GM To End Partnership With Toyota At NUMMI

[micbarric]

http://media.gm.com/servlet/Ga...55300

"...General Motors has decided that its ownership stake in the New United Motor Manufacturing Incorporated (NUMMI) joint venture with Toyota will not be a part of the 'New GM’..."

[lencurrie]

Of course not.. that would have been a smart thing to do..

[michaelgt]

Quote, originally posted by lencurrie »

Of course not.. that would have been a smart thing to do..

Why would that have been a smart thing to do? Have you read the agreement? Have you performed the financial analysis of the arrangement? What was the ROI? ROE?

Please expand on your opinion.

[northvibe]

Quote, originally posted by michaelgt »

Why would that have been a smart thing to do? Have you read the agreement? Have you performed the financial analysis of the arrangement? What was the ROI? ROE? Please expand on your opinion.

have you?

All I know is the vibe was a fantastic seller for GM, but they didnt want to admit it...do you know how many people bought the vibe only because it was a toyota?! tons...I DID!

[jake75]

FOR RELEASE: 2009-06-29

GM Media Statement Regarding GM's Ownership Stake in NUMMI

Attributable to Troy Clarke, president, GM North America

"As part of its long-term viability plan, General Motors has decided that its ownership stake in the New United Motor Manufacturing Incorporated (NUMMI) joint venture with Toyotawill not be a part of the 'New GM’. After extensive analysis, GM and Toyota could not reach an agreement on a future product plan that made sense for all parties. Accordingly,NUMMI will end production of vehicles for GM in August, and there are no future GM vehicles planned for the joint venture at this time.Given that, GM believes it is in the best interest of the ‘New GM’ and its stakeholders that we placeour ownership interest in NUMMI in 'Old GM’. We have enjoyed a very positive and beneficial partnership with Toyota for the past 25 years, and we remain open tofuture opportunities of mutual interest.”

What puzzles me is the lack of attention to detail - 3 times no space between words. Usually a PR will be closely reviewed to correct any errors of this sort.

[jake75]

Well - a quick internet check shows this is indeed a real if sloppy, pr from GM.

"The Detroit automaker said it was unable to reach an agreement with Toyota about a new product plan at the facility. The plant, called New United Motor Manufacturing Inc., or Nummi, currently products the Pontiac Vibe for GM and the Corolla and Tacoma for Toyota.

GM announced it was phasing out the Pontiac brand earlier this year. The facility will cease production of GM vehicles in August, the company said.

"There are no future GM vehicles planned for the joint venture at this time," said Troy Clarke, president of GM North America, in a statement. "We have enjoyed a very positive and beneficial partnership with Toyota for the past 25 years and we remain open to future opportunities."

Toyota spokesman Mike Goss said in a statement that the Japanese automaker is disappointed to see the partnership end.

"The economic and business environment surrounding Toyota is also extremely severe, and so this decision by GM makes the situation even more difficult for Toyota," Goss said in an e-mail.

Goss said Toyota was considering alternatives for the plant and declined to comment further.

GM, which filed for bankruptcy protection earlier this month, is laying off employees, closing dealerships, shuttering factories and shedding four of its eight brands as part of a vast reorganization effort. The automaker said its stake in Nummi will become part of the "Old GM" that will be liquidated under bankruptcy.

On Tuesday, a New York bankruptcy court is scheduled to rule on the proposed sale of GM's desirable assets -- also called the "New GM" -- to a new company that will be majority-owned by the U.S. government.

GM's announcement brings to a close a 25-year partnership between the Detroit automaker and its biggest rival, which GM had sought so it could learn more about Toyota's more efficient production methods.

The Vibe station wagon has been a poor seller for GM recently. Sales rose 25 percent in the down market in 2008, but have tumbled 47 percent for the first five months of this year."

Of interest - "The automaker said its stake in Nummi will become part of the "Old GM" that will be liquidated under bankruptcy."

So GM's stake is going to be sold to somebody. I wonder what it is worth. I wonder who would bid for it. It almost looks as if Toyota wouldn't want it if GM gave it to them.

Does Penske have any money left? Perhaps Toyota can buy GM's stake out really cheap and then strike a deal with Penske to produce a Saturn "Vibe". [Assuming all the Vibe dies etc. go with Nummi.]

[northvibe]

wow for being official that is horrible grammar.

[jake75]

"The Vibe station wagon has been a poor seller for GM recently. Sales rose 25 percent in the down market in 2008, but have tumbled 47 percent for the first five months of this year."

Somebody help me here - In 2008 how many Vibes were sold? In 2008, how many Buicks (all models) were sold? In the first 5 months of 2009 how many Vibes were sold? In the first 5 months of this year, how many Buicks (all models) were sold?

[ColonelPanic]

Gee, didnt see that one coming! I guess now the mighty Toyota can finally get rid of that pesky union at the plant.

Here is another article about the demise of NUMMI slash Toyota giving GM a Prius to sell:

http://www.bloomberg.com/apps/...vnSu4

[psiu]

Quote, originally posted by jake75 »

"The Vibe station wagon has been a poor seller for GM recently. Sales rose 25 percent in the down market in 2008, but have tumbled 47 percent for the first five months of this year." Somebody help me here - In 2008 how many Vibes were sold? In 2008, how many Buicks (all models) were sold? In the first 5 months of 2009 how many Vibes were sold? In the first 5 months of this year, how many Buicks (all models) were sold?

That's another thing...sales tumbled AFTER DUMPING PONTIAC Oh and the looming bankruptcy probably helped too.

Should also read: "Sales rose in 2008 despite GM pretending the car didn't exist..."

[lovemyraffe]

Not only did sales go down the crapper, but the value of our cars declined quickly too.

[star_deceiver]

But the Matrix will still be produced so parts won't be too much of a problem!

[ColonelPanic]

Except body panels, trim pieces, bumpers, etc which quite a few of those types of parts were produced in-house at NUMMI. Those aren't going to interchange with the Toyota (removed).

You'll be able to keep the mechanicals running, but everything else will be full of bondo and have pieces held on with duct tape.

[ned23]

Quote, originally posted by northvibe »

wow for being official that is horrible grammar.

They laid-off the copy writer to save money and had the part-timer from the mail room write the press release.

[ned23]

Quote, originally posted by northvibe »

have you? All I know is the vibe was a fantastic seller for GM, but they didnt want to admit it...do you know how many people bought the vibe only because it was a toyota?! tons...I DID!

Maybe they want just to be "GM" and not "GM who has to beg Toyota for Help to make small cars"

When you think about it, the Vibe could be a liability, brand-wise. It reminds people that GM can't build their own compact cars with high quality without help.

[Wolfman213]

I just read today that Subaru and Toyota are making a joint venture for a new car. I can't remember the actual name but I think AE86 is something I remember. They said it had something to do with an old Toyota car. It was in a car magazine at the tire shop. I'm wondering if GM actually withdrew from NUMMI or they just got booted bc Toyota seen something better with Subaru?

[kostby]

If I recall correctly, there IS a Subaru-Toyota joint venture at the SIA (originally 'Subaru-Isuzu-America', now 'Subaru-Indiana-America') plant in Lafayette, IN. Toyota was supposed to take over the space formerly used by Isuzu to manufacture Isuzu Troopers and Troopers masquerading as Honda Pilots - generation 1.

[micbarric]

Quote, originally posted by jake75 »

FOR RELEASE: 2009-06-29 GM Media Statement Regarding GM's Ownership Stake in NUMMI Attributable to Troy Clarke, president, GM North America "As part of its long-term viability plan, General Motors has decided that its ownership stake in the New United Motor Manufacturing Incorporated (NUMMI) joint venture with Toyotawill not be a part of the 'New GM’. After extensive analysis, GM and Toyota could not reach an agreement on a future product plan that made sense for all parties. Accordingly,NUMMI will end production of vehicles for GM in August, and there are no future GM vehicles planned for the joint venture at this time.Given that, GM believes it is in the best interest of the ‘New GM’ and its stakeholders that we placeour ownership interest in NUMMI in 'Old GM’. We have enjoyed a very positive and beneficial partnership with Toyota for the past 25 years, and we remain open tofuture opportunities of mutual interest.” What puzzles me is the lack of attention to detail - 3 times no space between words. Usually a PR will be closely reviewed to correct any errors of this sort.

I just checked the link again and 2 of the 3 "no space between words" errors have been fixed. I've noticed that these releases sometimes get tweaked a day or so after the initial post.

Here is the main page for GM's press releases: http://media.gm.com/

[silvrhawk7]

Well, Im not suprised. GM just put the nail in their coffin, New and old...

[silvrhawk7]

Quote, originally posted by jake75 »

"The Vibe station wagon has been a poor seller for GM recently. Sales rose 25 percent in the down market in 2008, but have tumbled 47 percent for the first five months of this year." Somebody help me here - In 2008 how many Vibes were sold? In 2008, how many Buicks (all models) were sold? In the first 5 months of 2009 how many Vibes were sold? In the first 5 months of this year, how many Buicks (all models) were sold?

Well, if you add china in the mix on this, the buick sales probably sky-rocketed. if it is just the US, then Pontiac's Red headed stepchild (the vibe) probably out-sold the buick division.

As far as im concerned, for small car quality, they will be welcoming back the chevette/T-1000 Model IMO thats what the Aveo/G3 is. But thats OK because my next car will either speak with a german or japanese accent, or heck, i have even taken Ford/Mazda into consideration...

[michaelgt]

Quote, originally posted by northvibe »

have you? All I know is the vibe was a fantastic seller for GM, but they didnt want to admit it...do you know how many people bought the vibe only because it was a toyota?! tons...I DID!

Yes.

Please describe "fantastic seller"!

I could have fantastic sales of my eggs from my chickens if I sold them at nickle each. However, my cost is over a dime each.

Do you have the research statistics that show how many bought it because it was a Toyota? If you say tons, and we average the weight of each buyer to 125 pounds, that would be more than 32!

[michaelgt]

Quote, originally posted by jake75 »

... What puzzles me is the lack of attention to detail - 3 times no space between words. Usually a PR will be closely reviewed to correct any errors of this sort.

GM had mandatory vacation this week. Therefore, it was probably a skeleton crew who did the press release.

[michaelgt]

Quote, originally posted by jake75 »

"The Vibe station wagon has been a poor seller for GM recently. Sales rose 25 percent in the down market in 2008, but have tumbled 47 percent for the first five months of this year." Somebody help me here - In 2008 how many Vibes were sold? In 2008, how many Buicks (all models) were sold? In the first 5 months of 2009 how many Vibes were sold? In the first 5 months of this year, how many Buicks (all models) were sold?

In 2008, 46,551 Vibes were delivered and 137,197 Buicks were delivered in the US.

For the first 5 months of 2009, 11,395 Vibes were delivered and 38,622 Buicks were delivered.

Data is from the GM Press release for December 2008 sales and May 2009 sales.

[silvrhawk7]

Quote, originally posted by michaelgt »

GM had mandatory vacation this week. Therefore, it was probably a skeleton crew who did the press release.

No, it more like they laid off more employees so they could pay those big consultants their $1000 an hour salary to make more botched decisions.

[jake75]

Quote, originally posted by michaelgt »

In 2008, 46,551 Vibes were delivered and 137,197 Buicks were delivered in the US. For the first 5 months of 2009, 11,395 Vibes were delivered and 38,622 Buicks were delivered. Data is from the GM Press release for December 2008 sales and May 2009 sales.

I didn't realize Vibe sales had tanked to that extreme in 2009. They were still 30% of the entire Buick line - but the Buicks are all more expensive - possibly more profitable (and more profitable can also be defined as lower loss).

What is impressive is that Chevy sold 9,671 HHR's in May '09.

[jake75]

There was an article in today's Wall St Jrl about NUMMI. Stated that NUMMI had NEVER turned a profit with an inference it was due to being located near SF, a high cost area.

So maybe GM will have to pay Toyota to take it off GM's hands.

Of course "profit" is a bookkeeping concept - often is hard to define. The lack of profit might be due to absorbing some of Toyota's and GM's overhead.

Depreciation is also a bookkeeping entry. If the bookkeeping depreciation was more than the actual depreciation, that can turn a loss into a profit.

[psiu]

Quote, originally posted by jake75 »

There was an article in today's Wall St Jrl about NUMMI. Stated that NUMMI had NEVER turned a profit with an inference it was due to being located near SF, a high cost area. So maybe GM will have to pay Toyota to take it off GM's hands. Of course "profit" is a bookkeeping concept - often is hard to define. The lack of profit might be due to absorbing some of Toyota's and GM's overhead. Depreciation is also a bookkeeping entry. If the bookkeeping depreciation was more than the actual depreciation, that can turn a loss into a profit.

Depends on who is doing the defining--it's like the movie industry where the studios will tack on everything from anywhere to claim that a movie didn't make a profit. Did you know Forrest Gump didn't make a profit? LOL according to them it didn't!

[ned23]

Quote, originally posted by michaelgt »

In 2008, 46,551 Vibes were delivered and 137,197 Buicks were delivered in the US. For the first 5 months of 2009, 11,395 Vibes were delivered and 38,622 Buicks were delivered. Data is from the GM Press release for December 2008 sales and May 2009 sales.

I thought I saw a figure of almost 70,000 Vibes for 2008. The news article on Nuumi said the plant turned out 71,000. Surely 60,000 those are not still sitting on lots?

"Tomasu said Nummi produced 342,012 vehicles in 2008. About 21 percent of these were Vibes made for GM, with the bulk of production at Fremont going toward the two Toyota vehicles."

21% of 342,000 is 71,000

http://www.sfgate.com/cgi-bin/...J.DTL

[michaelgt]

Quote, originally posted by ned23 »

I thought I saw a figure of almost 70,000 Vibes for 2008. The news article on Nuumi said the plant turned out 71,000. Surely 60,000 those are not still sitting on lots? "Tomasu said Nummi produced 342,012 vehicles in 2008. About 21 percent of these were Vibes made for GM, with the bulk of production at Fremont going toward the two Toyota vehicles." 21% of 342,000 is 71,000 http://www.sfgate.com/cgi-bin/...J.DTL

They produced 71,000 in calendar year 2008. GM delivered 46,551 in calendar year 2008. They have delivered 11,395 through May, And the delivered 6116 in June. (Half of what was delivered in the first five months, Hopefully this clears up the numbers.

[jake75]

Quote, originally posted by michaelgt »

They produced 71,000 in calendar year 2008. GM delivered 46,551 in calendar year 2008. They have delivered 11,395 through May, And the delivered 6116 in June. (Half of what was delivered in the first five months, Hopefully this clears up the numbers.

So there are literally 10's of thousands new Vibes sitting on dealer lots? Or on GM storage lots? Does Nummi build Vibes only to fill specific dealer orders, or do they also build on "spec"?

[michaelgt]

Quote, originally posted by jake75 »

So there are literally 10's of thousands new Vibes sitting on dealer lots? Or on GM storage lots? Does Nummi build Vibes only to fill specific dealer orders, or do they also build on "spec"?

Jake
There is more then 10k Vibes sitting on dealer lots, and much more at the end of Dec 08. GM builds to specific dealer orders. Dealers agree to order so many vehicles per month.

I am not sure what information has been made public on the number of Vibe's produced in 2009 to date.

[micbarric]

Looks like Toyota may seek a federal 'bailout' for NUMMI...

http://www.bloomberg.com/apps/...wA8eA

"July 1 (Bloomberg) -- Toyota Motor Corp., stung by General Motors Corp.’s plan to abandon their shared California auto- assembly plant, may seek federal aid to preserve the factory, said a U.S. lawmaker."

[jake75]

Quote, originally posted by michaelgt »

Jake There is more then 10k Vibes sitting on dealer lots, and much more at the end of Dec 08. GM builds to specific dealer orders. Dealers agree to order so many vehicles per month. I am not sure what information has been made public on the number of Vibe's produced in 2009 to date.

I surmise that GM might also have offered certain incentives for dealers to order Vibes - the deal I got in Jan., and some of the advertised specials I have seen recently, look like maybe this was an offer like "order x Vibes and we'll give you an extra $2,000 on each". Some dealers may try to keep that in their pocket, others have just passed it on to customers. Why would GM do that? Perhaps before the bankruptcy GM had a obligation to build x number of cars at Nummi and this was the best way to meet that requirement. I am just speculating but the evidence is strong that there was/is something going on of this nature.

[michaelgt]

Jake

I think that you are a wise man! (I did not say old! )

[ColonelPanic]

Quote, originally posted by micbarric »

Looks like Toyota may seek a federal 'bailout' for NUMMI...

No way that a plant that builds Toyotas would ever need a bailout! I thought that was reserved for just the failing American industry.

Doesn't surprise me, Japan bails out their auto companies all the time. I figured it wouldn't take long for them to want in on the action here too.

[ned23]

Quote, originally posted by micbarric »

Looks like Toyota may seek a federal 'bailout' for NUMMI... http://www.bloomberg.com/apps/...wA8eA "July 1 (Bloomberg) -- Toyota Motor Corp., stung by General Motors Corp.’s plan to abandon their shared California auto- assembly plant, may seek federal aid to preserve the factory, said a U.S. lawmaker." Those Japanese area quick study. They learn fast

[ned23]

Quote, originally posted by ColonelPanic »

No way that a plant that builds Toyotas would ever need a bailout! I thought that was reserved for just the failing American industry. Doesn't surprise me, Japan bails out their auto companies all the time. I figured it wouldn't take long for them to want in on the action here too.

Demand for cars is leveling. When you build high quality cars that last longer, and median income falls, don't be surprised if we suddenly don't need as many cars as we used to. Need to trim the excess somewhere.