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Auto Suppliers Face an Uncertain Life After Nummi

HAYWARD — When Toyota Motor Corp. closes its Fremont factory known as Nummi in April, it spells the end of California’s last auto plant. For Ebi Mogharei, it also means he must reinvent his own company to avoid Nummi’s fate.

Mr. Mogharei is the plant manager for Injex Industries Inc. in Hayward, which makes door panels, glove compartments and other plastic parts for the vehicles that roll out of Nummi. With the vast majority of its business coming from Nummi, Injex’s executives are now searching for customers outside the auto industry so they can save the jobs of its 400 employees after Nummi closes.

Stu Woo/The Wall Street Journal

Injex Industries plant manager Ebi Mogharei held an assist grip that Injex makes for Toyota vehicles.

“We have so many people who have been here so long,” says Mr. Mogharei, a 48-year-old Iranian immigrant. “The energy and culture that we have developed over 25 years is something that can’t be replaced overnight.”

Many suppliers like Injex are now grappling with life after New United Motor Manufacturing Inc., as the impending closure of the plant starts rippling across the Bay Area economy. Since its founding in 1984, the first-of-a-kind joint venture between Toyota and General Motors Corp. had been a steady provider of business for a long chain of suppliers. Every year, thousands of schoolchildren and others visitors flocked to see the bustling plant, which produced 430,000 cars such as Toyota Corollas, Toyota Tacomas and Pontiac Vibes at its peak in 2006.

But in July, as part of GM’s federally funded bankruptcy, GM abandoned its ownership in Nummi. Mike Goss, a Toyota spokesman, says the company would not have closed Nummi had GM remained in the partnership.

When rumors of Nummi’s closure swirled this summer, politicians such as Gov. Arnold Schwarzenegger and Sen. Dianne Feinstein urged Toyota to reconsider. But both Washington and Sacramento officials acknowledged that was a lot to ask of the company, given California’s high cost of doing business. In late August, Toyota announced Nummi would close in 2010.

The shutdown will cost 4,700 Nummi workers their jobs, and the repercussions among suppliers could be greater. While some of the plant’s 15 major local suppliers such as Mission Tool & Manufacturing Inc. in Hayward will survive by serving Toyota’s other North American factories, others, such as Toyota Tsusho America Inc. in Fremont, are planning to wind down altogether, absent new business.

Mr. Goss, the Toyota spokesman, says some of Nummi’s 25 suppliers in California will continue to serve other North American Toyota plants, but that Toyota will end its business relationship with other suppliers.

Vuteq California Corp. is among the suppliers trying to figure out post-Nummi plans. Based in Hayward, Vuteq makes interior parts for Corollas and Tacomas and employs 65 workers. “We’re trying to get some other business to keep on going, but in this economy, it’s going to be tough,” says plant manager Doc Skinner, who added that the company had some prospective new customers.

Overall, tens of thousands of people work for Nummi’s suppliers, or the suppliers of those suppliers, says Bruce Kern, executive director of the East Bay Economic Development Alliance. His organization and local-government officials say they have started to look into how they could help the affected suppliers find new business.

The effort is welcomed by Injex executives, who say they started courting new business when GM’s problems worsened. Mr. Mogharei says he now spends much of the day on the phone, pitching Injex to prospective clients in local industries such as agriculture, medical technology and solar energy.

Mr. Mogharei says Injex has injection-molding equipment that can make virtually any plastic product, such as plastic strawberry trays or solar panels. And the company also assembles and paints a wide array of products with its assembly and paint lines.

“That’s part of the image we need to change,” says Mark Petri, director of sales operations and a member of the family that founded Injex in 1984. “We’re not just an injection-molding company….If something needs to be assembled, we can assemble. We can assemble an iPhone.”

Executives at Injex, which generates more than $65 million in revenue a year, declined to be specific about what percentage of their business comes from Toyota, except to say they are almost “completely dependent” on the auto maker. Though Injex has some other current customers, Mr. Mogharei says he so far hasn’t found any substantial post-Nummi ones.

As Mr. Mogharei walked through Injex’s cavernous plant on a recent day, metal clanked and sparks flew around him. He pointed out the machines that melt plastic pellets and mold them into cup holders and other car parts. Then he stopped in front of a frame that holds pictures of 30 employees who have worked at Injex for 20 or more years.

Two of those workers are Hugo Company and Zoraida Pastor, a married couple in their late 40s who have worked at Injex for 24 years. Ms. Pastor, a group leader, says her first thought when she heard of the Nummi closure was, “How can I make the payments for my house?”

Mr. Company, a senior technician, says he felt as if Toyota “stabbed me in the back” with the Nummi closure announcement. “Nobody wants to see this place close,” he says. “We all like this job. We all want to keep working for this place.”

Though Mr. Mogharei gushed about his company’s “just-in-time” productive track record, and proudly pointed out the dozen flags hanging above the lunch-break tables that represent the countries from where his workers hail, he says he is realistic about Injex’s future. He and other company leaders have advised employees — who are mostly immigrants without college degrees — to save money in case Injex needs to cut hours or jobs.

“I’m sure I’ll find some business,” Mr. Mogharei says. “But will that be enough to save the 400 jobs?”

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