Toyota Frees Itself from UAW, Union Has a Fit

It’s almost like a battle between good and evil, and Toyota has just blown up the union’s Death Star.

With Toyota’s decision to close its California plant, known as New United Motor Manufacturing Inc. (NUMMI), comes an added bonus: The company no longer has to deal with the UAW.

Toyota plans to close the plant, which has built Corollas and Tacomas, in March. That’s a major setback to the UAW, which desperately wants to spread its empire and organize labor at other Asian automakers.

If I were an exec at Toyota, I would’ve been singing songs of praise as the joint venture with GM came to a close and the opportunity to sever union labor by closing the plant presented itself.

NUMMI, created 25 years ago, was an attempt for GM and Toyota to work together and learn from each other. Toyota’s lean manufacturing process was of interest to GM, while an American plant for Toyota helped boost its presence here. A win-win all around, right?

Toyota gets away from the union

Sort of. According to a Detroit Free Press article, most of what GM learned ended up in the Saturn division… an ironic outcome, considering Saturn’s fate. Toyota had to pay union rates at the plant, which are usually higher than what it pays employees at other plants.

That same article says Toyota is admitting that it has expanded too quickly and needs to reduce the capacity of vehicles it is able to produce by 700,000 each year. In addition to severing union ties, closing NUMMI also accounts for over half of those reductions and will help the company remain as lean as possible.

Yes, the closing sucks for the employees, maddens union reps, and hurts the fragile California economy. But as a business decision, closing NUMMI is the best move Toyota could’ve made.

Let’s hope the UAW stays away from foreign automakers and continues to loosen its stranglehold on the domestics. Agreed?

-tgriffith

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