California Bankruptcy Attorney Analyzes Closure of NUMMI Toyota Factory in Freemont California

Posted by: California Bankruptcy Attorney on Mar 12, 2010 Print PDF

As a bankruptcy lawyer in California, there is perhaps no more volatile combination than what could potentially occur in Freemont, CA when the NUMMI plant closes on March 31st.  History is always the best reference point when examining the profound effect that closing a plant, which is the centerpiece of the community, will have.  We need look back no further than the GM plant closings in Flint, Michigan or Moraine, Ohio for what the future in Freemont might look like.  When GM closed the Moraine plant, 5000 workers were affected (the approximate number in Freemont).  Soon after, homes were listed for sale (people relocating), the poverty rate was 30% more than the states average, and most people were left with two distasteful options:  leave town, or accept a lower standard of living.  The city of Flint is now suffering so greatly the Chairman of the Board of Commissioners, Jaime Curtis, said this:  “Flint is in such dire straits (the only option might be) to go into Chapter 9 and get relief from those contracts.”.  Chapter 9 Bankruptcy is reserved for municipalities and since 1934 there have only been 600 cases, but it may become reality in Flint later this year.  Currently in Freemont there are 5,000 auto workers set to be laid off, 1,500 teamsters, and roughly 50,000 support business employees whose business is dependent on the NUMMI plant (vendors, suppliers, etc).  The average production wage for these employees is around $65k, still, when the workers in Flint and Moraine where in the same position a few years ago most of these workers said they were no more than 2 weeks without pay away from financial ruin.  With a significantly higher cost of living in the State of California, the outlook for Freemont workers without another business to take Toyota’s place is not bright.  Using history has the guide once again, 28 years ago in Freemont GM closed its doors and two years later Toyota took its place providing the community with many needed jobs and infused the area with capitol.  With even a two year gap between businesses (Toyota-to-the-Next Company…assuming one relocates to Freemont) most of the workers would not survive financially.  Prior to arriving at that point, and long before considering touching ones protected retirement funds for survival,  I encourage all affected by NUMMI to investigate bankruptcy and its protections with an experienced attorney.  History is our best indicator for the future, and if these communities’ local governments are considering Bankruptcy and its protections certainly it is a valid discussion for the people directly affected.

 If you have any more questions regarding bankruptcy or wanted to get your case started and wipe out your debt please give us a call (877) 427-2752.


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