Toyota Sues GM for NUMMI Shutdown, Demands $73 M

Toyota said it filed a lawsuit against Liquidation Co, dubbed "old GM", the company that is auctioning leftover assets after GM closed some of its manufacturing plants. The Japanese carmaker hopes it will receive $73 million in damages related to the closure of their joint factory.

Toyota aims for the aforementioned sum to cover research and development costs that weren't recouped because of a breach of contract, when GM shut down their plant in California, New United Motor Manufacturing Inc or Nummi, as it was nicknamed. Toyota feels the departure of GM from the joint venture unfairly left the company to sort out what was left.

"It's part of the process of winding down the Nummi venture," said Toyota spokesman Keisuke Kirimoto.

Nummi was a 50-50 joint venture between Toyota and General Motors, which began in 1984, and was publicized at the peak of its popularity as a new partnership that crossed borders, allowing both sides to learn from each other.

GM was forced to put an end to its partnership with Toyota as part of its bankruptcy restructuring, which ended last month with the world's largest initial public offering at $23.1 billion. The Californian plant was the last major auto factory on the west coast, but was eventually closed, leaving 4,700 workers without jobs, as the demand for cars collapsed in the middle of the global financial crisis.

Toyota eventually sold the plant to electric car partner Tesla Motors for some $42 million, which covered 207 acres, or about 55 percent of the land at the site, but did not include manufacturing equipment. Tesla has set up a factory at the Nummi site for the next-generation electric sedan in partnership with Toyota. Model S sedan production is expected to start in 2012, and the plant has already begun hiring.
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