The New United Motor Manufacturing factory in Fremont, California was originally a General Motors plant opened in 1962. For the past 25 years it has been a successful joint venture between GM and Toyota. Bloomberg reports their uncertain faith now: Toyota Stuck With California Dilemma as GM Ditches Joint Plant. In fatter times Toyota may have done the right thing and picked up GM’s half of NUMMI, but Toyota is signaling an uncertain future for their first and most successful joint venture.
When Toyota was making its first forays into manufacturing in North America, it approached GM to co-manage what would become NUMMI. The Fremont site reopened for production in 1984 and has run as a paragon of lean manufacturing and collaborative management in what was formerly dysfunctional factory. NUMMI won many awards for productivity and quality, ranking among the top Toyota plants in North America. Economic circumstances and the bankruptcy of the GM half of the joint venture notwithstanding, NUMMI was a great success and all of the people involved should be proud.
Much can be said from GM’s failure to learn more from Toyota through this joint venture, but this is not the time or place to refresh that discussion. Instead, let’s salute NUMMI at their best. A good place to start is an article about Lean at NUMMI from Manufacturing Engineering magazine in 2005. Mark Rosenthal who blogs as The Lean Thinker featured an article by Gipsie Ranney back in January titled Remembering NUMMI, a poignantly prescient title, perhaps.
For an in-depth study on how Toyota approached the joint venture at NUMMI, the paper titled Evaluating A Joint Venture: NUMMI at Age 20 by Edwin and Mitsuko Duerr at San Francisco State University is highly recommended. They credit the success of the venture to the emphasis Toyota placed on the following five factors:
- developing cooperative management-labor relations;
- careful selection and extensive training of workers;
- stressing teamwork and responsibility of the individual to the work group;
- putting safety and quality first, assigning the responsibility for safety and quality to each worker, and giving them the authority to assure it; and
- implementing Toyota’s ‘lean production system’ upon the foundation of the first four key factors.
In other words, Toyota simply applied the basics of management. This is a moment that will test Toyota’s new President Akio Toyoda. He has stated a return to Toyota’s roots and core values, a “back to basics” if you will. Placing people at the center of their business plan has always been a basic precept at Toyota. Over the next weeks and months, we will see whether a profit pinch will cause them to make less fortunate decisions or whether Toyota is able to put their money where their mouth is in order to invest in NUMMI, the surrounding community and the long-term future.