Toyota to close Calif. plant

Toyota Motor Corp. will shut a California auto-assembly plant that operated as a joint venture with General Motors Corp. for 25 years, the first time Japan’s largest carmaker has closed a factory at home or abroad, according to two people familiar with its plan.

The company will negotiate the timing of the closing with Motors Liquidation Co., an entity responsible for the disposal of the assets GM shed in bankruptcy, said the people, who declined to be identified because the information wasn’t public.

A collapse in U.S. auto sales to their lowest since 1976 has left Toyota, the world’s largest automaker, struggling to keep North American plants running at capacity and avoid factory closings and job cuts. GM in June said it would end assembly of Pontiac Vibes at New United Motor Manufacturing Inc., known as Nummi, and quit the venture as part of its reorganization.

“Without GM’s volume the plant is simply not cost effective," said Aaron Bragman, an analyst at IHS Global Insight Inc. in Troy, Michigan. “They have other facilities that could easily accommodate the production that’s there."

Bragman said that should the plant close, it would mark a shift for Toyota because the automaker typically doesn’t “respond to changes in the market on a short term."

Yoshimi Inaba, Toyota’s North American chief executive, said July 20 its decision depended on possible aid from California lawmakers, labor contracts for the factory’s union workers that expire in August and Nummi’s financial viability. It’s the only large auto-assembly plant on the U.S. West Coast. Bloomberg

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