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GM dumps NUMMI, leaves Toyota holding the plant
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NUMMI, or New Union Motor Manufacturing Incorporated, will not be part of the New GM, the Detroit automaker said in a statement released today. General Motors had already announced production of the Pontiac Vibe would cease at the joint venture facility it had shared with Toyota to build Corolla-based vehicles for the past 25 year.
In the statement, GM North America president Troy Clarke, said, “As part of its long-term viability plan, General Motors has decided that its ownership stake in the New United Motor Manufacturing Incorporated (NUMMI) joint venture with Toyota will not be a part of the 'New GM’. After extensive analysis, GM and Toyota could not reach an agreement on a future product plan that made sense for all parties.”
Saying that General Motors has had a “positive and beneficial partnership with Toyota,” Clarke also said that “GM believes it is in the best interest of the ‘New GM’ and its stakeholders that we place our ownership interest in NUMMI in 'Old GM’.”Which essentially means it’s history.
Toyota meanwhile released the following statement:
“Toyota Motor Corporation is sorry that General Motors has chosen to withdraw from the NUMMI joint venture, ending a long, successful partnership spanning 25 years. Our hope was for the 50/50 joint venture to continue. While we respect this decision by GM, the economic and business environment surrounding Toyota is also extremely severe, and so this decision by GM makes the situation even more difficult for Toyota. We will consider alternatives by taking into account various factors.”
Toyota recently announced its first loss in almost six decades of operation, plus Toyota’s production in Japan fell 42 percent to 192,637 in May and exports dropped 51 percent, so the loss of a partner in the joint venture hits Toyota harder than it might have in less lean times. Of course, in better times, GM would not have to bail on the relationship.
There have been rumors that Toyota would build the Prius at NUMMI’s California manufacturing plant and even speculation that the Prius would be branded with a General Motors nameplate and sold by one of its divisions.
However, with GM’s own hybrid vehicle plans well underway, that seems unlikely. Toyota had previously planned to build a factory in Tupelo, Mississippi, to build an SUV, but when $4.00 per gallon gasoline hit, production plans for that plant were changed to building the Prius. Then when gasoline prices feel to more natural levels, plans for the Tupelo plant because deader than Elvis.
That leaves Toyota with half of a plant—the NUMMI facility has built the Toyota Corolla and the Corolla-based Pontiac Vibe while the Vibe’s twin, the Toyota Matrix, is built in Canada.
Might Toyota build the Prius in the NUMMI factory? Considering the downturn in production in Japan and the underwhelming demand for the Prius in current economic conditions, that seems unlikely.
But if this proves anything, it’s that nothing in economics happens in a vacuum. Whatever affects General Motors will affect Toyota, and whatever happens in Tokyo can affect auto workers in California.
Illustration: 1995 Geo Prizm, a rebadged and recontented Toyota Corolla built in the NUMMI plant.
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