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Toyota and NUMMI sue GM entity, alleging breach of contract

In separate lawsuits, the Japanese automaker and the former Toyota-GM joint venture seek damages from Motors Liquidation over General Motors' abandonment of Pontiac Vibe sales during its bankruptcy.

December 02, 2010|By Stuart Pfeifer, Los Angeles Times

Litigation may be all that's left for New United Motor Manufacturing Inc.

The unique, quarter-century partnership between the former General Motors Corp. and Toyota Motor Corp. produced millions of cars at a sprawling factory in Fremont, Calif., but the joint effort fell apart last year in GM's bankruptcy.

Toyota and NUMMI have both sued the automaker, called Motors Liquidation Co. in Bankruptcy Court, seeking millions of dollars in damages for abandoning sales of the Pontiac Vibe last year.

Toyota said in its lawsuit that it spent "hundreds of millions of dollars" in research and development to design the Vibe. The Japanese automaker seeks $73 million that it said it would not have spent had it known that the old GM would back out of the deal.

In its suit, NUMMI is seeking more than $360 million related to GM's decision to pull out of the venture.

A spokesman for Motors Liquidation could not be reached for comment.

GM filed for bankruptcy protection June 1, 2009. Three days later, the company said it would stop buying Vibes from NUMMI, and the last hatchback rolled out of the NUMMI plant two months later.

By backing out of the deal, Toyota alleged, the old GM breached an agreement to buy 65,000 Vibes a year from NUMMI through 2012.

The joint manufacturing operation — such Toyota models as the Corolla also were built there — was created in 1984 when a yellow Chevrolet Nova was the first to roll out of the factory.

During the ensuing years, the former GM sold nearly 2 million cars of various models that were designed by Toyota and manufactured at NUMMI's plant in Fremont, the lawsuit said.

In addition to the $73 million for research and development, the Toyota lawsuit seeks unspecified damages to cover environmental contamination at the factory and workers' compensation expenses for factory workers.

stuart.pfeifer@latimes.com

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