BILL ANALYSIS
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THIRD READING
Bill No: ACR 85
Author: Torrico (D), et al
Amended: 7/24/09 in Assembly
Vote: 21
WITHOUT REFERENCE TO COMMITTEE
ASSEMBLY FLOOR : Read and adopted, 7/24/09
SUBJECT : New United Motor Manufacturing, Inc
SOURCE : Author
DIGEST : This resolution memorializes the Legislatures
intent to take swift and decisive action to protect
California workers and industries including utilizing its
vested powers to keep the New United Motor Manufacturing
Inc. facility open.
ANALYSIS : Existing law authorizes a variety of economic
and workforce development incentives including, but not
limited to:
1. Designating an area as an enterprise zone and other
geographically targeted economic development area.
2. Designating an area as a Free Trade Zone.
3. Offering preferences for state procurement contracts.
CONTINUED
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4. Providing funding for workforce training.
5. Authorizing income tax credits.
6. Streamlining state permitting requirements.
Comments
The purpose of this resolution is to formally recognize the
Legislature's intent and desire to use its vested powers to
retain the last auto manufacturing plant in California. As
part of its bankruptcy proceedings, General Motors (GM) is
ending its 25-year joint venture with Toyota Motor
Corporation (Toyota) at the New United Motor Manufacturing
Inc. (NUMMI). Given the current global economic situation
and Toyota's reported $4.4 billion year-end loss, Toyota is
also considering whether it will abandon the 380-acre NUMMI
facility in Fremont, California.
Should NUMMI close, thousands of workers would become
unemployed at NUMMI and in the various supply houses that
support the plant. According to news reports, California
officials have been in contact with Toyota and letters have
been written to Washington D.C. regarding the federal
government's majority investor position at GM and the
potential impact the NUMMI closure would have on
California.
When fully operational, the NUMMI facility produces 250,000
cars and 170,000 trucks on an annual basis including the
Pontiac Vibe, the Toyota Corolla and the Toyota Tacoma.
Operations at the facility are supported by 4,700 plant
workers and 3,600 North American suppliers, 1,000 of which,
are located in California. The 1,000 NUMMI suppliers,
vendors and small-parts manufacturers in California employ
approximately 15,000 workers and provide $523 million in
annual payroll and benefits.
Background
California once boasted eight automobile manufacturing
plants within its borders, and today the one remaining
automobile manufacturing plant in the western United States
resides in Fremont, California.
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General Motors recently declared bankruptcy, thereby
relinquishing its shares in NUMMI to Toyota or any other
entity willing to purchase those shares. The departure of
General Motors from the joint venture may compel Toyota to
close NUMMI.
The closure of NUMMI would cause destructive reverberations
throughout California's economy, and the loss of NUMMI from
California would have a longstanding and devastating impact
on the people of the state.
This resolution resolves that it is the Legislature's
priority to take swift and decisive action to protect its
workers and industries, and the Legislature recognizes the
necessity to utilize its vested powers to keep NUMMI in
California.
FISCAL EFFECT : Fiscal Com.: No
JJA:mw 8/19/09 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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