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Toyota won't get any help on Nummi plant closure costs

Motors Liquidation Corp., which took over General Motors' assets, says it doesn't plan to fund worker severance pay or other expenses. GM was a partner with Toyota in the Fremont facility.

November 11, 2009|Bloomberg News

Toyota Motor Corp. may shoulder almost all the costs of closing a California joint-venture plant because the new owner of General Motors Corp.'s 50% stake doesn't plan to fund worker severance pay and other expenses.

"Motors Liquidation is not contributing at all" to the closure costs, said Tim Yost, a spokesman for Detroit-based Motors Liquidation Corp., which took over discarded assets from GM as part of the carmaker's bankruptcy reorganization. "We don't believe there will be a requirement for us to do so."

Costs to close New United Motor Manufacturing Inc. may affect the Toyota City, Japan-based carmaker's earnings for the year ending March 31. Toyota, which last week forecast a net loss of 200 billion yen ($2.2 billion), said that it was still in talks with the Fremont, Calif., venture, known as Nummi, and Motors Liquidation and that it was too soon to estimate the expenses.

The costs are "chiefly an issue for Nummi to decide," said Paul Nolasco, a Toyota spokesman in Tokyo.

"Although we cannot provide any figures at this time, it is something for which we plan to make allowance in our earnings report."

Toyota said Aug. 27 that it would stop using Nummi in March, after GM decided in June to abandon the plant.

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