Toyota saddled with GM venture plant shutdown costs

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Toyota saddled with GM venture plant shutdown costs

Posted on Thursday, November 12th, 2009 at 5:37 PM EST. (Employee News)

Toyota Motor Corp. may shoulder almost all the costs to shut a California joint-venture plant as the owner of the former General Motors Corp.’s 50 percent stake doesn’t plan to fund expenses including worker severance pay, Bloomberg reported.

“Motors Liquidation is not contributing at all to Nummi’s closure costs,” Tim Yost, a spokesman for Detroit-based Motors Liquidation Corp., which took over discarded assets from GM as part of the carmaker’s bankruptcy reorganization, told the news service. “We don’t believe there will be a requirement for us to do so.”

Costs to close New United Motor Manufacturing Inc. may affect the Toyota City, Japan-based carmaker’s earnings for the year ending March 31, the report said. Toyota, which last week forecast a net loss of 200 billion yen ($2.2 billion), said it’s still in talks with the Fremont, Calif. venture known as Nummi and Motors Liquidation and that it’s too soon to estimate the expenses, the story said.

With about 4,700 employees, severance packages alone may total at least a “few hundred million dollars,” Maryann Keller, president of consulting firm Maryann Keller & Associates in Stamford, Conn., said in the story. There will also be environmental clean-up expenses at the facility, which operated as a GM plant for 20 years before the Toyota tie-up, she told the news service. (Bloomberg)