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December 7, 2010 > Toyota sues old GM for California plant damages

Toyota sues old GM for California plant damages

By Yuri Kageyama, AP Business Writer

TOKYO (AP), Dec 01 - Toyota is suing the company handling bankrupt General Motors' assets, demanding $73 million in damages from the shuttering of a joint-venture California plant.

Toyota Motor Corp. spokesman Paul Nolasco said Wednesday the lawsuit was filed Nov. 24 for research and development costs that weren't recouped because of the shuttering of New United Motor Manufacturing Inc., or Nummi, plant in Fremont, California.

The lawsuit, filed in U.S. Bankruptcy Court Southern District of New York, targets so-called ``old GM,'' or Motors Liquidation Co., which is separate from General Motors Co., the Detroit-based automaker that is recovering after a U.S. government bailout.

Separately, Nummi is demanding $360 million from Motors Liquidation Co. for costs related to investments in the plant that weren't recovered.

Nolasco said talks had been going on among Nummi, Toyota and the old GM for about a year, but were never resolved. Toyota feels the departure of GM from the joint venture unfairly left Toyota to sort out what was left, he said.

Nummi was a 50-50 joint venture between Toyota and General Motors, which began in 1984, and was heralded in its heyday as a new partnership that crossed borders, allowing both sides to learn from each other.

After General Motors pulled out, Toyota stopped production at Nummi in April.

Since then, Toyota has forged a new relationship with U.S. luxury electric-car maker Tesla Motors Inc.

Tesla has set up a factory at the Nummi site for the next-generation electric sedan in partnership with Toyota. Model S sedan production is expected to start 2012, and the plant has already begun hiring.

In November, General Motors pulled off an IPO worth $15.8 billion, signaling the revival of an American icon that collapsed into bankruptcy protection and was rescued with a $50 billion bailout from U.S. taxpayers.

Toyota, which makes the Prius hybrid and Lexus luxury models, dethroned General Motors as the world's biggest automaker in 2008.

Since last year, it has suffered a serious image problem because of massive recalls around the world, and faces hundreds of lawsuits of its own in the U.S. related to accidents suspected of being linked to quality lapses.

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