Following Toyota’s decision to stop production at the New United Motor Manufacturing Inc. plant in Freemont, California from next March, the carmaker is facing logistics challenges at its San Antonio plant in Texas where Tacoma production will transfer for production next year.
The company is investing around $100m to upgrade the plant and is planning to produce 100,000 Tacomas per year, alongside its Tundra output, by summer 2010. Now it must plan how to incorporate the Tacoma into the existing Tundra production line and handle the supply of parts. This includes deciding whether the existing on-site supplier base of 21 companies can deal with the new work load or if the supply chain will have to be extended to include additional suppliers. The official statement from Toyota said that the existing supply base would meet most if not all of the demands made by the addition of Tacoma production.
Those companies formerly supplying Tacoma production at the NUMMI plant now have to decide whether to move operations to Texas or stay in California and ship components from there – good business for logistics service providers but a questionable outcome giving the increase in cost such delivery would entail compared to supply from the local base. Toyota’s established Tacoma parts suppliers in Mexico are likely to benefit as the company extends its manufacturing corridor there.
The closure of the NUMMI facility was significant in that the Japanese carmaker has never closed a plant. That move was stimulated by GM’s withdrawal from the joint venture as part of its bankruptcy proceedings.
Toyota’s Executive Vice President Atsushi Niimi told reporters last Thursday: “In the light of current and anticipated market conditions, we have determined that over the mid- to long term it just wou ld not be economically viable to continue the production contract with NUMMI.”
The NUMMI plant also made the Corolla models. These will now be sourced from Toyota’s Canadian plant in Cambridge, Ontario, as well as from Japan to meet near-term demand from dealers in the US.
NUMMI was the last carmaking plant in operation in California.