One of the blogs at National Review, Planet Gore on National Review, has a very short post today dealing with the fact that Toyota is closing down its California auto plant, the so-called NUMMI facility outside San Francisco. OK, so what's the big deal? Well, let's look at the reasons why:
Neither NUMMI's labor costs nor business conditions are competitive. The article explains why:
"NUMMI is Toyota's only unionized plant in the U.S. -- and that California's energy and regulatory costs (envied by the Obama administration as a national model, natch) make it prohibitively expensive to make cars -- even in Toyota's largest U.S. market."
"..The difference is, while Toyota sheds NUMMI to eliminate its only UAW plant, GM is emerging from a Democrat-arranged bankruptcy more beholden to Big Labor than ever (the union now owns 17 percent of the company."
The regulation atmosphere in California is one of many reasons the state is going bankrupt. (I have just returned from southern California and, were it not for the fiscal insanity of the state, would actually love to live there.) Toyota will continue to be profitable in the worldwide auto market--they understand how to run a business in tough economic times. The new government-owned GM has fired the executive core of the company. Had they actually wanted to make the company competitive without government subsidies, they would have taken steps to decrease union influence--not increase it. It kind of makes you wonder what the actual end game is.
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