Jun 29, 2009 11:57 pm US/Pacific
Fremont's NUMMI Plant Loses General Motors
FREMONT (CBS 5 / AP) ―
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Ouside view of Fremont's NUMMI plant.
CBS
General Motors Corp. said Monday is ending its joint venture with Toyota Motor Corp. at its Fremont manufacturing plant as it continues to shrink its operations under bankruptcy protection.
The Detroit automaker said it was unable to reach an agreement with Toyota about a new product plan at the facility. The plant, called New United Motor Manufacturing Inc., or NUMMI, currently products the Pontiac Vibe for GM and the Corolla and Tacoma for Toyota.
GM announced it was phasing out the Pontiac brand earlier this year. The facility will cease production of GM vehicles in August, the company said.
"There are no future GM vehicles planned for the joint venture at this time," said Troy Clarke, president of GM North America. "We have enjoyed a very positive and beneficial partnership with Toyota for the past 25 years and we remain open to future opportunities."
Toyota spokesman Mike Goss said that the Japanese automaker is disappointed to see the partnership end.
"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," Goss said.
Goss said Toyota was considering alternatives for the plant and declined to comment further.
GM, which filed for Chapter 11 bankruptcy protection earlier this month, is laying off employees, closing dealerships, shuttering factories and shedding four of its eight brands as part of a vast reorganization effort. The automaker said its stake in NUMMI will become part of the "Old GM" that will be liquidated under bankruptcy.
On Tuesday, a New York bankruptcy court was scheduled to rule on the proposed sale of GM's desirable assets - also called the "New GM" - to a new company that will be majority-owned by the U.S. government.
"We are sorry that GM has decided not to carry its interest in NUMMI forward to the New GM," NUMMI spokesman Lance Tomasu told CBS 5. "It may take some time before the future of NUMMI is determined. In the meanwhile, we are focusing on building very high quality Corollas, Tacomas and Vibes as well as reducing our operating costs."
GM's announcement brings to a close a 25-year partnership between the Detroit automaker and its biggest rival, which GM had sought so it could learn more about Toyota's more efficient production methods.
The Vibe station wagon has been a poor seller for GM recently. Sales rose 25 percent in the down market in 2008, but have tumbled 47 percent for the first five months of this year.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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