More evidence that high taxes and unionisation aren’t the economic panaceia that left-wingers seem to think they are. Toyota has announced that it will be closing down its (formerly) jointly operated NUMMI plant – where the Tacoma is manufactured – in Fremont, California and is moving the production to San Antonio, Texas.
Toyota Motor Corp. officially confirmed Thursday that it will relocate production of the Tacoma pickup from a plant in Northern California to its state-of-the-art manufacturing facility in San Antonio by next summer.
The announcement came hours after the Japanese automaker ended its relationship with a joint venture plant in the San Francisco Bay area as part of an effort to reduce excess production capacity at plants around the globe and return to profitability.
As part of the plan to shift Tacoma production to San Antonio, Toyota will stop making vehicles at the New United Motor Manufacturing Inc. plant — its first manufacturing facility in the United States, which started in 1984 as a 50-50 business deal with General Motors — in March 2010.
San Antonio and Bexar County officials estimate 100,000 Tacomas, about 50,000 less than NUMMI is capable of producing at peak capacity, will be pumped out annually following a $100 million retooling at Toyota’s San Antonio campus.
The Tacoma line not only will diversify the plant with a second vehicle but also is expected to add as many as 1,100 new jobs to the facility over time and will rev its 21 on-site suppliers back up to capacity and employ hundreds of new workers.
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“This is really a big shot in the arm, especially when you consider that the jobs multiplier is five, and I think that is conservative. By next year, we’ll be running pretty darn strong. We’re already doing well relative to other parts of the country,” Wolff said.
Unfortunately, California stands to lose thousands of well-paying jobs, not only from the NUMMI plant closing, but also from the associated economic ripples that will hit everything from local parts suppliers to local businesses that benefited from the patronage of people employed at the plant. But like Judge Wolff said, San Antonio (and Texas in general) are doing well relative to other parts of the country – in large part because the lower taxes and non-unionised workforce make the cost of business in Texas so much lower than in California and other Blue parts of the country. Or, as an article about the plant closure in the LA Times quoted the head of the Automotive Consulting Group as saying,
The Fremont plant, which makes Corolla compact cars and Tacoma pickups for Toyota and, until last week, Pontiac Vibe hatchbacks for GM, was the Japanese company’s only U.S. auto plant with a union workforce. As Japanese and German automakers opened vehicle production to the U.S. beginning in the 1980s, they often have opted for states such as Kentucky, Texas and Alabama, where union shops are more rare.
“It just made sense for Toyota to pull the plug,” said Dennis Virag, president of the Automotive Consulting Group in Ann Arbor, Mich. “When you look at states like Kentucky and Tennessee, California just isn’t competitive in manufacturing with its taxes, regulations and overall cost of doing business.”
Exactly. When you jack taxes up high and allow unions to force workers to join a shop, you get higher costs of doing business and you drive away jobs, usually to low-tax, right-to-work Southern states. Net result in this case? California loses up to 40,000 jobs (per Dianne Feinstein in the LA Times article, factoring in economic ripple effects), while Texas gains a bunch of jobs. California loses tens of millions spent in its economy, while Texas gains it. California’s already high unemployment rate gets higher, while Texas’ relatively low rate gets lower.
This is just one more reason why it makes sense to elect conservatives and not Leftists.
