Toyota offers workers bonuses at California factory slated to close

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Amid protests from state officials, Toyota Motor Corp. moved ahead Wednesday with plans to close a Fremont production plant, funding an average of $50,000 in bonuses to assembly workers who remain on their jobs through the month.

In all, the automaker said it was offering $250 million that will go toward bonuses to the nearly 5,000 workers at the New United Motor Manufacturing Inc. plant, known as NUMMI, which is slated to end production April 1. The factory, the last car factory in the state, is a 50-50 joint venture with General Motors Corp. which pulled out of the partnership in August because of its bankruptcy filing.

A firm that is overseeing the liquidation of GM’s assets related to its bankruptcy has said in the past that it would not extend financial aid or pay severance to NUMMI workers.


Toyota said NUMMI is in talks with the United Auto Workers union over how to distribute the bonus, which the automaker described as a “reward” to workers for staying on the job. Toyota does not have a legal obligation to give the money, but it is doing so in the hopes of a “smooth transition,” a Toyota spokesman said.

The federal Pension Benefit Guaranty Corp. said Wednesday that it would take responsibility for part of the underfunded pension plan covering more than 5,800 NUMMI employees and retirees.

The plan, which is only partially funded, has assets of $161 million compared with $292 million in benefit liabilities, according to estimates. The agency expects to fill all but $5 million of the gap.

“Looking ahead, Toyota remains strongly committed to maintaining a substantial manufacturing presence in the U.S. and will continue to employ thousands of people in California,” Jim Wiseman, group vice president of Toyota Motor North America said. Separately, California Treasurer Bill Lockyer, a Prius driver, derided Toyota’s decision.

The closure would cause a domino effect that would ultimately put 25,000 Californians out of work, according to a report initiated by Lockyer and released Wednesday. Replacing the jobs would cost taxpayers $2.3 billion and the state and localities would lose $90 million a year in revenue over the next decade.

“This decision to close the plant is a choice Toyota makes -- it’s not a necessity,” Lockyer said in a conference call. “This is and can continue to be a very successful manufacturing site.”