Corp. says it will not be taking its 50% ownership stake in New United Motor Mfg. Inc. with it when it exits bankruptcy.
Eleven days ago, the Detroit auto maker said it would end production of the Pontiac Vibe at NUMMI in August but was still discussing possible new production plans with partnerMotor Corp.
But today, GM says it has been unable to reach a deal with“that made sense for all parties,” and its ownership stake will not be part of the new company that emerges from Chapter 11 bankruptcy protection.
“GM believes it is in the best interest of the ‘New GMʼ and its stakeholders that we place our ownership interest in NUMMI in ‘Old GM,’” Troy Clarke, president-GM North America, says in a statement. “We have enjoyed a very positive and beneficial partnership with Toyota for the past 25 years, and we remain open to future opportunities of mutual interest.”
It is unclear what will happen to the NUMMI plant in Fremont, CA.
Toyota Motor Corp. spokespeople in the U.S. say the company is “considering its alternatives carefully.” Those presumably would be to purchase the remaining 50% equity in NUMMI, proceeds of which would go to pay GM creditors, or to exit the venture entirely.
Earlier reports suggested Toyota would maintain operations at NUMMI should GM drop out, while continuing to keep its new plant in Mississippi on ice.
“No decision has been made (on what will happen with NUMMI), and there’s been limited information at this point,” says Toyota spokeswoman Zoe Zeigler. “We will make a decision as soon as possible, but (with the) GM bankruptcy, it is complicated.”
She says Toyota would have liked to continue the JV, but the “severe conditions” the industry is facing helped to scuttle the venture.