Toyota May Close California Plant

Before the global economic crisis, GM and Toyota jointly operated the New United Motor Manufacturing Inc. (NUMMI) plant in California. GM’s bankruptcy and restructuring, though, has led it to pull out of the vehicle-assembly plant, leaving Toyota to decide whether or not it will be a wise decision to renew its contract with the manufacturers.
 
GM and Toyota established the NUMMI operation in 1984, but ever since then, the venture has mostly lost money for both companies. Toyota posted in first annual loss in 58 years last year, marking relatively dire straits for a historically successful company. Slow vehicle sells and excessive supply in North America will most likely lead to another annual loss for Toyota.
 
The decision will not be as open-and-shut as it may seem for most business experts. When Akio Toyoda took charge of the company last month, he promised to not close down any plants in North America, Japan, and several other locations. However, the high operational cost for the 4,600-worker Bay area plant may force Toyoda to go back on its word.

NUMMI Plant (Image: Flickr)