NUMMI, Toyota Sue "Old GM" For Contract Breaches
Both Toyota and the remains of its joint venture known as NUMMI have sued the remains of “Old GM” for breach of contract according to two separate reports in the Wall Street Journal [sub]. NUMMI is seeking $365m, claiming GM caused the collapse of the joint venture by unilaterally pulling out as it collapsed into bankruptcy, sticking Toyota and NUMMI with the bill.
Those decisions breached … commitments to Nummi and sounded its death knell,” said the lawsuit, filed last week. And unlike Toyota, GM’s bankruptcy estate “has refused to contribute to Nummi’s deficit during the wind down”
Toyota, meanwhile, is suing for some $73m in development costs for the Pontiac Vibe, a vehicle that GM was supposed to sell for another two years.
Toyota has reportedly been in settlement talks with Motors Liquidation Corp (aka “Old GM”), but failed to reach an agreement with its former partner. And because Motors Liquidation is facing far more claims than it has money to pay out, these lawsuits may be about more than just money. UAW workers were encouraged to hold protests around California and the country in the wake of NUMMI’s shutdown, blaming Toyota for “killing American jobs.” These lawsuits might not put Toyota in front of (for example) asbestos claims or any of the other demands on Old GM’s dwindling funds, but if they win it will prove once and for all that GM, not Toyota was responsible for killing NUMMI.
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Let's recall that Toyota caved in to Ray DaHood and Washington/UAW extortion, to the tune of $250 million. http://www.thetruthaboutcars.com/2010/03/toyota-pledges-250m-for-nummi-closure/ So what changed? Why is Toyota battling back now? Simple. The Democrats got wiped out in the November election. The sort of perversion represented by the phony bankruptcies of GM and Chrysler - brutal, extralegal acts of theft deeply damaging to America's ability to attract investment - likely can't happen in the current political climate, partly because House Republicans can freeze any Democrat program. Of course there are no guarantees - but past capitulations bought Toyota no protection, so if the company is going to go down it may as well go down fighting.
NUMMI and Toyota are suing for breach of contract. They are not suing to prove that GM pulling out is why NUMMI was closed. Either way the lawsuit goes, it won't prove the cause of NUMMI closing. NUMMI was closed because Toyota didn't want it. GM's production was something like 10% of production coming out of NUMMI. Toyota could have kept going with a slow down of volume if they wanted to. Toyota decided not too because it had excess production elsewhere and didn't want or need NUMMI. I don't blame Toyota for pulling out. It was a smart business move. But it wasn't GM business that was keeping the place going. Not by a long shot.
Be careful UAW, you're giving Toyota street cred with these dire claims of 'killing'. Expect to see aftermarket decals featuring that sinister Toyota death skull logo on the new FT-86 when it rolls out.
That picture with the tubby SOB holding the kanji sign embarrasses me as an American. Nobody really is responsible for themselves anymore. The majority of the rest of us without an extortion arm would just suck it up and say "Well, that's life." and start looking for new employment.