Toyota wants California to repay it for training workers
Toyota Motor Corp. is closing California’s last automobile plant, but that isn’t keeping the factory from asking the state for $2 million in taxpayer money for recent training that made some of its workers better car builders.
The automaker says it deserves to be paid back money it spent on training this year at its Fremont plant under a Feb. 27 agreement with the state’s Employment Training Panel.
But critics are incensed, noting that there won’t be any more auto assembly plants left in the state where workers can make use of their training.
“This has the appearance of some kind of dreadful corporate welfare,” said Barry Broad, a labor union lobbyist who serves as the panel’s acting chairman. “We can’t in good conscience give money to train people how to do jobs that are about to disappear forever.”
The employment training panel hands out funds to companies that want to improve or expand their workforces. The $2-million payment is being sought by New United Motor Manufacturing Inc., which was launched as a joint venture between Toyota and General Motors Corp. to build cars at the Fremont plant.
Toyota for now is the sole participant in the 25-year-old plant, 40 miles southeast of San Francisco. In July, General Motors announced it would pull out of the partnership. Toyota said Aug. 27 that it would close the giant facility.
But New United Motor still wants the training money, saying its managers entered into an agreement with the state panel five months before the decision by General Motors.
The plant is scheduled to close March 31, putting 4,700 people out of work.
“These skills have made our team members greater contributors to NUMMI and will make them more attractive to prospective employers when they conclude their employment here in April 2010,” the company said in a statement.
The automaker’s partner in the training program, the California Manufacturers and Technology Assn., which worked with business, labor and government organizations to try to persuade Toyota to keep the factory in Northern California, said that a deal should be a deal.
“We expect that “contractual obligations regarding completed employee training will be met by both NUMMI and the state,” President Jack Stewart said.
The Employment Training Panel, whose members are appointed by the governor and the leaders of the Assembly and Senate, has scheduled a meeting Friday to discuss the automaker’s reimbursement request.
For its part, Gov. Arnold Schwarzenegger’s office has directed the panel “to conduct a thorough review and determine if NUMMI misled the state at any time,” spokeswoman Camille Anderson said. “If so, every tool available will be used to safeguard these training resources.”
According to the agreement between the automaker and the state panel, the training involved “continuous improvement manufacturing skills” as well as “business and computer skills” for jobs that pay $19.58 to $23.64 an hour.
Some of the training, which covered 1,400 employees, was related to auto production and some applied to “more generalized manufacturing,” said Brian McMahon, the training panel’s executive director.
McMahon said he didn’t know whether any of the newly trained workers might be able to transfer to other Toyota plants in the United States.
“I don’t believe there are any more opportunities for them in automobile manufacturing” in California, he said.
Since being created in 1983, the panel has provided more than $1 billion to train more than 700,000 workers at 60,000 California companies.
This year, the panel has provided dozens of training grants to big and small companies, such as Georgia-Pacific Gypsum and software producer Intuit Inc. Other training money went to the Gnomon School of Visual Effects in Hollywood, which teaches animation and special-effects skills, as well as to Goodwill Industries.
The program’s $56-million annual budget is funded by a tax on employers, equal to one-tenth of 1% of payroll, up to a maximum of $7 per employee per year. But demand for training funds is quickly depleting available resources. The panel says it could exhaust its budget by Dec. 31, halfway through the fiscal year.
With such tight finances, the panel is in no position to give $2 million to a closed New United Motor when so many other companies that want to stay in California could better use the money, said Pat Caccamo, a community relations liaison for the United Automobile Workers union in California.
“I think it’s extremely greedy of them,” she said. “They just think about getting themselves the money when they are closing the plant.”