Toyota's NUMMI Call Painful Reminder of Industry Glut

It sounds strange to say it, but it's true. The auto industry still has too many plants with the capacity to crank out millions more cars and trucks than needed. It's a huge problem worldwide the auto makers are slowly slogging their way through. That includes Toyota.

The company announcing plans to close its NUMMI plant in California is not a surprise. It's been well known for some time that Toyota had too much capacity. A problem driven home by slumping global auto sales. So when GM decided it would pull out of its commitment at the NUMMI plant, it gave Toyota the opening it needed to get out of the plant as well.

Much will be made about the fact Toyota has never closed a plant before. Much will be made by those who think this shows Toyota is slipping. Both are worthy points to discuss.

But let's be clear. At the end of the day, Toyota closing its NUMMI plant shows the auto industry still has too many plants around the world.
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