June 30 (Bloomberg) -- Toyota Motor Corp. may offer to supply a version of its Prius hybrid car to General Motors Corp. during a meeting between the companies’ chief executives, two people familiar with the plan said.

Toyota President Akio Toyoda and GM’s Fritz Henderson will meet in Michigan in August said the people, who asked not to be identified because the plan isn’t public. A GM-badged car based on the Prius is among the options for new products at a jointly owned factory in California after GM said it would end assembly of the Pontiac Vibe there earlier than planned, they said.

GM said today it will shed its stake in the factory as part of its bankruptcy restructuring.

“After extensive analysis, GM and Toyota could not reach an agreement on a future product plan that made sense for all parties,” GM North America President Troy Clarke said in a statement.

Toyota said it will explore options for the factory after what a spokesman described as a “long, successful partnership spanning 25 years.”

“Our hope was for the 50/50 joint venture to continue,” Mike Goss, a U.S.-based spokesman for Toyota, said in an e- mailed statement. “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.”

Prius Alternatives

A version of the world’s top-selling hybrid car may yet help GM win U.S. customers. Toyota is considering the California plant as a Prius production site after shelving plans to make the gasoline-electric car in Mississippi, two people familiar with the matter told Bloomberg earlier this month.

“Having a stronger line-up is an urgent matter for GM,” said Yoshihiro Okumura, who helps oversee the equivalent of $365 million at Tokyo-based Chiba-gin Asset Management Co. “Demand will continue to shift to small cars.”

GM has eight hybrid models, two of which are Saturns, a brand that GM is selling to Penske Automotive Group Inc. Of GM’s remaining six hybrids, only one, the Chevrolet Malibu, is a car rather than a truck, according to its Web site.

Pat Morrissey, a spokesman for GM, declined to comment on any technology-sharing relationship with Toyota.

GM will launch the plug-in electric Chevrolet Volt next year and plans to have 14 hybrid models in 2012, the automaker said June 1 as part of its bankruptcy filing.

Nummi’s Future

GM said earlier this month it will stop building Vibes in August at New United Motor Manufacturing Inc., the only large auto-assembly plant on the U.S. west coast, ahead of the Detroit-based company’s initial plan to cut the hatchback in 2010. Toyota, the world’s largest automaker, and GM, the second largest, have shared the factory, known as Nummi, since 1984.

“We have been in discussions with Toyota about potential future products. We have not figured out a product that meets the needs of Toyota or ourselves,” Troy Clarke, president of GM North America, said during a June 26 conference call. “That dialogue continues.”

Clarke told reporters on June 19 that GM was not in talks to license Toyota’s hybrid system.

“Nothing has been decided other than halting the production of the Vibe at Nummi,” said Hideaki Homma, a Tokyo- based spokesman for the company, before the GM announcement. “A meeting of the executives is also not under consideration.”

‘Crown Jewels’

Ford Motor Co. licenses Toyota patents as part of its hybrid program, while GM has turned down those opportunities, said Jim Hall, principal of 2953 Analytics auto-consulting firm in Birmingham, Michigan. It might make sense if GM also shares component development for its sedans with Toyota, he said.

“Toyota is not normally in the practice of giving away the crown jewels,” Hall said.

It probably doesn’t make sense to put a hybrid vehicle in Nummi, Hall said.

Toyota and GM have shared the Fremont, California, plant since 1984. While GM owns half of the plant, Toyota models accounted for 76 percent of output through June 27, according to trade publication Automotive News.

The factory has capacity to make 420,000 cars and trucks a year and employs about 5,400 people, according to the plant’s Web site. In addition to Vibe, which is a version of Toyota’s Matrix hatchback, Nummi builds Corolla small cars and Tacoma pickups.

Toyota on Dec. 15 said it would halt work on a $1.3 billion Blue Springs, Mississippi, factory after plunging U.S. sales created excess capacity at its North American plants. The company early this year said it would pay the interest on bonds issued by Mississippi for plant-related infrastructure.

To contact the reporters on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net; Kae Inoue in Tokyo at kinoue@bloomberg.net

Last Updated: June 29, 2009 16:37 EDT