Toyota said this Friday that it may have to close its New United Motor Manufacturing (NUMMI) facility in California since General Motors has canceled its 50/50 partnership with the Japanese automaker. General Motors, which exited bankruptcy on Friday, left its NUMMI stake with other bad assets on their way to liquidations.
“We are carefully evaluating our options with respect to the NUMMI joint venture as a result of General Motors’ actions,” Toyota said in a statement. “Under the current business circumstances, Toyota regrettably must also consider taking necessary steps to dissolve the joint venture. We need to determine whether it can be economically feasible to contract with NUMMI without GM.”
According to Automotive News, a big problem is that NUMMI isn’t competitive for Toyota. The plant itself released a statement on Friday saying that high labor costs have become a problem for Toyota.
“Neither NUMMI’s labor costs nor business conditions are competitive, so we are working hard to improve them and make NUMMI more attractive to Toyota,” NUMMI said in a statement.
NUMMI is responsible for building the Toyota Corolla, Toyota Tacoma pickup and the Pontiac Vibe.
– By: Stephen Calogera