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Breaking Up Is Hard To Do: Toyota Sues GM Over NUMMI Closure

Posted in auto industry, GM, Legal, Newsworthy, Toyota by Kurt Ernst | December 3rd, 2010 | Leave a Reply |

One of the victims of GM’s 2009 bankruptcy was New United Motor Manufacturing, Incorporated (NUMMI), which had been a successful R&D and manufacturing joint venture between GM and Toyota. Over the years, the plant cranked out the Chevy Nova, the Geo/Chevy Prizm, the Pontiac Vibe, the Toyota Matrix, the Toyota Corolla and even the Toyota Tacoma. Toyota also used the plant to build vehicles for export, including Hilux pickups and the right hand drive version of the Matrix, dubbed the Voltz.

When GM announced their withdrawal from the joint venture, they blamed it on the closure of Pontiac and claimed that they couldn’t make a business case to build other models at the plant. GM’s shutdown of their part of the NUMMI facility forced Toyota’s hand, and they shifted production of Tacoma and Corolla models to other facilities before closing NUMMI altogether in April of 2010. In May of 2010, Tesla Motors purchased the NUMMI manufacturing facility from Toyota and has announced their intention to build Model S sedans at the facility.

Done deal, right? Not exactly, since Toyota claims they incurred shutdown expenses and R&D expenses after GM breached the NUMMI contract. Toyota is suing GM (specifically, Liquidation Co., or the “old” GM) for $73 million, which they feel is sufficient to cover the losses incurred. A Toyota spokesman, Keisuke Kirimoto, called the suit “part of the process of winding down the NUMMI venture”; in other words, don’t read too much into this, since big companies sue each other all the time. Even for the new GM, flush with $23.1 billion of investor cash, that would be a painful check to write.

Source: Autoevolution

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