Tesla to partner with Toyota to manufacture electric cars at former NUMMI plant


By Bay City News Service

Gov. Arnold Schwarzenegger announced Thursday (May 20) that Toyota Motor Corp. will be teaming up with Tesla Motors to build electric cars at the former New United Motor Manufacturing Inc. plant in Fremont.

The NUMMI plant, a joint venture between General Motors and Toyota, closed on April 1, roughly nine months after GM announced its withdrawal from the partnership in August 2009.

The closure left 4,700 employees jobless and affected another estimated 25,000 people working at suppliers around the state that do business with NUMMI, according to a study commissioned by state Treasurer Bill Lockyer.

"Now we can slowly bring them back because of this great partnership," Schwarzenegger said at a news conference Thursday.

Tesla CEO Elon Musk and Toyota CEO Akio Toyoda joined the governor Thursday to announce the partnership. Mr. Musk said they have already begun hiring back a lot of NUMMI workers.

"We expect to hire many more in the future," he said, adding they are currently hiring about 50 new employees per month.

Today's news came as a shock to Mario Guerra, a city councilman and former mayor of the Southern California city of Downey, who said his city had been in negotiations with Tesla since early 2009 to host the plant. Mr. Guerra said Tesla had been making promises to Downey all the way up to Thursday morning.

"We feel shafted, and we feel that they were disingenuous," he said.

Mr. Guerra said the City Council was going to lease property that once hosted a NASA manufacturing plant.

After the City Council passed an agreement meant to further lure Tesla in November, Mr. Guerra was quoted in news media as saying that the deal was "99.9 percent done." The city was expecting to see from 1,200 to 4,000 new jobs from the deal.

They learned that Tesla would be partnering with Toyota and producing at the NUMMI plant instead around midday Thursday, Mr. Guerra said.

Mr. Musk said although it is true that the deal was only solidified in the past few days, Tesla was clear with Downey that they were still negotiating with NUMMI. "I wouldn't say it's quite accurate to say they had no idea," he said.

Discussions are still at an early stage of exactly what the plant will produce, but Mr. Musk did imply that at least part of the NUMMI plant will be used to produce their new Model S, a fully electric four-door sedan that was developed with help from loans from the Department of Energy. "We're expecting production of model S to start in 2012," he said.

Fremont Mayor Bob Wasserman said he's "very happy" that Tesla will be making electric vehicles at the NUMMI plant. "We want to lead in making our cities green and our state green and this is a big step in that direction," he said.

But Wasserman said the city is going to "continue to plan to see what the total property will be used for," as there is unused land adjacent to the NUMMI site."

"Manufacturing is fine, but we don't want to be limited to manufacturing,'' he said.

Alameda County Supervisor Keith Carson, who is president of the East Bay Economic Development Alliance and has worked extensively on finding a new tenant at the NUMMI facility, said the announcement "is good news" and "I'm excited about it.''

Although Tesla said its new production might create about 1,000 jobs, which is much less than the approximately 5,000 jobs at the site before, Mr. Carson said if Tesla is successful it could add more jobs in the future. And he said keeping the plant going will help save many jobs at suppliers who did business with NUMMI.

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