"It may take some time before the future of NUMMI is determined." It won't be part of GM, though.
The longer term prospects for the survival of the NUMMI plant in California just diminished as GM has announced it intends to abandon the plant as part of its bankruptcy proceedings.
Troy Clarke, president, GM North America, has just issued the following statement: “As part of its long-term viability plan, General Motors has decided that its ownership stake in the New United Motor Manufacturing Incorporated (NUMMI) joint venture with Toyota will not be a part of the New GM.”
Insiders say that GM made Toyota an offer for a new product, but the Japanese company delayed and stalled. Then, Japanese executives were completely surprised when Fritz Henderson, GM’s CEO, made a decision to stop talking and move forward by stopping all GM production at what was already an under utilized plant.
“While we respect this decision by GM, the economic and business environment surrounding Toyota is also extremely severe, and so this decision by GM makes the situation even more difficult for Toyota. We will consider alternatives by taking into account various factors,” said Mike Goss of Toyota Motor Engineering & Manufacturing North America Incorporated.
The Pontiac Vibe termination was previously announced a little more than one week ago. However at that time both GM and NUMMI spokespersons said that the current intention of both Toyota and GM is to continue NUMMI as a 50/50 venture. That is now officially no longer the case, and it presents Toyota with a problem since NUMMI is the only UAW plant in North America that Toyota is dependent on.
Japanese makers almost universally prefer non-unionized facilities here. And if the GM bankruptcy goes as planned, contracts such as the one governing NUMMI will be invalidated and Toyota will have to decide whether to buy the facility or shutter it, and then what does it do with the union?
If Toyota buys NUMMI out of bankruptcy, the UAW contract governing the plant would presumably be invalid, allowing it to shed the union, but it is a potential political nightmare of the kind Japanese makers normally try to avoid. The existing workforce could strike and demand that the UAW still represent them.