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General Motors Corp. (GMGMQ) announced it will end its 25-year manufacturing joint venture with Toyota Motor Corp. (TM) in Fremont, Calif., dealing the Japanese auto maker another blow as it struggles to right its U.S. operations.

Toyota said GM's withdrawal from the venture will exacerbate already-difficult business conditions for the Japanese auto maker, which last year posted its first annual loss in nearly 70 years.

"While we respect this decision by GM, the economic and business environment surrounding Toyota is also extremely severe, and so this decision by GM makes the situation even more difficult for Toyota," the company said in a statement Monday.

Toyota said it will "consider alternatives" for the factory, but didn't elaborate.

The plant currently produces the Pontiac Vibe, which GM will stop making within 60 days, and the Toyota Corolla.

For GM, the joint venture was an opportunity to see first-hand Toyota's revolutionary system of lean manufacturing, streamlined business practices that have since been widely adopted throughout the world. Toyota, then considering whether to begin producing vehicles in North America, wanted an opportunity to test its production system on a U.S. workforce.

The future of the factory became uncertain after GM announced last week plans to discontinue the Pontiac Vibe, which is built there, by the end of August. The auto maker is selling or ending four of its eight brands and eliminating many models under a plan to downsize and restructure in bankruptcy court.

Toyota had been accounting for nearly three-quarters of the plant's output.

"We have enjoyed a very positive and beneficial partnership with Toyota for the past 25 years, and we remain open to future opportunities of mutual interest," said GM North America President Troy Clarke.

GM's ownership interest in the venture will become part of "old GM" to be sold off as part of the bankruptcy proceedings.

-By Sharon Terlep, Dow Jones Newswires; 248-204-5532; sharon.terlep@dowjones.com

(Kevin Kingsbury contributed to this report.)