GM will pull out of joint factory venture in California; GM-badged Prius may be built instead
30 June 2009

GM is set to end its 25-year US partnership with Toyota, as it leaves behind some of its assets in the bankruptcy court.

The two car giants have a 50 per cent stake each in New United Motor Manufacturing Inc (NUMMI) based in California. GM produces the Pontiac Vibe at the factory, while Toyota builds Corolla and Tacoma models there.

GM is due in bankruptcy court today in attempt to sell off it best assets to a new GM funded by the Obama administration. The Toyota venture is one asset which will not be taken on by new GM.

Troy Clarke, GM's president of North American operations, said: “After extensive analysis, GM and Toyota could not reach an agreement on a future product plan that made sense for all parties.

“NUMMI will end production of vehicles for GM in August, and there are no future GM vehicles planned for the joint venture at this time.”

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A Toyota statement said the Japanese firm was disappointed that the venture had ended and that it had wanted to keep it going.

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“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,” the statement said.

Reports in the US have said a GM-badged Toyota Prius is an option for filling the extra capacity in the NUMMI factory, with GM CEO Fritz Henderson and Toyota president Akio Toyoda set to discuss the plan in August.

Toyota could also consider producing the third-generation Prius there itself to keep up with strong demand for the hybrid car.

Mark Tisshaw

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