Editorial: Connect the Dots: Could GM Get Their Own Version of the Prius?

Frank Williams
by Frank Williams

GM is shutting down production of the Pontiac Vibe at the New United Motor Manufacturing, Inc. (NUMMI) plant in California. GM has sold some car or another based on the Corolla ever since they jointly opened the plant with Toyota. GM doesn’t need them to produce another small car, as they’re looking at plants in Michigan, Wisconsin and Tennessee for that. That’s the first dot. And away we go!

Toyota spent $1.3 billion to build and man a new plant in Blue Springs, Mississippi. Originally, Toyota Motor Manufacturing Mississippi (TMMS) was set to construct Highlanders. And then the SUV market crashed. As gas prices rose, ToMoCo couldn’t import enough fuel-sipping Priora to satisfy demand. In July 2008, they announced a change in plan. The Hospitality State facility would be converted to Priora production. And then gas prices cratered. As did the entire US new car market, including the Prius. With all excess capacity in other factories, Toyota’s mothballed the half-built Mississippi factory.

Then Toyota released the 2010 Prius. Despite the depressed global new car market worldwide demand for the model is strong. Toyota needs more manufacturing capacity to meet that demand. It’ll take a while to finish the on-off-on Mississippi manufacturing plant. Dot two.

Third dot: The new Prius shares some parts (such as underbody frame) with the Corolla. In fact, they could be built at the same facility. Rumors are flying that Toyota will add the Prius to NUMMI’s repertoire. It makes sense. NUMMI has the capacity to build Priora; all the high-tech parts they’d need will come from Japan to the west coast. Toyota would cut shipping costs considerably by parts close to their west coast port of entry.

Now here’s where it gets interesting.

GM and Toyota still jointly own NUMMI. GM’s historically sold a Toyota-based small car since they started the venture. Will Toyota build another? We’ve that Toyota’s President Katsuaki Watanabe said, “If some talk about supporting GM comes up, we would like to consider it earnestly.”

It’s the same party line ToMoCo adopted back in ’05, when GM first acknowledged that it was kinda maybe heading for disaster. In fact, as we reported at the time, GM CEO Rick Wagoner flew to Tokyo and met with Toyota’s CEO. Although the substance of those talks was never revealed, it was widely speculated that Wagoner was exploring the possibility of licensing Toyota’s hybrid technology (if only).

Dot four.

New CAFE regulations are full of loopholes, but Government Motors has to do something to at least appear to be satisfying their high mileage provisions. They need to fulfill the “greener” part of their short-lived “Leaner, Greener, Faster, Smarter” reinvention campaign.

GM’s going to build the Cruze, their own small car, in Lordstown Ohio and Son of Aveo somewhere (where the tax breaks are easy). But their dance card at the hybrid car cotillion is empty. The General’s pulling the plug on their light hybrids (VUE, Aura and Malibu) and put the PHEV drivetrain for the Saturn VUE on hold (the model’s going bye-bye). The Hail Mary plug-in hybrid Volt has been conspicuously absent from the news and press releases lately. So there’s no telling what’s going on there. GM needs hybrid help to appease its new government overlords post haste.

Final dot.

So . . . what are the chances of Toyota building a small hybrid vehicle for GM when they gear-up to start Prius production at NUMMI? Connecting all the dots shows it would fill an important niche for GM, give them sorely-needed green creds and would improve capacity utilization at NUMMI.

“No way” you say? That’s exactly what they said about the idea of GM and Toyota cooperating on anything before NUMMI opened a quarter century ago. Stranger things have happened. Given the state of the auto industry, anything’s possible now.

Frank Williams
Frank Williams

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  • Pch101 Pch101 on Jun 20, 2009
    That’s GM’s biggest worry: Not reorganizing an ossified management, or making perfect automobiles, or turning all dealers into something resembling the mid-90’s Saturn experience. It finally shutting up the permanent negatives, so the rest of the market place isn’t afraid to look at what they’ve made. I'm sorry, but that's just BS. Blaming the unhappy customer is a cop out that has long provided comfort to the faithful, but has failed to generate any sales. GM will need to have a decade of consistent successes and no failures in order to overcome its well-earned poor reputation. The fanboys can either deal with it, or else watch their company die. The government bailout money is only going to go so far, and at some point, GM will ultimately succeed or fail based upon its merits. Three decades of pissing and moaning has obviously not done GM any good, so continuing that is a waste of time. Another year's worth will only make it worse. The whine-and-cheese corporate culture is worthy of a pre-school playground at recess, not of a company that wants to win.
  • Paul Niedermeyer Paul Niedermeyer on Jun 20, 2009

    Re this rumor: Toyota denies that report as pure speculation, with Mike Goss, external affairs manager with Toyota Motor Engineering & Manufacturing North America, telling Green Car Advisor that it still plans to assemble the Prius at its unfinished plant in Mississippi at some point in the future. General Motors also denies that it will license hybrid technology from Toyota. In a webchat session on GM's Fastlane Blog, Troy Clarke, President of GM North America, said of the rumors: "We are not in current discussions with Toyota on licensing their synergy drive. I would point out that we are working like crazy on our own hybrid technology. Also, we are really moving fast on the Volt of which you are well aware."

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