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Goodbye, NUMMI: How a Plant Changed the Culture of Car-Making [View All]

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Omaha Steve Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Apr-02-10 09:16 AM
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Goodbye, NUMMI: How a Plant Changed the Culture of Car-Making
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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.

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