Toyota’s US unit is offering $250m to help workers at New United Motor Manufacturing Inc (NUMMI), the former California joint venture plant with General Motors marked for closure.
The automaker told AFP it had pledged the money to “fund transition support” for staff.
Go deeper with GlobalData
NUMMI production ends on 1 Apri after almost 25 years. GM involvement ended in June after it axed the Pontiac line as it emerged from bankruptcy. The Vibe was the last GM model made. Toyota plans to transfer Corolla car and Tacoma truck output to other North American plants where it has spare capacity.
“Toyota’s financial support is enabling NUMMI to offer bonuses to salaried and hourly team members who continue to produce quality vehicles for Toyota through 1 April, 2010, when Toyota’s production contract with NUMMI will end,” the company said.
The automaker said the funding was subject to ongoing negotiations between NUMMI and the United Auto Workers union. The UAW represents some workers at the Fremont plant which is Toyota’s only unionised facility in the US.
Meanwhile, the US agency that insures corporate pensions will assume the plans covering 5,800 NUMMI workers and retirees, according to Reuters.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe Pension Benefit Guaranty Corp (PBGC) said that underfunded pensions would be abandoned as a result of the facility’s closure.
The agency planned to seek permission from a federal judge in San Francisco to take over the accounts, which are traditional pensions that cover members of the United Auto Workers (UAW).
The plan is 55% funded with assets of $161m to cover liabilities of $292m, according to PBGC estimates. All but $5m of the shortfall is expected to be covered by the agency, the news agency said.
