NUMMI employees may face layoffs
FREMONT, CA (KGO) -- The downturn in Detroit is beginning to hit the Bay Area. Workers at the Bay Area's only auto plant are being warned of possible cutbacks.
General Motors appears on the brink of collapse: It lost $2.5 billion last quarter. GM also spent nearly $7 billion in cash, which means the auto-maker could run out of money in the next few months.
Ford spent $7.7 billion in cash but its losses were smaller and ford seems to have better credit.
Workers at the New United Motor Manufacturing Inc. plant in Fremont are understandably worried.
It could mean that by early next year about a 1,000 workers won't be reporting for swing shift to make Tacoma pickups.
In a memo to workers on Friday, union officials said: "We're also informed that, due to recent cuts in sales and orders NUMMI has been forced to cut back production until further notice."
And while GM is gasping for air, its NUMMI joint venture partner, Toyota, has seen its quarterly profits drop 69 percent.
NUMMI has been jointly owned and operated for 20 years by GM and Toyota, making the Pontiac Vibe, Toyota Corolla and the Toyota Tacoma.
However, it's time to face reality.
"GM is in real danger of bankruptcy," said trader Dave Henderson.
The assembly line workers are represented by the United Auto Workers Union.
The leadership of Local 2244 has been in closed-door meetings all day and their contract specifies no layoffs. While not confirmed yet, employees hear what might happen.
"What they're going to do is disperse everybody throughout the rest of the plant, give everybody cross-training on new jobs," said NUMMI employee Joe Haley.
"Is it pins and needles time? Are you still concerned?" asked ABC7's Moneyscope reporter David Louie.
"Well, it's pins and needles because the economy is so bad anyways," said Haley.
NUMMI is not giving interviews or returning calls.
The union says the truck line shutdown could happen in January or February. However, other options are being considered.
Entire families could be impacted.
"My whole family, both my husband and I are in this industry, pretty much all my family has worked for NUMMI, and we're just wondering if we're going to be able to have jobs over the next year," said NUMMI employee Angela Palacios.
Only nine months ago, I sat down with gm CEO Rick Wagoner. He was optimistic about GM shifting to alternative fuels.
There was even speculation that NUMMI might build a green tech model. Now, GM's survival is in doubt.
Ironically, a new $10 million Infiniti dealership opened in San Jose in the midst of a severe economic slump. Beshoff Infiniti is convinced there are buyers.
"We believe that the demand for cars right now is much greater than what's actually happening. As confidence comes back, we're going to have some pent-up demand," said Beshoff Infiniti General Manager Brian Aghajani.
As Detroit struggles to survive, Silicon Valley leaders say they shed no tears because the auto industry resisted clean technology.
"Detroit has been slow to embrace that, I fault them for that. Silicon Valley is a place that gets it," said Joint Venture Silicon Valley CEO Russell Hancock.
There are tens of thousands of additional jobs on the line besides the 5,000 at NUMMI. There are over 1,000 suppliers in California that provide parts. They in turn employ 50,000 people.
business, david louie
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