Toyota in talks with GM to close NUMMI plant

Article by Christian A., on August 26, 2010

The fate of the New United Motor Manufacturing, Inc. (NUMMI) plant in Fremont, California, is still up in the air. Reuters reports that Toyota has begun talks with General Motors about dissolving the joint venture and a conclusion is expected by the end of the month. Possibilities include a liquidation or sale to another company.

Toyota has said that it could liquidate its stake, once GM cut ties to the operation during its bankruptcy last month, or buyout GM's stake and continue operating the plant alone.

Located in Fremont, California, the NUMMI plant produces the Toyota Tacoma and Corolla, and the Pontiac Vibe.

The plant's workers are represented by the UAW, which means they can earn up to about $28 an hour, while Toyota and GM competitors employ workers at other plants for closer to $15 or $20 an hour.

The high cost of labor at NUMMI won't help Toyota if it plans to be profitable by its next fiscal year, as Toyota North America chairman and CEO Yoshimi Inaba indicated earlier this week.

Inaba also warned the company was wary of the consequences closing the plant might have among consumers in its biggest market in the U.S.

Topics: toyota, gm, factory

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