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Toyota Motor Corp. wants to close a California assembly plant it owns jointly with theformer General Motors Corp., said Toyota executives, a move that could bring greaterefficiency to its U.S. operations.But the Japanese car maker faces a number of issues, the executives said, including hundredsof millions of dollars in potential closure costs. Those factors could complicate any finaldecision, they said.Toyota is in negotiations with the former General Motors Corp. -- the "Old GM" left behindin bankruptcy court after the reorganized U.S. auto maker, called General Motors Co., wasrelaunched in July -- to figure out how it could walk away from the plant south of SanFrancisco. "Our gut feeling is we need to end production" at the plant, said one of theexecutives.The reorganized GM last month decided to abandon the factory, called New United MotorManufacturing Inc. or Nummi. It has mostly been a money-loser since Toyota and GMestablished the partnership in 1984. It makes about 400,000 vehicles a year.Separately, GM said Tuesday it planned to raise its overall U.S. production 20% in the thirdand fourth quarters and announced it would reinstate 1,500 jobs."The uptick is an encouraging sign that vehicle sales are turning around," said Tim Lee, GMgroup vice president of global manufacturing and labor.The auto maker plans to add about 60,000 vehicles to its second-half production. It is GM'sfirst production increase since car sales began their sharp decline last year. GM last summeradded shifts at several small-car plants to meet demand in the wake of $4-a-gallon gas prices,but quickly cut back.Discussions over the Nummi plant come as Toyota's new chief executive, Akio Toyoda, andhis management team look for ways to solve excess capacity, a primary drag on Toyota'sfinancial performance. The problem is particularly acute in North America, where thecompany added plants earlier this decade to meet then-strong demand.Toyota's North American plants are operating at about 50% to 60% of capacity, according toconsulting firm CSM Worldwide.Production at Nummi consists mostly of Toyota's Tacoma truck and Corolla compact car.Production of the Pontiac Vibe, which Nummi makes for GM, is due to end this month.A Toyota executive said Toyota could shift Corolla production to a plant in Canada and theTacoma to San Antonio, while a Japan plant and possibly a plant in Mexico could produce atleast temporarily these models.California lawmakers and Gov. Arnold Schwarzenegger have appealed to Toyota to saveNummi and its 4,600 jobs, a majority of which are represented by the United Auto Workersunion.The Toyota executives said the company is trying to make a decision on Nummi's future bythe end of this month, but representatives from Toyota and the old GM are expected to meetlater this month for only the second time in an effort to nail down terms and conditions."There are still a mountain of unresolved issues" concerning, among other things, the plant'shourly workers and the parts producers that established operations around the Fremont, Calif.,plant to supply it, said one of the executives.Because of environmental damage caused by the plant, the site would require substantialfunds to clean it up before it could be offered for sale, an executive said. Nummi also hasdebts on its own, said executives.A closure could also raise questions over Toyota's commitment to stable employment. Mr.Toyoda and his new top managers have pledged not to close any Toyota plants amid theglobal economic downturn.The Toyota executives said they tried to persuade GM to uphold the joint venture down to thelast minute, offering at one point to let GM make at the plant a version of the popular hybridPrius that GM could sell under one of its own brands.GM couldn't be reached for comment. Sharon Terlep contributed to this article.Write to Norihiko Shirouzu at norihiko.shirouzu@wsj.com