This article is about the car factory 'New United Motor Manufacturing, Inc.'. For the suburb of Turku, Finland, see Nummi. For the Finnish municipality, see Nummi-Pusula. For the coin, see Nummus.
New United Motor Manufacturing, Inc. (NUMMI) was an automobilemanufacturing company in Fremont, California, jointly owned by General Motors and Toyota that opened in 1984 and closed in 2010. On October 27, 2010, its former plant reopened as a 100% Tesla Motors-owned production facility, known as the Tesla Factory. The plant is located in the East Industrial area of Fremont between Interstate 880 and Interstate 680.
NUMMI was established at the former General MotorsFremont Assembly site that closed in 1982; it had been a GM plant since 1962. GM and Toyota reopened the factory as a joint venture in 1984 to manufacture vehicles to be sold under both brands.
GM saw the joint venture as an opportunity to learn about lean manufacturing from the Japanese company, while Toyota gained its first manufacturing base in North America and a chance to implement its Taylorism-inspiredproduction system in an American labor environment, avoiding possible import restrictions. GM employees went to Toyota's Takaoka plant in Japan and improved production at NUMMI,Spring Hill and other sites, particularly after Jack Smith spread the program.
Up to May 2010, NUMMI built an average of 6000 vehicles a week, or nearly eight million cars and trucks since opening in 1984. In 1997, NUMMI produced 357,809 cars and trucks, peaking at 428,633 units in 2006.
GM pulled out of the venture in June 2009 due to its bankruptcy, and several months later Toyota announced plans to pull out by March 2010. The closure was opposed by city officials, including Fremont Mayor Bob Wasserman, who lobbied to keep NUMMI in the city. However, at 9:40am on April 1, 2010, the plant produced its last car, a red Toyota Corolla S believed to be destined for a museum in Japan. Production of Corollas in North America moved to Toyota Motor Manufacturing Mississippi's assembly plant in Blue Springs, Mississippi and Toyota Motor Manufacturing Canada's 'North' assembly plant in Cambridge, Ontario.
On May 20, 2010, it was announced that Tesla Motors had purchased part of the NUMMI plant and rename it Tesla Factory, producing the Tesla Model S. By 2016, the plant had 6,000 employees, with plans for more.
The plant spans the equivalent of about 88 football fields, and is configured into a main building that does the final assembly of vehicles and five other facilities:
- Plastics facility fabricating bumpers, instrument panels, interior panels, and others;
- Stamping facility that fabricates all visible sheet metal parts;
- Welding facility that assembles all metallic parts into one rigid unit; and
- Two paint facilities, one for passenger vehicles and another for truck cabs.
In the initial 20 months of hiring, NUMMI hired 2,200 hourly workers—85% from the old GM-Fremont plant, among them the old union hierarchy. The union also played a role in selecting managers, except for 16 directly assigned by GM and about 30 Toyota managers and production coordinators from Japan, including the CEO, Tatsuo Toyoda, part of the company’s founding family. By 2006, the plant had 5,500 employees.
Until the facility's closure in April 2010, 4,700 workers were employed. NUMMI employees were represented by The International, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) Local 2244.
The first model NUMMI produced was the Chevrolet Nova (1984–1988). This was followed by the Geo Prizm (1989–1997), the Chevrolet Prizm (1998–2002) and the Hilux (1991–1995, predecessor of the Tacoma), as well as the Toyota Voltz, the Japanese right-hand drive version of the Pontiac Vibe. Both of the latter are based on the Toyota Matrix.
Production of the Pontiac Vibehatchback was discontinued in August 2009 as GM phased out the Pontiac brand in the midst of a bailout. Along with Saturn and Hummer, Pontiac joined Oldsmobile (which had been discontinued after 2004) among the four GM brands that are no longer in production.
Beginning in September 1986, the NUMMI plant produced the Corolla. In January 1995, it began producing the Toyota Tacomapickup truck.
The Fremont Assembly factory which NUMMI took over was built by General Motors and operated by them from 1962 to 1982, when the Fremont employees were "considered the worst workforce in the automobile industry in the United States", according to the United Auto Workers. Employees drank alcohol on the job, were frequently absent (enough so that the production line couldn't be started), and even committed petty acts of sabotage such as putting "Coke bottles inside the door panels, so they'd rattle and annoy the customer." GM was departmentalized as per Henry Ford's Division of labour, but without the necessary communication; management did not consider workers' view of production, and quantity was preferred over quality.
The idea of reopening the plant emerged from the need that GM had to build high-quality and profitable small cars and the need Toyota had to start building cars in the United States, a requirement due to the possibility of import restrictions by the U.S. Congress. The goal was to produce high quality at low cost, but supported by including workers in the process. The choice of the Fremont plant and its workers was unusual because of the previous problems. In spite of the history and reputation, when NUMMI reopened the factory for production in 1984, 85% of the troublesome GM workforce was rehired, with some sent to Japan to learn the Toyota Production System. Workers who made the transition identified the emphasis on quality and teamwork by Toyota management as what motivated a change in work ethic. Among the cultural changes were the same uniform, parking and cafeterias for all levels of employment in order to promote the team concept, and a no-layoff policy.Built-in process quality and employee suggestion programs for continual improvement were other changes.Consensus decision-making reached management level, in contrast with the old departmentalization.
By December 1984, the first car, a yellow Chevrolet Nova rolled off the assembly line. And almost right away, the NUMMI factory was producing cars at the same speed and with as few defects per 100 vehicles as those produced in Japan, with higher worker satisfaction.
In 1988 NUMMI operated at 58.6% capacity, and had not reached break-even by 1991.
Despite the early success at Fremont, by 1998 (15 years later) GM had still not been able to implement lean manufacturing in the rest of the United States, though GM managers trained at NUMMI were successful in introducing the approach to its unionized factories in Brazil.
Events as closure approached
Some of the challenges for the factory were higher costs. Daily tours of the plant, offered free to the public, were ended on February 27, 2009.
On June 29, 2009, General Motors announced that they would discontinue the joint venture with Toyota. The announcement was made following GM CEO Fritz Henderson announcing in April that General Motors would discontinue the Pontiac Vibe production at NUMMI. The two automakers were in discussions but could not find a suitable product to be produced at the factory. “After extensive analysis, GM and Toyota could not reach an agreement on a future product plan that made sense for all parties,” GM North America President Troy Clarke said in a statement. "Toyota’s hope was to continue the venture and we haven’t yet decided any plans at the factory,” said Hideaki Homma, Toyota’s Tokyo-based spokesman. “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.” Before GM decided to sever its stake in the NUMMI joint venture, Toyota was considering offering a version of its Prius hybrid to GM that would be built at the factory and sold as a GM model but Toyota has indicated that it was seriously considering exiting the venture also.
On August 27, 2009, Toyota announced that it would discontinue its production contract with NUMMI, shifting Tacoma production to its San Antonio, Texas pickup plant and Corolla assembly to Blue Springs, Mississippi. A total of 5,400 employees were affected, including 4,550 UAW hourly workers.
In November 2009, Toyota's head of U.S. sales took calls from autoworkers, saying that though it has been a difficult decision to shut down the plant, "the economics of having a plant in California so far away from the supplier lines" in the Midwest "just doesn't make business sense" for Toyota to continue running the NUMMI plant. Meanwhile, autoworkers prepared for the shut down by refreshing skills and planning for career transitions. Federal, state, and local officials also participated in the transition discussions. In March 2010, 90% of the 3,700 UAW workers at the plant approved a $281 million severance package averaging $54,000, paid by Toyota to the plant's 4,700 employees.
It should be noted that NUMMI was Toyota's only unionized plant in the U.S.; production of the Toyota models that used to be made at NUMMI was moved to Toyota's non-union plants in Southern states.
Alternatives to closure
In January 2010, a possible use of the land was proposed: a new stadium for home games of the Oakland Athletics of Major League Baseball. It is close to the proposed site of Cisco Field, which was never formally approved.
State officials crafted sales tax exemption on new factory equipment to preserve Nummi. A regional committee was formed in February 2010 to investigate the closure of the plant, and the facility was appraised while operating.
On March 10, 2010, Aurica Motors announced a proposal to save the NUMMI automotive plant and the jobs associated with it. The company said that it intended to raise investment capital and garner federal economic stimulus funds to help retrain the workers and retool the facility for production of electrical vehicles.
The NUMMI plant ceased operations on April 1, 2010, ending the Toyota-GM joint venture. California's last automobile manufacturing plant saw its last car, a Corolla, roll off the assembly line. NUMMI sold off equipment at an auction, with robots and tooling going to Toyota plants in Kentucky, Texas and Mississippi. NUMMI sold some equipment to Tesla for $15 million.
After NUMMI: use of the land and facility
Further information: Tesla Factory
On May 20, 2010, Tesla Motors and Toyota announced a partnership to work on electric vehicle development, which included Tesla's partial purchase (210 of 370 acres) of the former NUMMI site for $42 million, mainly consisting of the factory building, but not equipment. Tesla CEO Elon Musk said the Tesla S sedan will be built at the plant. When Tesla took over the location in 2010, they renamed it the Tesla Factory. Tesla would be collaborating with Toyota on the "development of electric vehicles, parts, and production system and engineering support". According to Tesla Motors' plans, the plant would first be used to produce the Tesla Model S sedan with "future vehicles" following in the coming years. The plant was projected to produce 20,000 vehicles a year and employ 1,000 workers to start.
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GM and Toyota launched their joint auto plant where GM’s work force had been at its worst. Here’s what happened next. And why.
In Spring 2010, New United Motor Manufacturing Inc., the famed joint venture experiment by Toyota Motor Corp. and General Motors Co., will close its doors. As someone who was there at its launch and witnessed a striking story of phenomenal company culture reinvention, I am often asked: “What did you really do to change the culture at NUMMI so dramatically, so quickly?”
I could answer the question from high altitude by simply saying, “We instituted the Toyota production and management systems.” But in the end that doesn’t explain much. A better way to answer is to describe more specifically what we actually did that resulted in turning the once dysfunctional disaster — GM’s Fremont, California, plant — into a model manufacturing plant with the very same workers.
And describing what we did, and what worked so profoundly, says some interesting things about what “culture” is in the first place.
Backstory: Why NUMMI Began, and How It Fared
The Leading Question
How can managers change the culture of their organization?
- Start by changing what people do rather than how they think.
- “It’s easier to act your way to a new way of thinking than to think your way to a new way of acting.”
- Give employees the means by which they can successfully do their jobs.
- Recognize that the way that problems are treated reflects your corporate culture.
Toyota hired me in late 1983 to work on the Toyota side of its new venture with GM. I was assigned to a newly formed group at the company’s Toyota City headquarters in Japan to develop and deliver training programs to support its impending overseas expansion. All of this was just happening. NUMMI didn’t even have a name yet. The agreement with the United Auto Workers union was yet to be signed. There weren’t yet any employees of NUMMI, nor even any managers. NUMMI wasn’t successful; it wasn’t famous. It was just a dream.
Winner of the Richard Beckhard Memorial Prize
Why was the joint venture attempted? GM, for its part, had a few very tangible business objectives that it thought NUMMI could address. It didn’t know how to make a small car profitably. It wanted to put an idle plant and work force back on line.
About the Author
John Shook is an industrial anthropologist and senior advisor to the Lean Enterprise Institute in Cambridge, Massachusetts. He is the author of, among other books, Managing to Learn: Using the A3 Management Process to Solve Problems, Gain Agreement, Mentor and Lead (Lean Enterprise Institute, 2008).