NUMMI will not be repaid by California agency

A state agency that hands out training funds rejected a $2-million reimbursement request Friday from what was California’s last auto manufacturing plant, the New United Motors Manufacturing Inc.

Scarce state funds would be better spent on sharpening the skills of workers at companies that are still doing business and creating new jobs here, six members of the California Employment Training Panel said in a statement before voting unanimously to reallocate the money.

The panel said the funds would be better used to offset a shortfall in training taxes collected so far this year and to spend the money on “vital training projects throughout the state.”

No one from New United Motors spoke at the panel meeting. The company did not respond to requests for comment.

The quarter-century-old auto plant in Fremont, southeast of San Francisco, had been a pioneering joint venture between Toyota Motor Co. and the former General Motors Corp., which pulled out of the partnership when it went bankrupt last year.

The factory closed three weeks ago after Toyota contract to build cars and light trucks at its only unionized U.S. facility expired. About 4,700 workers lost their jobs.

In August, Toyota doomed New United Motors, saying it would be uneconomical to operate the California factory without GM, which emerged from bankruptcy as General Motors Co.

Plans to shut the auto plant didn’t prevent New United Motors from seeking the money it spent teaching “continuous improvement manufacturing” and other business skills to workers under an agreement signed in February between the company and the panel.

The training provided to the auto workers will “continue to benefit team members throughout their careers,” said the company, known as NUMMI. The $2 million would have reimbursed the company for wages paid to in-house trainers and to help former NUMMI workers find new jobs.

New United Motors management argued that it did not know that the plant would be closing when it signed the accord with the state.

Staff and panel members were skeptical of that explanation.

“It is only reasonable to believe upper management at NUMMI knew about this stop order earlier than the public announcement was made,” said acting Chairman Barry Broad. “In turn, NUMMI should have stopped training at ETP’s expense.”

Broad noted that over the last 26 years, the panel has given New United Motors a total of $18.5 million in training support through direct contracts with the company.