The last automobile-manufacturing plant on the entire West Coast closed April 1. Unfortunately for the 4,700 people who worked at the joint Toyota-General Motors plant in Fremont, Calif., and the 20,000 workers at companies that supplied materials and services for the plant, it was no April Fools’ prank. They’re out of work or very likely soon will be — and for no good reason.
Much like auto manufacturers in Detroit, the plant in Fremont was hamstrung by unreasonable union contracts. Average pay on the production line was $65,000 a year, for instance. No one ought to begrudge anybody receiving a high salary for honest work, but that type of unsustainable contractual cost added too much to the price of the cars and left the plant unable to compete.
State government in California also contributed to the plant’s shutdown. California has imposed such stringent environmental controls — in the name of fighting “global warming” — that energy prices there are about double what they are in the rest of the country. As you can imagine, an auto-manufacturing plant needs a great deal of energy, and so artificially increased prices only added to the company’s financial troubles.
California’s extraordinarily heavy tax burden made it harder for the company to do business, too.
It is no coincidence that in a last-ditch effort to keep the plant running, California offered the company a package of tax cuts and reduced costs for electricity.