Did California’s Excessive Regulations and Taxes Kill NUMMI?
Jason Lancaster | Sep 02, 2009 | Comments 19
The closure of NUMMI signifies a new era for California – for the first time in 95 years, California will not host a vehicle production plant for a major auto manufacturer. When NUMMI closes in March, 2010, California’s only notable auto plant will make only a few thousand Tesla all-electric roadsters per year.
The very first auto plant in California, opened by Henry Ford in 1914
California’s first auto plant was Ford Motor Company’s Los Angeles assembly plant, opened in 1914. Ford opened another plant in Long Beach in 1930, which operated until 1959. Ford’s last plant in California was the “Pico Rivera” plant, which was closed in 1981. General Motors has also had a presence in California for the better part of 73 years. The South Gate plant, opened all the way back in 1936, was likely GM’s first California plant. The last GM car made in California (the Pontiac Vibe) rolled off the NUMMI assembly line just a few weeks ago.
The question: Is California the problem? After all, automakers have been building and re-tooling plants elsewhere in the USA since the auto industry began. Ford’s Rouge plant, which opened in 1918, is still in operation. Toyota, Honda, Mercedes, and VW have all built (or are planning to open) new auto plants in the USA very recently, yet none of these plants are in California.
California is the largest auto market in the United States
Considering that California is the largest auto market in the United States (one of the largest auto markets in the world, in fact), wouldn’t it make sense to build cars in California? After all, establishing a presence in California might give a manufacturer a leg up in terms of local sales and market share…yet California has no auto plants and no prospects.
Perhaps California’s laws are to blame. From California’s strict auto emissions regulations (including efforts to surpass federal regulations) to the California Air Resources Board (CARB) cap-and-trade program, California makes manufacturing challenging.
California’s labor laws are no picnic for employers either – some argue that California’s emphasis on “progressive” policies actually hurt employees more than help them. Job seekers, for example, have struggled to find work in California for the last few years, and as of June 2009 California has the 4th highest unemployment rate in the United States.
According to the Tax Foundation’s 2009 State Business Tax Climate Index (pdf), California is one of the 10 worst states for business taxes in the US (ranking 48th overall). Chief Executive magazine’s 2009 survey of 543 CEO’s rated California as the worst state in the US for jobs and business growth. Forbes, which conducts an annual “Best States For Business” study has found that California ranks 45th in “regulatory environment” and last overall in “business costs.”
While there’s a lot of damning evidence here, some might say that the problem isn’t with California. The argument goes that “if the rest of the United States were as progressive as California, our costs and regulations wouldn’t be so high.” Perhaps.
Either way, one thing is clear. In March 2010, California all but loses the auto industry. No matter how you look at it, that’s bad for California.
What do you think – did California kill their auto industry?
Filed Under: Auto News
Governor Arnie did it.
They don’t call him ‘The Terminator’ for nothing you know.
He should have stuck with acting, not politicking.
mk- LOL – he’s still my hero because he saved us from the machines…
California auto manufacturing…YOU ARE TERMINATED!!!
NUMMInated?
Anyone heard if Toyota is closing TABC? If they’re not, then the auto industry is not entirely dead in CA, but almost…
Answering the title alone…..clear YES! Now I’ll go read the story. LOL
Jeremy – You are killing it – funny comments are your specialty.
Brian – I stand corrected. TABC employs 511 Toyota employees – they don’t build cars, but they build car parts. There’s also the Tesla roadster and plans for a larger Tesla production facility for sedans. So they technically still have plants – but it’s getting pretty slim for the largest car market in the USA.
I am a former TABC stamping dept leadman of 16yrs.
I took the buy out pkg and opened and operated a cybercafe with the funds
that were given to me to part ways.I was there from 12/92 to 07/08
And I regret it now.I had to close my business thanks so much to the local economy..even Starbucks is closing here.I am also sad knowing that I’ll never see my TABC/Teamster brothers again except only by accident.I am now struggling like I never thought I would.I’m scared folks.I also sadly predicted that in 2013 TABC will be no more but many commented that I didnt know what I was talking about.Nummi was a great plant.My heart goes out to those workers and their families.The state assembly of California screwed things up.
All those amendments and bylaws didnt do commerce one bit of good.
Sorry to hear that Mike. Wish you the best and hope things get better.
Mike – Good luck man – best wishes.
I’m here once again in front of the PC half asleep.
My present report on TABC comes from the friends I left behind.
They tell me that many teamembers have signed their livelyhoods away by
accepting more of those so-called “transition to the future”packages.
I mentioned before that I took mine for fear of loosing what hearing I have left.I’ll just add to that and say you have to try Costcos hearing dept their great.For almost 16 years I was part of a great company.They signed my checks that provided my wife and sons with a nice life.And once a year we would leave the PPE behind and get together at Knotts Berry Farm in Buena Park,Ca .I knew that the tools I learned as a leadman would go far,I opened my own business.Toyota/Tema/Tabc will do what it must to economically adjust to the changing times in order to stay in the life raft.
Mike. Here did Toyota send your job too? Some people seem to forget that the people who worked there had names and lives. Best of luck to you.
And now were hearing that the responsible parties who are in charge of those
little toyota black boxes,that are found by trained engineers either erased or replaced info vital to individual post accident investigations.I really doubt that Mr.Toyoda knew about it.If thats the case……..
He will please most critics and hire an outside team made up of both American and Japanese investigators.And through the process of elimination find and not just prosecute but jail and fine the perpetrators.And then Implement a standard of quality with the likes never seen before.
And the second thing that really bothers me is the Japanese doubting the findings of an American with a PHD in electronics that showed anyone on national television ,findings that moreless remove any doubt that there is probable cause of those accelerator accidents.Give me a break.
no one in their right mind would or should critic a person with a PHD
unless in this case the Japanese have too much Japanese pride
which in the end…..kills more innocent toyota owners.
How about Toyota’s putting people in jail for vehicular manslaughter. I’m with you Mike!
Mike – If you’re speaking about Dan Gilbert, his doctorate is in workforce education, not engineering. The guy has no business “proving” that Toyota’s electronic systems are at fault. Do a few searches on Google and you’ll see – Dan Gilbert is not an expert.
JASON>>>
Gilbert has no business proving that he has enough credible education to show theories?
says who?
Mike – I’m not trying to argue with you. Here are some links you can read yourself to find out the real deal on Gilbert:
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This video is a little biased, but it’s technically accurate and very enlightening: http://www.youtube.com/user/ca.....3gQWGZ8uBw
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The blogger behind this website is an actual working auto engineer (he works for a domestic automaker): http://theautoprophet.blogspot.....essor.html
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For the record, it’s certainly *possible* Toyota’s electronics are somehow faulty, but I think it’s not very *probable*. Gilbert might be a great educator, but the scenario he concocted for ABC news is laughable. Anyone with some wire and an extra power lead can make a circuit board fail.
for the record.true,thats a factor not to be left out