Toyota and General Motors end 25-year partnership
Just when Toyota opened its doors to a new partner in Aston Martin, it closed another door on a 25-year partnership with General Motors.
With news circulating that the Japanese auto giant and Aston Martin have forged a partnership together to produce Toyota’s iQ car in the UK under the Aston Martin brand, it came as a surprise to a lot of people when General Motors announced that it would discontinue its relationship and forego its ownership stake in the New United Motor Manufacturing Inc. (NUMMI) partnership the Detroit-based automaker created with Toyota 25 years ago.
GM’s announcement came on the heels of its decision to completely drop the Pontiac brand from its roster of cars – a decision that has virtually made the Nummi plant in Fremont California, where the Pontiac Vibe was being produced, meaningless to GM.
In addition to the Vibe, the NUMMI plant is also responsible for producing two of Toyota’s staple brands, the Corolla sedans and the Tacoma small pick-ups. Whether or not Toyota decides to keep the plant up and running remains to be seen, but the void left by GM will undoubtedly be felt by the thousands of employees that could potentially lose their jobs.
The domino-effect that was initiated by the global economic crisis has hit the state of California hard, with the potential closing of the state’s last remaining car production plant becoming the latest black eye to a state that is struggling to stay afloat and create new employment opportunities for its weary citizens. Should the NUMMI plant close, about 5,400 employees are facing the growing possibility of losing their jobs, not to mention an additional 30,000 more jobs that are indirectly linked to the production of these cars.
Toyota has long been lauded as a company that exercises upmost patience as far as the well-being of their employees are concerned. But with the astronomical costs of manufacturing in California, not to mention a rapidly declining list of suppliers, it’s becoming more and more likely that Toyota will buck its trend of resisting lay-offs and close down the plant altogether.
It’s bitter reality check for Toyota who only a few days ago was revelling in the newly-formed partnership with Aston Martin. The potential – maybe even inevitable – closing of the NUMMI plant has surely dampened the spirits of the Japanese automakers.
Source: L.A. Times