Toyota and General Motors Co. The goal was that the American automaker observe the Japanese car-making system up close and Toyota could test out its model on U.S. workers.
GM pulled out last year and is liquidating its stake. Toyota announced in August that without GM, it could not sustain the factory and it would halt production there. About 4,600 people work at the plant, which makes the Corolla sedan and Tacoma pickup.
Production of the Corolla will move to Canada and Japan, while production of the Tacoma will move to a plant in Texas, said Mike Goss, a Toyota spokesman. Goss said Toyota hopes to be able to eventually move the Corolla back to the U.S.
The announcement from Toyota about the bonuses came the same day a study was released analyzing the economic impact of closing the plant. The study was prepared by Harley Shaiken, a labor professor at the University of California, Berkeley, for a commission led by California Treasurer Bill Lockyer, who has been pressing Toyota officials to reconsider the decision to stop production in Fremont.
Lockyer argues that besides the job losses, it’s not in Toyota‘s best interest to leave the plant when it is already struggling to regain public support following recalls over safety issues.
The treasurer has sent a letter to the automaker’s president, Akio Toyoda, requesting that he or a senior staff member meet with the commission at the automaker’s Japanese headquarters next week.
The report estimates the plant’s closure will affect 25,000 workers because of suppliers losing jobs, and will shave $1 billion in revenue for the state and local communities over 10 years. It also says it would cost California taxpayers $2.3 billion to replace jobs lost from the factory’s closure. Researchers estimate the expense to taxpayers at $92,000 per job, including wages, health care and social costs.
“The impact on the Bay Area, on local families, on the state of California, is severe,” Lockyer said in an interview. “The decision to close the plant is not in Toyota‘s best interest.”
The report says Toyota has an opportunity to use the plant and its skilled workers to boost production of hybrid and electric vehicles, which have a big market in California. And, it says, reversing the decision to close would help restore the company’s image.
Goss said Toyota had no plans to change course.
“It’s been a tough difficult, decision, but we think we’ve done the fairest thing possible to keep production going for 7 months so they can prepare for their futures and we’re providing these bonuses so they’ll have help in the transition,” Goss said.