United Auto Workers union officials are rejoicing today asMotor Corp.’s shuttered New United Motor Mfg. Inc. plant in California appears to have been given new life.
Analysts tell Ward’s they believe returning workers once again will vote for union representation. A new organizational drive would be necessary, a senior UAW official tells Ward’s, because NUMMI’s closure did not come with a successor agreement.
Electric-vehicle makerMotors Inc. said yesterday it would purchase a portion of the NUMMI complex to manufacture its upcoming $50,000 Model S electric sedan due in 2012.
Separately,is taking a $50 million stake in to jointly develop EV technology.
“It was a UAW plant to begin with, and federal law prohibits a company from discriminating against organized labor,” Roland Zullo, a labor expert and research scientist at the University of Michigan, tells Ward’s.
Struggling Toyota also regains tremendous goodwill from unlocking NUMMI and will not risk backlash from opposing union reorganization, he adds.
Harley Shaiken, a labor and economic expert at the University of California, Berkeley, says while Tesla CEO Elon Musk did not give the UAW a ringing endorsement during his press conference Thursday – saying he would remain neutral on the issue of unionization – three factors swing heavily in the UAW’s favor.
First, Toyota CEO Akio Toyoda spoke yesterday of his personal attachment to the facility, a relationship that dates back some 25 very successful years.
Second, NUMMI will hire heavily from a pool of former plant workers with close union ties.
Third, Shaiken reiterates neither Toyota nor Tesla will want to risk potential backlash. “The reality is it is likely the UAW will represent workers at the plant,” he says.
A UAW official tells Ward’s the union has a representative “waiting in the wings” to help reorganize NUMMI should workers invite the union in.
Indeed, UAW Local 2244 President Sergio Santos has been quoted in media reports with a tone of confidence, assuming NUMMI’s former workers will again want to be unionized.
However, the UAW, angry with Toyota for closing the plant, earlier this year undertook tactics that reportedly displeased some union members.
A series of Youtube videos recorded during a chaotic January meeting show several NUMMI workers verbally attacking the plant’s UAW leadership. Part of the workers’ anger reportedly stemmed from the UAW’s harsh stance against Toyota, but not GM.
The UAW also demonstrated at Toyota dealerships and regional auto shows in protest of NUMMI’s closure. And together with the Teamsters, the union sent a press release to the media in January calling Toyota “a danger to America.”
But none of that hostility was present in the UAW’s comments today.
“We appreciate the leadership demonstrated by Akio Toyoda, CEO of Toyota, and Tesla CEO Elon Musk by investing in this community and worksite,” UAW President Ron Gettelfinger says in a statement.
Gettelfinger also expresses hope the auto makers will consider UAW labor first when hiring begins.
The last car, a Toyota Corolla, rolled off the line at NUMMI March 31.
Co. last year, as part of its restructuring, stopped taking Pontiac Vibe output from the Fremont, CA, facility, which Toyota blamed for its own decision to pull out.
The Fremont plant was represented by the UAW prior to the establishment of Toyota and GM’s 1984 joint venture, when the operation was wholly owned by GM.
If Musk opens the door to the union, it would set a pattern in the electric-vehicle industry, givenAutomotive Inc. founder Henrik Fisker says he welcomes a UAW-represented workforce at the auto maker’s plant in Wilmington, DE.
purchased the longtime unionized facitlity from GM to build a sub-$40,000 plug-in-hybrid sedan beginning in 2012 to complement its pricey Karma hybrid sports car. As early as 2016, the hybrid sedan could be joined by a second-generation Karma set to launch this year from a Valmet Automotive plant in Finland.
Tesla reportedly vows to build about 20,000 units annually at NUMMI, far below the plant’s capacity. Some 400,000 vehicles were built there in calendar 2006.
It is unclear if Toyota vehicles again will be assembled on NUMMI lines, Toyota spokesman John Hanson says.
“The key issue is (Tesla and Toyota) intend to form a joint-development team, and they plan to develop electric vehicles, components, and production system and engineering support,” Hanson says. “Toyota production system and engineering support will be part of this as needed or on demand.”
The partnership with Tesla leaves the door open for the upstart’s technology to be integrated into Toyota’s nearer-term products, possibly as soon as 2012 when the Japanese auto maker is due to bring to market a battery-powered EV, Hanson says.
“Things change,” he says when asked if the 2012 commuter EV, a version of the auto maker’s subcompact iQ, will be entirely Toyota technology.
While there are many unresolved facets of the new relationship, which came together in about one month’s time, one certainty is Toyota will continue its own EV development independent of Tesla.
“I don’t know to what extent Tesla will have awareness and complete transparency with everything Toyota does with EVs,” Hanson says. “My guess is there will be a considerable amount of Toyota manufacturing process and technical support that will be a major part of this partnership.”
Toyota, the global sales leader of hybrid-electric vehicles, has not been a strong proponent of battery EVs, at least compared with GM (Volt) andMotor Co. Ltd. (Leaf). Both will debut their respective EVs this year in the U.S.
“What we’ve said is we’re not against battery electrics, and buying into Tesla is evidence of that,” Hanson says. “It’s not like Tesla has come up with something brand new or there’s a huge breakthrough that’s going to help us bring thousands of BEVs to market – it’s that there is a place for it.”
“We see an opportunity here with Tesla. I believe Akio (Toyoda) truly wants to align himself with companies with that kind of focus and youth and excitement. I think that was a big part of it.”
AG, which holds a stake in Tesla, takes no issue with the EV maker’s new relationship with Toyota.
spokeswoman Julia Engelhardt tells Ward’s the German auto maker already is getting Tesla-assembled lithium-ion batteries for its Smart EV, “so we are about a year ahead of Toyota.”
Daimler acquired a 10% stake in Tesla in May 2009 but sold 40% of that holding to Aabar Investments PJSC in July. Engelhardt says Daimler was kept apprised of the Telsa-Toyota negotiations and has no plans to divest its current stake in Tesla as a result of the deal.
Hanson is unaware of any plans for Toyota to take a bigger stake in Tesla near term. The EV car maker’s upcoming initial public offering, where it hopes to raise $100 million, as well as Toyota’s $50 million outlay – equivalent to a 2.5% share – should be sufficient to get production at NUMMI going soon, he says.
Tesla reportedly also plans to use its $465 million U.S. government loan to build at NUMMI.
– with Dave Zoia