Toyota Closes Last Factory In California

Little wonder socialism doesn't work - taking from the productive and giving it to the unproductive is, ah, unproductive. Unions, for the most part, are a hindrance to productivity and will, in the end, destroy the very thing that they want more than anything else, a total worker base that is subservient to them. Why, you ask? Easy.

The unions will destroy not only the worker base through wages and benefit demands, but they will destroy the environment that they exist in at the same time. State governments are going broke under the strain of union contracts and other socialist agendas.

Sweetheart deals that the politicians and union bosses thought would always keep them in power have come full circle. Now there is no money left to line each others pockets. And guess who looses the most? da!

But wait, maybe there is hope yet - the conservative base was a sleeping giant but now is starting to waken to this insanity. Just maybe the people will find they have had enough and throw the bums out. I sure hope so -

Keep the faith


Toyota commits a rare and brave act — it decides to close an auto plant.·
By HOLMAN W. JENKINS, JR.


Toyota has done a strange thing. It has decided to close an auto factory, the last auto factory in California. Local politicians pleaded. They wept. They offered payola from their depleted state and local coffers. But not even the Terminator could change Toyota's mind.


Hooray for Toyota. However sad for workers, the company's decision is a brave one, and a rare one. Autos are an industry that, for decades, has not been able to rationally restructure itself to provide a competitive return to investors. Politicians won't allow it. They wouldn't permit the necessary short-term job loss. The result, finally, is what we see today: a global auto sector increasingly dependent on taxpayer subsides.

More notable still, Toyota is not doing away with just any auto factory, but with a landmark joint venture between Toyota and GM until GM bailed this year amid its bankruptcy ordeal.

Nummi, short for New United Motor Manufacturing Inc. and born in 1984, was heralded as a way to introduce GM to Japanese-style "lean production" while introducing Toyota to the doughty U.S. auto worker.

Never mind that it never made much money, Nummi starred in countless business school studies as an example of "transformation," "collaboration" and "win-win." In fact, Nummi was a political operation from day one. Toyota at the time had no U.S. production and had just been slammed by a protectionist "voluntary" quota on cars imported from Japan. The plant also helped it end-run Washington's 25% duty in imported pickups.

In return, the joint-venture was designed to help GM off the wicket of its unwise promise to pay wages and benefits to workers even when it had no jobs for them. As this newspaper reported in 1992: "By agreeing to provide jobs for laid-off GM workers, Toyota could help insulate itself from political attacks. To this end, Toyota already has stepped up purchases of GM-made vehicle parts." Even in recent years, Nummi employed twice as many workers as it really needed. Toyota chief executive Akio Toyoda, a grandson of the company's founder, cut his own teeth at Nummi in the 1990s.

Yet, in his decision to close the plant, he was signaling something more than just a hard-headed unwillingness to keep playing sugar daddy to the UAW. The world had changed. Toyota suddenly finds itself rushing to cut costs and make other market-minded adjustments while many of its competitors are being propped up by government handouts.

Take another property cast loose in the GM bankruptcy, its European affiliate Opel-Vauxhall. It will be "sold" to a Canadian-Russian joint venture, but the German taxpayer will be taking all the risk.

Opel, all agree, is too small to have a future, because it won't be able to afford the necessary technology to compete in the highly advanced European Union marketplace. Of two bidders, one acknowledged as much and told German Chancellor Angela Merkel that he frankly was interested only because the government was shouldering the potential losses. She chose the other bidder, for whom the same is also true, but who was polite enough to blow smoke about believing in the future of the Opel "brand."

Opel might have remained useful to GM, were GM allowed to slash costs and employment. But that was not Ms. Merkel's agenda. She reportedly strongly pressured the Obama administration to pressure GM to go through with the sale in advance of last week's German elections. There you have the still-unfolding disaster of the developed world's auto market writ small.

Protectionism is never about "saving jobs," but about saving specific jobs of politically useful groups. Ms. Merkel's steps may well cause a blow-up in the EU, given her insistence that Opel's German plants be protected at the expense of plants in Belgium and Spain. Likewise, California is not up for grabs politically, unlike other states where the UAW is powerful. So the union, having already received countless favors from the Obama administration, chooses to spend its ammunition elsewhere, partly because it never liked the Nummi idea of "lean manufacturing" in the first place.

Mr. Obama himself continues to whistle past the irreconcilability of his vast investment of government money to make GM and Chrysler "self sustaining" while simultaneously laying heavy mandates on them to build "green cars." It will be a miracle if the contradiction does not manifest itself in overt or covert protectionist interventions in the years ahead.

And here's why it matters to you: Bankers will get the blame, but behavior like this is becoming the bigger drag as the world economy tries to climb out of a hole.