In a statement Friday, Toyota confirmed speculation that the automaker may have to close its New United Motor Manufacturing Inc. (NUMMI) plant now that GM has abandoned the 50-50 partnership.
“We are carefully evaluating our options with respect to the NUMMI joint venture as a result of General Motors’ actions,” Toyota said in a statement released Friday. “Under the current business circumstances, Toyota regrettably must also consider taking necessary steps to dissolve the joint venture.”
GM declined to include the NUMMI partnership as part of its “good assets” when it regrouped and sold those assets to a new holding company, allowing it to emerge from bankruptcy late last week. Toyota is now stuck with a plant with high UAW wages for its hourly workers, while its competitors open plants in Southern states with much lower wages. Automotive News says that NUMMI workers earn about $28 an hour, while the new auto plants built by Toyota’s competitors employ hourly workers for $15-$20.
The NUMMI plant released its own press release Friday, acknowledging the wage parity issue.
“Neither NUMMI’s labor costs nor business conditions are competitive, so we are working hard to improve them and make NUMMI more attractive to Toyota,” the statement said.
Toyota stated it must “determine whether it can be economically feasible to contract with NUMMI without GM.”
“NUMMI has been a model of U.S.-Japan industry collaboration as long as 25 years, but GM’s decision to abandon NUMMI and discontinue its production of the Pontiac Vibe have prompted a set of difficult and complex decisions for Toyota,” the statement read.
Source: Automotive News