Toyota sues old GM for backing out of NUMMI deal

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Litigation may be all that’s left for New United Motor Manufacturing Inc., a unique, quarter-century partnership between the former General Motors and Toyota Motor Corp. that produced millions of cars at a sprawling factory in Northern California.

Toyota and NUMMI have both filed lawsuits against the bankrupt automaker’s successor, Motor Liquidation Co., in bankruptcy court, seeking damages for abandoning sales of the Pontiac Vibe in 2009.

Toyota said it spent “hundreds of millions of dollars” in research and development to design the Vibe, which was wasted when Motors Liquidation Co. decided to stop selling the car.

The lawsuit seeks $73 million that Toyota said it would not have spent if it knew that Motors Liquidation Co. would back out of the deal.

A spokesman for Motors Liquidation could not be reached for comment.

Motors Liquidation filed for bankruptcy June 1, 2009. Three days later, the company announced that it would stop purchasing Vibes from NUMMI. In August 2009, the last Vibe was manufactured in NUMMI’s Fremont plant.

By backing out of the deal, Toyota alleged, Motors Liquidation breached an agreement to purchase 65,000 Vibes per year from NUMMI through 2012.

The lawsuit, first reported by the Wall Street Journal, marks the end of a once-admired relationship between two of the world’s largest automakers that started in 1984 when a yellow Chevorlet Nova rolled out of the factory.

During the ensuing 25 years, the former GM sold nearly 2 million cars of various models that were designed by Toyota and manufactured at NUMMI’s plant in Fremont, the lawsuit said.

The lawsuit seeks $73 million to cover Toyota’s design expenses, plus unspecified damages to cover environmental contamination at the factory and worker’s compensation expenses for factory workers.

-- Stuart Pfeifer