Despite protests from state officials and employees, the Fremont-based Toyota manufacturing plant known as NUMMI (New United Motor Manufacturing Inc.) is moving ahead with plans to close the production facility as of April 1, 2010. In lieu of severance, the plant is offering workers large bonuses (up to $50,000) to stay on the job until the end of the month. Labor unions are discussing how these bonuses will be paid out and how pension plans will be covered for qualified workers after their employment is terminated.
The reason for the plant closure is becoming all too familiar to many Modesto area businesses: bankruptcy. NUMMI was a 50-50 venture between Toyota and General Motors Corporation, and it must shut down as a result of GM's bankruptcy filing and subsequent required liquidation of essential assets. This factory is the last remaining car production plant in the state of California. After it is closed, all major operations will be located out of state, leaving a large gap in the production industry statewide.
No matter if companies are the size of GM or simply mom-and-pop corner stores, commercial bankruptcy filings in the Modesto area have far-reaching impacts. As a result, city and state revenues decline and unemployment levels rise. According to the LA Times, this particular plant closure will essentially put 25,000 California residents out of work and cost taxpayers $2.3 billion in job-replacement costs. Local communities could stand to lose $90 million a year in revenue over the next 10 years.
If you own a Modesto business that is struggling, a bankruptcy lawyer can structure a plan for you that will help relieve your financial troubles to keep you in business. You can file for Chapter 7, 11 or 13 bankruptcy, depending on your situation. Farmers can take advantage of Chapter 12 bankruptcy to reorganize agricultural expenses.
