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Toyota Sues Former GM Over Shuttered Joint Venture

December 1, 2010
2 min to read



TOKYO—Toyota Motor Corp. said Wednesday it filed a lawsuit against General Motors Co.'s bankruptcy estate over a production halt at a now-closed manufacturing joint venture in California.


The Japanese car maker says Motors Liquidation Co. should pay $73 million in damages to cover R&D costs for the jointly developed Pontiac Vibe, after the former GM halted production of the model in August 2009 a few months after filing for bankruptcy protection, a Toyota spokesman said.

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Toyota had been in talks with Motors Liquidation on the matter, but "we didn't reach a settlement" and therefore decided to take legal action, the spokesman said.


Motors Liquidation wasn't immediately available for comment.


The lawsuit marks the final stages in the demise of a partnership between the two auto makers that stretched back over 25 years, during which Toyota unseated the former GM as the world's largest car maker by volume.


The two companies set up their New United Manufacturing Inc., or Nummi, joint venture in Fremont, California, in 1984. The plant was closed in April of this year after Toyota found it difficult to continue running operations once GM pulled out.


Earlier this week, Nummi said it is separately seeking $365 million in damages for breach of contract after the former GM pulled out of the joint-venture. The decision to withdraw from the joint venture in the summer of 2009 ultimately cost 4,500 jobs.

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The ongoing process of dealing with assets of the former GM comes as General Motor Co., the surviving entity after restructuring, made a successful comeback last month when it re-listed its shares.


GM's owners sold shares at $33 each in the initial public offering. The U.S. government was the main selling shareholder in the IPO, raising up to $13.6 billion to recoup some of the $49.5 billion cost of bailing the auto maker out during the global financial crisis.


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