NUMMI – Innovations Made and Lessons Not Learned
By George Straton
Indeed May 21, 2010 was a historic day for the future of the electric vehicle (EV) in North America when it was announced that Tesla Motors would use a portion of the briefly shuttered Toyota Fremont California Final Assembly Plant and receive $50 million in capital from Toyota. That makes Toyota a co-investor with the not-insubstantial Daimler in the niche sports EV company. Rumors of Tesla’s demise stemming from the divorce of the Elon Musk from his wife obviously aren’t scaring away real investors with real money.
The Fremont assembly plant was most recently and famously known by the name of New United Motor Manufacturing Inc (NUMMI), a joint venture launched by GM and Toyota in 1982. Once GM axed its Pontiac Division in 2009, and the Corolla-based Pontiac Vibe ceased production, the joint venture ended. By 1980 GM was responsible for building 50% of all cars sold in North America. Roger Smith, mocked by Director Michael Moore in the film “Roger and Me” was the General’s controversial CEO. Yet Smith had foresight. He realized that new government safety and emissions regulations, rising domestic labor costs and advances being made by the Japanese in automation and quality control could spell the end of the General’s domination of new vehicle market share.
The poster child for the old “General’” was the Fremont Assembly located 20 miles south of Oakland, California. It was a plant that in its hey-day built the famed Olds 442. Without the aid of robotic assembly systems GM Fremont could still pump out 1000 cars and light trucks per day. It is astonishing given that such daily production numbers were nearly on par with what a fully automated NUMMI plant run by Toyota was generating. The old “General” was all about plant managers generating big production numbers. Said managers virtually had greater authority than the company CEO. Stopping the assembly line at GM Fremont was not allowed. It was grounds for firing. Hence a Pontiac Grand Prix would come off the line with a nose clip for a Buick Regal. Sex, drugs and alcohol while “working” on the line was so prevalent that foremen often had to run to taverns, across from the plant, to locate enough hands to start up the line. Line assembly employees would place glass pop bottles inside door panels just to frustrate customers.
In spite of the former plant’s history and reputation, when Toyota-managed NUMMI reopened a new factory on the Fremont site for production in 1984, most of the furloughed GM workforce was rehired, with some sent to Japan to learn the Toyota Production System (T.P.S.). At the time T.P.S. was a regarded a major innovation in lean mass production. By December 1984, the first car, a Chevy Nova, rolled off the assembly line. Right off the bat, the Toyota-managed NUMMI factory was producing cars with as few defects per 100 vehicles as what was coming out of the company’s Japanese plants.
By the mid-1980s, the successes achieved at NUMMI had still not been successfully implemented at other GM assembly plants despite efforts made by GM corporate. Industry insiders lay the blame for such failure on two factors. The first factor was the resistance of plant managers to relinquish the considerable control they exerted in their fiefdoms. The second was the perception of high job security among line workers. UAW workers at other GM plants saw little to benefit by being able to stop the line to re-align a bolt or by working in teams which included line workers and management.
GM plants started to implement lean production techniques a more than a decade after the opening of the NUMMI plant, by which time company’s market share had fallen off appreciably.
When NUMMI closed in April 2010, Toyota had five other newer and more modern plants in North America, none of which employed UAW workers. In fact the UAW workers made $4 per hour in greater pay than workers at other Toyota Plants. It was an easy financial decision for Toyota to shift Corolla and light truck production elsewhere and hand out $50,000 severance packages to the final 4,500 NUMMI hourly workers. Elon Musk expects that when Tesla Model S production is up and running in 2012 the plant will employ 1,000 workers. That number will be a far cry from the more than 7,500 workers that plied the line at NUMMI. Whereas NUMMI had capacity to build 400,000 units per year, Tesla is hinting at a more conservative 20,000 units given the expected $50,000 price tag for the Model S.
NUMMI-produced GM models like Geo Prizm and Pontiac Vibe likely will never get the royal treatment from automotive enthusiasts the way names like Olds Cutlass 442 and Buick GSX have. Yet it does seem strangely satisfying that the site of a former industrial plant which pumped out a thousand cars each day that could barely manage 11 miles per gallon of refined petroleum product has given that will produce vehicles that will not use a single drop of gasoline to operate.