95gm_logo.pngGeneral Motors Corporation (OTC: GMGMQ, GMGMQ message board), which is warming up to come forth from Chapter 11 protection later this summer, has announced that it wants out of a joint venture code-named New United Motor Manufacturing Incorporated (NUMMI), established in 1984 with its Japanese arch-rival, Toyota Motor Corporation (NYSE: TM). GM cited a failure to find the middle ground with regard to a worthy substitute for the Pontiac Vibe brand which is set to be severed in August, from the partnership’s 5.3 million square foot assembly plant in Fremont, California.

  “As part of the long standing viability plan, General Motors has decided that its ownership stake in the...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”, pointed out the president of GM North America, Troy Clarke. Even so, the giant U.S automaker said the 9tm_logo.pngpossibilities of future alliances with Toyota were not therefore to be ruled out, acknowledging that it has benefited abundantly from the age-old corporation.

  NUMMI has approximately 5,000 employees at its plant, with almost half of them being UAW members, making it Toyota’s only unionized workforce in North America. Since it was founded 25 years ago, GM has adopted most of Toyota’s innovative car making techniques, while the later ceased the opportunity to manufacture its first vehicles on U.S soil and managed to expand its global market share.

  Toyota has been responsible for more than half of the production at the facility which currently builds two of its models – Corolla sedan and the Tacoma light truck – alongside GM’s Pontiac Vibe, which is a variant of Toyota Matrix produced in Canada.

  “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”, said Toyota spokesman, Mike Goss. 

  Meanwhile, Toyota has overruled reports from some sections of the media which claimed that it might bring the production of its Prius hybrid to NUMMI, instead of continuing to import the vehicle from its Tsutsumi plant in Japan, for the American market.

  On Tuesday, GM stock closed at $1.09, down from $1.14, while the share price of Toyota moved up to $75.53, from the prior day’s closing of $75.49.

Reference:
http://www.gm.com/
http://www.toyota.co.jp/en/index.html