NUMMI, Toyota Sue "Old GM" For Contract Breaches

Edward Niedermeyer
by Edward Niedermeyer
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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  • Tparkit Tparkit on Dec 01, 2010

    Let's recall that Toyota caved in to Ray DaHood and Washington/UAW extortion, to the tune of $250 million. 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.

    • See 3 previous
    • Steven02 Steven02 on Dec 02, 2010

      tparkit, Seriously dude, take off the tinfoil hat. It wasn't illegal. No rights were stripped. Everything you are saying is incorrect. Please, don't act like a stock sale by the UAW somehow proves the point that this was an illegal bankruptcy. If the stock was worthless, the UAW wouldn't have gotten anything either. Bill Safreed, While I understand that people were hurt through the bankruptcy process, the people holding those bonds would have gotten no money if GM went chapter 7. Unsecured debt doesn't get anything during bankruptcy.

  • Steven02 Steven02 on Dec 01, 2010

    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.

  • FleetofWheel FleetofWheel on Dec 01, 2010

    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.

  • Crabspirits Crabspirits on Dec 01, 2010

    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.

    • Disney4dad Disney4dad on Dec 16, 2010

      Hey Crab, You know that's just what I did. As soon as I heard the place was closing I went home cried on my wife's shoulder and then started looking for a new way of putting food on the table. This waiting for a knock on the door or that phone call, yea right it's not going to happen. And for the ones thinking Tesla is going to call, don't hold your breath. They have thousands of people to call. Unless your a technician or have skills that put you above others, your not going to get a call or at least not now maybe after they get the plant going and need more workers but that's not for years to come. As for me I've gone into the green industry, I just received my certificate as a Electric Vehicle Technician. Oh and it was all covered by the TAA program. CleanTech Institute was the place I went to. Check them out at I know Tesla's going to call me.