Monday June 29, 07:40 PM
GM to drop out of joint venture plant with Toyota
CHICAGO (AFP) - General Motors (NYSE: GM - news) will drop its ownership stake in the US assembly plant it operates jointly with Japanese rival Toyota as it restructures its operations under bankruptcy protection, the automaker said Monday.
"After extensive analysis, GM and Toyota could not reach an agreement on a future product plan that made sense for all parties," Troy Clarke, president of GM North America said 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."
GM said its ownership stake in the plant would not be sold to the "New GM" that is expected to emerge from bankruptcy in the coming weeks but would instead remain behind as the 'old GM' is liquidated.
Production of GM vehicles at the New United Motor Manufacturing Incorporated plant will cease in August.
Toyota said in a statement it was "sorry that General Motors has chosen to withdraw" and had hoped the venture would continue.
A spokesman for the Japanese automaker declined to disclose its plans for the 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," the statement said.
"We will consider alternatives by taking into account various factors."
The 5.3 million square foot facility in Fremont, California currently employs 5,440 people and produces approximately 250,000 cars and 170,000 trucks, according to the plant's website.
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