Toyota, GM End Long, Costly Marriage

When Toyota Motor (TM) and General Motors opened their joint venture in Fremont, Calif., 25 years ago, it was seen as a smart marriage. Toyota would learn the cultural nuance of managing American workers, get to know U.S. parts makers, and gain political favor by saving a doomed domestic plant. GM tried to show that it was getting in step with surging Japanese competition by learning Toyota's secrets to efficiency and quality. But now the marriage is breaking up, and Toyota is stuck with a problem child.

That California plant, called New United Motor Manufacturing Inc. (NUMMI), is Toyota's most expensive plant in North America. Since it won't be building the 40,000 or so Pontiac Vibes that Toyota made for GM every year, it will become underused as well. The plant also made 140,000 Toyota Tacoma pickups and a fair portion of the 351,000 Corollas that Toyota sold last year. After GM pulled out of the deal, Toyota said cryptically only that "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."