Toyota mulling liquidation of Fremont NUMMI venture

NEW YORK (Kyodo) Toyota Motor Corp. said Friday it will consider liquidating New United Motor Manufacturing Inc., a Fremont, Calif.-based joint manufacturing venture with General Motors Corp.

Toyota revealed the plan following GM's announcement the same day that a "new GM," now majority-owned by the U.S. government, has emerged from the bankrupt GM by taking over the best assets of the Detroit-based automaker, including Cadillac and Chevrolet.

The joint venture, NUMMI, which has been in operation since 1984, is not included in the assets the new GM has inherited. As Toyota itself has excess production capacity, the automaker will probably look to liquidate the venture.

Toyota said it must mull the liquidation given the current business environment.

"We have not yet made a formal decision, but it is very difficult to turn a profit by continuing to operate the factory on our own," a senior Toyota official said in Aichi Prefecture.

Another senior official said it may take some time to liquidate the plant even if the automaker decides to go ahead with the plan because its closure will impact area communities and auto parts suppliers.

At present, the joint venture produces the Pontiac Vibe compact for GM as well as the Corolla car and Tacoma pickup truck for Toyota.

About 460,000 Pontiac Vibes were produced between 2002 and the end of this May at the venture.

On June 29, struggling GM said it would discontinue producing the Pontiac Vibe at the venture in August.

Troy Clarke, president of General Motors North America, said at that time in a statement that GM "has decided that its ownership stake in the New United Motor Manufacturing Inc. 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," the statement said.

Toyota began producing cars jointly with GM in 1984 as a way to ease the auto trade friction between Japan and the United States.

Production by NUMMI currently accounts for about 20 percent of Toyota's overall car output in North America. The joint venture employs some 4,500 local workers, with about 270,000 vehicles assembled in 2008.