Commerce: Toyota last week quietly announced it will shutter its famed NUMMI plant in Fremont, Calif. This should be taken as a warning: The facility had all the features of the green economy the White House wants.

The White House likes some businesses better than others. In particular, it has pushed a battery of policies designed to favor the "right" sort of businesses.

First, they should be green. They should be locally sourced. They should be high-tech and use trendy consultants. They should be organic. They should do lots of volunteering and "service" to the community. Above all, they should use union labor.

Whole Foods, where President Obama once bought his arugula, employs plenty of these modern practices.

But it would be hard to find a more perfect model of this new world of commerce envisioned by the White House than the New United Motor Manufacturing Inc. (NUMMI) auto plant in Fremont, Calif., a joint venture between Toyota and General Motors.

Since 1982, the plant has cranked out more than 5 million vehicles, including the Toyota Corolla, Pontiac Vibe and Geo Prizm.

It employs only the greenest technologies. The environmentally advanced NUMMI plant has garnered 42 environmental awards -- topping even its 32 product excellence awards.

And most of its 5,500 employees were members of the United Autoworkers Union, making an average of $65,000 a year.

But last Friday, Toyota announced that it would shut the plant and move its manufacturing operations to San Antonio, Ontario (Canada) and Japan.

What happened? A greedy Wall Street banker get them? A sudden death strike from Planet Outsourcing? Not really. The problem was a business climate that made even the greenest industry impossible.

According to Thomas Lifson, a former Harvard business professor and consultant to two of the top five global auto manufacturers (and who publishes the Web magazine American Thinker), the problem is California's difficult business environment, which exacerbates problems in a difficult economy.

"Toyota and all the auto manufacturers were overbuilt in terms of capacity because the world auto market is now smaller than it was two years ago," Lifson says.

In a bad economy, competition intensifies. Yet California's legislators, obsessed with being "green," have shown little interest in making the state competitive by lowering taxes and cutting regulations.

It was a sorry sight to see, Gov. Arnold Schwarzenegger declaring after the NUMMI shutdown that he would replace NUMMI jobs with "green jobs," forgetting that NUMMI was ultragreen.

Lifson warns that green costs drive business out. "The Bay Area is very high-cost. Power, land and all kinds of things are more expensive. Gasoline with its unique blends also costs more, and the state's unique blend requirement cuts us off from national market," he says. Green jobs thrive in a good economy, but not in a bad one.

They also dampen new investment.

"California is a high-tax and high-regulation state," says Lifson. "The reality is, if you're distributing cars in the western U.S., you can ship from Asia, from plants in Japan and China."

High labor costs kill, too. The UAW contract is a legacy of its ties to GM. After the government's takeover of GM ended GM's role in the plant, Toyota was left with the UAW's uncompetitive labor costs, which added $500 to the cost of a car and forced it to lay off 4,700 workers.

All this signals that the new economy the administration envisions and the state of California implements isn't working.

Free trade will be blamed, but the real culprit is government fecklessness.

The NUMMI plant closure should be an object lesson both to the Obama administration and the state of California as they seek to remodel the economy.

Green companies can't be governed by green mandates.