Toyota has confirmed that, for the first time, it will close one of its U.S. plants. The facility is the New United Motor Manufacturing Inc. (NUMMI) plant in Freemont, California.
“After the decision by General Motors to withdraw from the NUMMI joint venture, Toyota conducted a thorough review of its alternatives in light of current and anticipated market conditions,” said Toyota executive vice president Atsushi Niimi in a statement. “Based on this review, we have determined that over the mid- to long-term, it just would not be economically viable to continue the production contract with NUMMI. This is most unfortunate, and we deeply regret having to take this action.”
“We remain strongly committed to maintaining a substantial production presence in the U.S.A. and North America. To that end, we will consider moving additional Corolla production back to North America over time.”
Opened as a joint project with General Motors in 1984, Toyota’s decision to shutter the factory became necessary when GM exited the deal through its recent bankruptcy proceedings.
At the NUMMI facility Toyota assembled the Corolla and Tacoma pickup truck. Now Toyota will have to rely on its Cambridge, Ontario plant for all of its North American supply of Corollas. Inventory of the compact car is particularly low due to the Corolla being the most popular car sold under the cash-for-clunkers program.
The NUMMI facility employed 4,700 workers, which were Toyota’s only unionized workforce.
The move by Toyota comes as Japan’s number one automaker is reportedly looking for ways to cut production by 10 percent. According to Japan’s Nikkei business paper, the automaker is looking to reduce output from 10 million vehicles to 9 million vehicles. Along with the NUMMI closure, Toyota is also expected to shut down a production line in Japan next spring, as well as one in the U.K.