Goodbye, NUMMI: How a Plant Changed the Culture of Car-Making

[Omaha Steve]

http://www.origin.popularmechanics.com/automotive/new_cars/4350856.html

The GM and Toyota joint-venture plant, NUMMI, shut down on April 1, leaving behind a rich, but muddy, history. Here's how this auto plant changed the face of General Motors and planted its name in the history books.
By David Kiley
Published on: April 2, 2010



The last Toyota Corolla rolled off the line at the New United Motor Manufacturing Inc. (NUMMI) plant in Fremont, CA on April 1, a week after the last Toyota Tacoma pickup made at the plant received its final welds, buff and polish. The Pontiac Vibe, which was made at the joint-venture Toyota, General Motors plant rolled off the line a few months ago. The plant that has long been studied in business schools for how it transformed a workforce is closed for the second time in 28 years.

The plant that broke so much ground back in 1984 for how it transformed a dysfunctional workforce is in many ways a relic. Even before GM's bankruptcy last year forced it to make a decision to pull out of NUMMI, a preface to the plant's closure, the relationship between the two companies had soured like two people in what has become termed a "zombie marriage," in which husband and wife don't even know why they are still married other than for the kids.

Last year, the plant employed 4700 people to build Toyota Tacomas, Corollas and Pontiac Vibes. It had only been operating at half-capacity the last two years, making it a substantial money-loser.

NUMMI opened in 1984 as a bold joint venture between General Motors and Toyota. It had been a GM plant between 1962 and 1982, making both cars and light trucks. GM closed the plant, one of its worst in terms of quality, productivity, absenteeism and worker safety. But a year after it was shuttered, GM CEO Roger Smith approached Toyota about the joint venture idea in which GM would gain some technology and insights into Toyota's production system, and Toyota would get a taste of trying to apply its systems and culture on a U.S. workforce.

Just two years after NUMMI opened, Toyota built a sprawling plant of its own in Georgetown, Kentucky, it's biggest facility outside of Japan. And since then, Toyota has opened several more in Texas, Indiana, Ontario, Canada and West Virginia. NUMMI, though, has been Toyota's only union-organized facility in the U.S.

GM's motivation for the joint venture was clear: It couldn't make smaller cars profitably in the U.S. because of high labor costs. And it needed small cars to help its fuel economy ratings. The result was that Toyota built its Corolla sedan and hatchback at NUMMI and sold a version of the car to GM to be marketed as the Chevy Nova.

This is where the trouble first began. GM did a dismal job of marketing the car. And when Chevy cut back its orders of the Nova, plant utilization fell to 75 percent, a level at which the plant can't make money. Besides the decision to name the car Nova, following a car of the same name marketed by Chevy in the late 1970s that was pretty awful, GM was not inclined to spend a lot of money advertising any car that came from the deal because it made no money on it. Because it was essentially a Toyota product with a Chevy badge, there was no profit for GM, especially after it had to start discounting the cars when they hit dealer showrooms.

FULL story at link.

[FarCenter]

1. Then GM rebadged it as the Geo Prism

So that people would not associate it with the Chevrolet's crappy reputation.

That didn't work either. Especially when the Geo brand got ruined as they added models from second-rate Japanese and Korean makers.

[Javaman]

2. This American Life had a show just on this plant last week.

Although the show was good, I have noticed a subtle anti union trend in many of their shows lately. A perfect example was when GM tried to us the NUMMI model in their van nuys plant. Early in the show they state that the plant had nothing but problems and the workers refused to work within the model.

But then later in the show, they state that beginning in 1989 GM was having to cut costs across the board to make up for budget short falls and poor sales and as a result, the van nuys plant had to be shut.

Also as GM was having some massive problems (at other plants) in the early 80's with supposed union issues, those who were interviewed for the show were ex-employees that retired as management claimed to have used drugs on the line, drank booze and had sex during business hours on GM property. However, none of those interviewed had been former line workers who retired as line workers. That was very suspect to me.

The failure was clearly in management. They also used the argument that "unions became so powerful that we couldn't do anything to curtail the various illegal activities of the employees". That single statement was such colossal bullshit. Any union person knows sure as shit, when you become a member you have to adhere to union rules. All the things that management were claiming happened during business hours are clearly a violation of union rules. Any good manager who has a good working relationship with the union boss could deal with these issues very effectively.

But given all the fuck ups regarding productivity and how management treated the workers (also stated in the piece but made it sound as if the line workers answered to no one), is it any wonder that GM failed?

Workers work and management manage. But the Mangers at the GM plant were poorly trained managers who never listened, paid attention or rewarded their workers for good work, ideas for improvement or just general courtesy.

It took the retraining in Japan to get managers to clear the crap out of their eyes and ears.

Several decades of good old boy management is what lead to GM's failings at their plants. Deeply entrenched under-trained managers who ruled plants like little fiefdoms is what was the undoing.

NUMMI was the exception, because they worked closely with the Japanese by sending over teams of workers to get trained until the entire plant was up to speed.

In Van Nuys, they tried the same thing, but without the Japanese counterpart. Once again, because of lack of basic managerial experience or training, no one took to the new way of thinking because rather than capitalizing on the idea of team spirit, managers pit 5 man crew teams against one another and rotated shifts so no one person could hope to ever see an opportunity for job growth. It failed miserably.

A very interesting comment at the end of the show said as much. By the time GM finally filed for bankruptcy, they were at their most productive because by that time, a new generation of managers trained in the NUMMI style had taken over via attrition of the old guard. So with new managerial techniques, things began to improve. Again, it was an improvement over the past managerial failure that made things pick up not the failure of workers not wanting to work.

Simple improvements of just listening to workers complaints and ideas to improve the line production helped things via allowing the workers to understand a that they are part of the GM process of producing something they could be proud of just like management.

A simple thing as stopping the line when something needed to be unfucked, not only improved worker performance and attitude but also allowed GM to produced cars from the NUMMI plant that were less prone to brake down or recall. Or be send to the yard to be unfucked. Fix it when the problem occurs instead of putting it off until later.

Basic common sense, right? But given the age old and badly worn out idea of, "the line must never be stopped or else you will be fired" mentality being the prevailing attitude, GM management only set themselves up for failure.

[Omaha Steve]

3. Your right

See this post in the Labor Forum: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=367x25795

[Javaman]

4. Thanks for the link...

I just wrote "this american life" and provided a quote from the article and it's link.

who knows if it will do any good.