The End of an Era

Toyota annouced that it will close New United Motors Manufacturing (Nuumi), following the decision by GM not to continue in the joint venture. Nuumi is special because it was Toyota's beachhead in 1984 to learn how to make cars with unionized labor and sell them in the United States. GM joined the venture to learn how to make small engine cars. We know the rest of the story.

Toyota learned well, none of its other plants in the U.S. has ever been successfully organized. The lessons - treat your employees with respect, pay them a decent wage, produce a product no one can refuse and thus guarantee employment for more than two decades.

Typical of the UAW, they accuse Toyota of breaking a trust, ignoring the fact that GM's pullout precipitated Toyota's decision. However, despite the current downtown and inevitable plant closures, Toyota continues to be an employer of choice in the U.S. automotive industry, evidenced by the continued failure of the UAW to organize its workers.

As a side note, the Corolla, produced at NUUMI, is the most popular car in the Cash for Clunkers program. The Corolla is now likely to be produced in Kentucy; demonstrating that productive capacity will migrate to more efficient locales. A reason why market friendly states like Kentucky are prospering at the expense of labor friendly California.