updated 8/27/2009 9:03:25 PM ET 2009-08-28T01:03:25

Toyota is pulling out of a California factory joint venture it had previously run with General Motors — the first time the Japanese automaker is closing a major auto assembly plant ever.

Toyota Motor Corp. said Friday it will stop production at its Fremont, California-based New United Motor Manufacturing Inc., or NUMMI, in March 2010, and will move production to its other plants in the U.S., Canada and Japan.

Production of the Corolla subcompact will be moved to its Cambridge, Ontario, Canada plant, as well as Japan, and Tacoma pickups will be produced at its plant in San Antonio, Texas, it said in a statement.

The decision had been widely expected after General Motors Co. said in May that it was withdrawing from the 50-50 joint venture.

But hopes had been great in California that the historic joint venture launched in 1984 between two major American and Japanese automakers could stay open. The plant will be closed unless another company steps in to keep it going.

Executive Vice President Atsushi Niimi said Toyota studied other options but couldn’t keep NUMMI open.

“It just would not be economically viable to continue the production contract with NUMMI. This is most unfortunate, and we deeply regret having to take this action,” he said.

Hit hard by the global auto slump, Toyota has been struggling to achieve a turnaround. It racked up its worst loss ever of 436.9 billion yen ($4.6 billion) for the fiscal year ended March 31, and is expecting more red ink for the fiscal year through March 2010.

Toyota is more dependent on the North American market than are other major Japanese automakers, and has suffered the worst fallout from the U.S. financial crisis that sent car sales tumbling since last year.

But Toyota said it remains committed to the North American market and will make production changes to ensure a steady vehicle supply for its dealers and customers.

General Motors’ Pontiac Vibe production ended earlier this month. GM emerged from bankruptcy and its NUMMI stake has become a part of Motors Liquidation Co. — also known as Old GM — where it will be liquidated under court supervision.

The end of NUMMI marks a closure for a landmark cross-Pacific tie-up between two industry greats that had competed — and cooperated — over the decades.

Toyota executives say Toyota learned a lot from GM, especially in Toyota’s early years as it was trying to become a global automaker.

“NUMMI has been a groundbreaking model of Japan-U.S. industry collaboration and we are proud of its achievements,” said Niimi. “Toyota has learned much about automobile production in the U.S. through NUMMI, and these have been an invaluable 25 years.”

Toyota, founded in 1937, became the world’s biggest automaker in 2008, replacing GM which had the honors for 77 years. GM sold nearly 8.4 million cars and trucks around the world in 2008, falling short of Toyota’s nearly 9 million.

But Toyota has been sharply scaling back production globally lately because of its financial troubles. Toyota has said recently that it is expecting to sell 6.6 million vehicles in the fiscal year through March 2010.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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