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Toyota to end contract at California auto plant

WASHINGTON — Toyota Motor Corp. said Thursday it plans to end production in March 2010 at a California joint venture where it has built vehicles with General Motors.

The decision would mean the shutdown of the sole auto assembly plant on the West Coast if no other carmaker emerges to keep it going.

Toyota's board voted early Thursday to end the company's production contract at the Fremont, Calif.-based New United Motor Manufacturing Inc., spokeswoman Cindy Knight confirmed.

Toyota had said previously that it was moving toward liquidating its stake in the California facility after the plant's fate was thrown into question in June when GM announced it was withdrawing from the 50-50 joint venture. General Motors Corp. emerged from bankruptcy and the company's stake in NUMMI is now part of Motors Liquidation Co. — also known as Old GM — where it will be liquidated under court supervision.

The NUMMI plant, established in 1984, employs 4,600 workers. Toyota builds the Corolla compact car and the Tacoma pickup truck at the plant and until recently GM built the Pontiac Vibe station wagon there.

California lawmakers have discussed with Toyota a package of financial incentives to keep the plant open. The six-month period before Toyota ends production gives the state time to find another automaker or manufacturer that may want to use the facility.

But Sen. Dianne Feinstein, D-Calif., called the decision a "devastating blow" that would likely lead to the plant's closure. She said the economic package included tax breaks, the ability to buy cheaper electricity, the waiving of sales taxes and $20 million in state aid to improve shipping facilities at the plant.

"Yet as the days went on, the officials at Toyota grew more remote and less transparent. My calls were not returned, which gave me the distinct idea and view that they were going to withdraw from the venture — which was confirmed with today's news," Feinstein said.

Feinstein said she was hopeful the facility could attract "some new form of manufacturing and I would hope that Toyota would be helpful in that endeavor."

Sen. Barbara Boxer, D-Calif., said in a statement she was disappointed by the development and that "we must now do everything we can to help the thousands of NUMMI workers and other businesses in the community that depend on the plant."

Japanese media outlets reported Wednesday that Toyota would slash worldwide capacity by 700,000 to 1 million vehicles and the NUMMI production was expected to be part of the global plan.

Knight declined further comment but said the company planned to provide additional details on the decision later Thursday.