Toyota to Cover All NUMMI Closure Costs

Toyota has already announced that it will end its NUMMI joint venture on March 31, 2010 but it appears that the Japanese manufacturer is encountering some difficulties in doing this. Bloomberg informs that Toyota might have to pay all the GM venture closure costs as Detroit-based Motors Liquidation Corp., who took over some assets after GM's bankruptcy filing, is not willing to contribute.

At this time, nobody knows which will be the cost for closing NUMMI but the involved companies will have to reach an agreement by early 2010. Toyota is believed to be the most affected.

"Motors Liquidation is not contributing at all to Nummi's closure costs," Tim Yost, Motors Liquidation Corp. spokesman, said in a statement. "We don't believe there will be a requirement for us to do so."

"Neither GM nor MLC have contributed any funds toward Nummi's end-of-production costs," said Lance Tomasu, a venture spokesman. "We do not know what the overall cost will be."

General Motors announced its decision to quit NUMMI earlier this year as the company filed for bankruptcy and started a massive restructuring process that included phasing out brands and selling overseas operations. As a result, Toyota was left to choose between continuing the joint venture on its own and abandon it as well.

In late August, Toyota officially announced that it will close NUMMI on March 31, with production to be shifted to other factories owned by the Japanese manufacturer.

“After the decision by General Motors to withdraw from the NUMMI joint venture, Toyota conducted a thorough review of its alternatives in light of current and anticipated market conditions. Based on this review, we have determined that over the mid- to long-term, it just would not be economically viable to continue the production contract with NUMMI. This is most unfortunate, and we deeply regret having to take this action,” Atsushi Niimi, TMC vice president said in a press release.