Wikipedia

NUMMI

This article is about the car factory 'New United Motor Manufacturing, Inc.'. For other uses, seeNummi (disambiguation).

New United Motor Manufacturing, Inc.(NUMMI) was an Americanautomobilemanufacturingcompany inFremont, California,jointly owned byGeneral MotorsandToyotathat opened in 1984 and closed in April 2010. The plant is located in the East Industrial area of Fremont next to theMud SloughbetweenInterstate 880andInterstate 680,the plant's peak production year was 2006, when it manufactured 428,633 vehicles.

New United Motor Manufacturing, Inc. (NUMMI)
Company typeJoint venture
IndustryAutomotive
PredecessorGMFremont Assembly(1960–1982)
FoundedDecember 1984(December 1984)
DefunctApril 1, 2010(April 1, 2010)
FateDissolved
Headquarters
Fremont, California
,
United States
ProductsCompact cars and trucks
Production output
428,633 vehicles (2006)
ServicesAutomotive manufacturing
OwnerGeneral MotorsandToyota
Number of employees
5,500 (2006)
Websitenummi(defunct)

After the plant was closed by its owners, the facility was sold toTeslaand reopened in October 2010, becoming known as theTesla Fremont Factory.

History

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Background

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Before NUMMI, the site was the formerFremont AssemblythatGeneral Motorsoperated between 1962 and 1982.[1][2][3]Employees at the Fremont plant[4]were "considered the worst workforce in the automobile industry in the United States," according to a later recounting by a leader of the workers' own union, theUnited Auto Workers(UAW).[5][6]

GM as a company wasdepartmentalized(design, manufacturing) as perHenry Ford'sdivision of labor,but without the necessary communication and collaboration between the departments. There was an adversarial relationship between workers and plant supervisors, with management not considering the employees' view on production, and quantity was preferred over quality.[6][7][8]Like all American car plants, the production lines at Fremont seldom stopped, and when mistakes were made, cars continued down the line with the expectation that they would be fixed later.[6]By the early 1980s, the adversarial relationship had deteriorated to the point where employees drank alcohol, smoked marijuana (at the time, an illegal activity), were frequently absent (enough so that the production line could not 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."[5][6]

Attempts to discipline workers were often met with grievances or even strikes, putting the plant into near-continuous chaos. By 1982, GM had had enough and closed Fremont Assembly and laid off its thousands of workers.[6]

Transforming Fremont Assembly into NUMMI

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At about the same time, GM was struggling to profitably build high-quality and fuel-efficient small cars that consumers demanded after theenergy crisis of the 1970s.Consumers started turning to foreign automakers for these vehicles, prompting the U.S. Congress to consider import restrictions to protect the domestic auto industry.[5][6]That led GM and Toyota to team up and create New United Motor Manufacturing, Inc. (NUMMI), ajoint ventureto manufacture vehicles to be sold under both brands.[3]

GM saw the joint venture as a way to get access to quality small cars[6]and an opportunity to learn about theToyota Production SystemandThe Toyota Way,a series oflean manufacturingand management philosophies that had made the company a leader in the automotive manufacturing and production industry.[9]For Toyota, the factory gave the company its first manufacturing base in North America allowing it to avoid tariffs on imported vehicles[10]and saw GM as a partner that could show them how to navigate the American labor environment, particularly relations with theUnited Auto Workersunion.[11]: 4, 10 [12][6]

The companies made the unusual choice to remake the troubled Fremont Assembly into the new NUMMI plant. The leadership of the UAW union insisted on re-hiring the same union leadership that had overseen GM's worst workforce. GM was against it, but Toyota agreed, believing that their system could turn things around. However, Toyota insisted that the plant would need to operate differently and old seniority rules would not apply. The workers hated the proposed changes, but desperately needed jobs. Ultimately, over 85% of NUMMI's initial workforce were the workers laid off at Fremont Assembly in 1982.[11]: 11–12 GM would also assign 16 managers to the plant and Toyota sent 30 managers and production coordinators from Japan, including the CEO,Tatsuro Toyoda,part of the company's founding family.[13]

Ahead of the reopening of the plant, Toyota sent many of the workers toToyota's Takaoka plant in Japan[11]: 9 to learn theToyota Production Systemand actually work for a few days on the assembly line.[5][6]Workers who made the transition identified the emphasis on quality and teamwork by Toyota management as what motivated a change in work ethic.[5][6]Among the cultural changes were the same uniform, parking and cafeterias for all levels of employment in order to promote a team concept, and a no-layoffpolicy.[11]: 14, 16, 33 Built-in process qualityand employee suggestion programs forcontinual improvement[11]: 33 were other changes.[11]: 18 Consensus decision-makingreached management level, in contrast with the olddepartmentalization.[11]: 20 

By December 1984 (two years after the closure of Fremont Assembly), NUMMI's first car, a yellowChevrolet Nova,rolled off the assembly line. The plant started producing the Toyota Corolla in September 1986.[3]Almost right away, the NUMMI factory was producing cars at the same speed as the Japanese factories and Corollas produced at NUMMI were judged to be equal in quality to those produced in Japan with a similar number of defects per 100 vehicles.[11]: 23 [5][6]

In 1990, for the 1991 model year, Toyota started building theToyota Hilux(also known as the Toyota Pickup) at NUMMI, allowing the company to completely avoid thechicken tax,a 25 percenttariffonlight trucksimposed in 1964. Previously, the company had avoided a large portion of the tariff by importing the truck as an incompletechassis cab(which included the entire truck, less the truck bed) which only faced a 4% tariff.[14]Once in the United States,Toyota Auto Body California(TABC) would produce the truck beds and attach them to the trucks. TABC was the first manufacturing investment in the U.S. for Toyota.[15]This tariff loophole was closed in 1980.

NUMMI did face some financial challenges, with cars costing more to build than at other GM plants and only operating at 58.6% capacity by 1988.[16]The plant had not reachedbreak-evenby 1991.[11]: 14 

In January 1995, NUMMI began producing theToyota Tacoma,a pickup truck designed exclusively for the North American market.[3]

Up to May 2010, NUMMI built an average of 6,000 vehicles a week, or nearly eight million cars and trucks since opening in 1984.[5][6]In 1997, NUMMI produced 357,809 cars and trucks.[17]Production reached its annual peak of 428,633 units in 2006.[18]

The end of the joint venture

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Toyota took the lessons it learned from NUMMI and went on to establish the wholly-owned Toyota Motor Manufacturing USA (later renamedToyota Motor Manufacturing Kentucky) andToyota Motor Manufacturing Canadaplants in 1986, and by 2009 the company was operating a dozen manufacturing facilities in North America.[19]However, NUMMI remained Toyota's only unionized plant in the United States.[20]

GM executives, particularly CEOJohn F. Smith Jr.,attempted to spread the Toyota Production System to other assembly plants,[18][21][22]but it proved largely unsuccessful. Despite having a front row seat to learn about the production system, by 1998 (15 years later) GM had still not been able to implementlean manufacturingin the rest of the United States,[6][23]though GM managers trained at NUMMI were successful in introducing the approach to its unionized factories in Brazil.[24]

By 2009, GM was in serious financial trouble andfiled for Chapter 11 bankruptcy reorganization.In April the company confirmed its commitment to NUMMI[25]and in June announced that it was scrapping the Pontiac brand which would end production of the Corolla-derivedPontiac Vibeat NUMMI by August 2009.[26][27][28]That triggered several months of discussions between the automakers, trying to find products that could be produced at the factory for both companies, with Toyota even offering to build a version of itsPriushybrid for GM at the factory.[29][30]

Fremont MayorBob Wasserman,city officials and California GovernorArnold Schwarzeneggerlobbied the automakers to find a product and keep NUMMI open.[31][32][33][34]State officials crafted salestax exemptionon new factory equipment to preserve NUMMI.[35]A regional committee was formed in February 2010 to investigate the closure of the plant,[36]and the facility wasappraisedwhile operating.[37]

The talks ultimately failed and in June 2009 the GM announced that it would pull out of NUMMI.[38][39][40]On August 27, 2009, Toyota announced that it would also discontinue production at NUMMI by March 2010, marking the first time the company had ever closed a factory.[41]

In November 2009 call with autoworkers Toyota's head of U.S. sales said that though it was a difficult decision to shut down the plant, "the economics of having a plant in California so far away from thesupplier lines"in the Midwest" just doesn't make business sense "for Toyota.[42]Autoworkers prepared for the shut down by refreshing skills and planning for career transitions.[43][44]In March 2010, 90% of the workers at the plant approved a $281 millionseverance packagefrom Toyota that had been negotiated by the UAW, averaging $54,000 to the plant's 4,700 employees.[45][46]

Production of the Corolla in North America was shifted toToyota Motor Manufacturing Canadauntil the newToyota Motor Manufacturing Mississippiassembly plant could open in October 2011. Production of the Tacoma had already partially shifted toToyota Motor Manufacturing de Baja Californiain 2004, and the remaining work shifted toToyota Motor Manufacturing Texas.[20]

At 9:40am on April 1, 2010, the plant produced its last car, a red Toyota Corolla.[47]NUMMI sold off equipment at an auction,[37]with robots and tooling going to Toyota's plants in Kentucky, Texas[48]and Mississippi.[49]NUMMI sold some equipment to Tesla for $15 million.[50]

Reuse of the factory

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Further information:Tesla Fremont Factory

Ahead of the closure of NUMMI, several possible uses for the facility were proposed.

In January 2010, the land was considered for a new stadium for theOakland AthleticsofMajor League Baseball.It is close to the proposed site ofCisco Field,which was never formally approved.[51]On March 10, 2010,Aurica Motorsannounced 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 electric vehicles.[52][53]Both proposals went nowhere.

On May 20, 2010,Tesla Motorsannounced that it would purchase most (210 of 370 acres)[49]of the former NUMMI site from Toyota for $42 million, significantly under market value.[54][55]As part of the agreement, Toyota would also purchase $50 million of common stock when Tesla held its IPO the next month. In exchange, Tesla agreed to partner with Toyota on the "development of electric vehicles, parts, and production system and engineering support." The two companies would later end their partnership in 2017.[56]

The plant, renamed theTesla Fremont Factory,produces theModel S,Model X,Model 3,andModel Yvehicles.[57][58][59]As of 2023,the plant employs 22,000 people, far greater than the 5,500 employees of NUMMI, and produced nearly 560,000 vehicles, 30 percent more than the maximum output of NUMMI.[18][60]

Models produced

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During its time in operation, the NUMMI joint venture factory produced the following models (model years):[3]

See also

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References

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  2. ^"Union auto workers pledge fight to get jobs at GM-Toyota plant".Eugene Register-Guard.(Oregon). Associated Press. February 28, 1983. p. 6B.
  3. ^abcde"NUMMI Milestones".NUMMI. Archived fromthe originalon April 2, 2010.RetrievedNovember 30,2013.
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  5. ^abcdefgLangfitt, Frank (March 26, 2010)."The End Of The Line For GM-Toyota Joint Venture".All Things Considered.National Public Radio.Archivedfrom the original on April 23, 2016.RetrievedApril 7,2010.
  6. ^abcdefghijklmLangfitt, Frank (July 17, 2015)."NUMMI (2015), Transcript".This American Life.Archivedfrom the original on June 19, 2016.RetrievedNovember 9,2016.
  7. ^Urbance, Randy."ESD.83 Book Review of The Machine that Changed the World"(PDF).Massachusetts Institute of Technology.
  8. ^Roos, Daniel; Womack, James P.; Jones, Daniel T (November 1991).The Machine That Changed the World: The Story of Lean Production.Harper Perennial.ISBN978-0060974176.
  9. ^Brian Bremner, B. and C. Dawson (November 17, 2003)."Can Anything Stop Toyota?: An inside look at how it's reinventing the auto industry".Business Week.
  10. ^"Global Website - 75 Years of Toyota - Section 3. Local Production Starts in North America - Item 2. Joint Venture with GM".Toyota. 2012.Archivedfrom the original on March 30, 2016.RetrievedOctober 10,2016.
  11. ^abcdefghiAdler, Paul S. (April 1992).The 'Learning Bureaucracy': New United Motor Manufacturing, Inc(PDF)(Report). School of Business Administration,University of Southern California.RetrievedJune 30,2021.
  12. ^Adler, Paul S. (January 1995)."Democratic Taylorism: The Toyota Production System at NUMMI".ResearchGate.RetrievedOctober 10,2016.
  13. ^Adler, Paul S. (January 1993)."Time-and-Motion Regained".Harvard Business Review.US.RetrievedJuly 9,2017.
  14. ^Ikenson, Daniel (June 18, 2003)."Ending the 'Chicken War': The Case for Abolishing the 25 Percent Truck Tariff".The Cato Institute.Archived fromthe originalon September 21, 2011.RetrievedNovember 29,2011.
  15. ^"Toyota's TABC Plant Celebrates 40 Years of Manufacturing in California".Toyota Motor North America(Press release). August 21, 2012.RetrievedJune 2,2021.
  16. ^Simmers, Tim (March 5, 2006)."NUMMI plant a model for ailing car industry".Contra Costa Times.RetrievedNovember 5,2017.5,500 employees. The plant makes 960 cars a day and 650 trucks. A finished car comes off the assembly line every 55 seconds, and a truck rolls off every 81 seconds. It takes 6½ hours to make a car at NUMMI. It costs 30 percent to 40 percent more to make cars here
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  20. ^abArrieta, Rose (August 28, 2009)."Toyota to Close Only Union Factory In U.S."inthesetimes.RetrievedJanuary 7,2018.
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  25. ^Popa, Bogdan (April 28, 2009)."GM Plans New Toyota Joint Product to Replace Pontiac Vibe".autoevolution.Archivedfrom the original on October 2, 2009.We're clearly not backing away from our partnership at NUMMI. There's no issue of us backing away from NUMMI.
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  27. ^"GM to end Pontiac Vibe output at joint plant at Toyota. - Free Online Library".thefreelibrary.June 18, 2009.Archivedfrom the original on January 7, 2022.About 460,000 Vibes were produced between 2002 and the end of May this year at New United Motor Manufacturing Inc.
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37°29′41″N121°56′41″W/ 37.49472°N 121.94472°W/37.49472; -121.94472

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