NUMMI

NUMMI
Industry Automotive industry
Fate Dissolved; Portion of physical plant sold to Tesla Motors
Predecessor Fremont Assembly 1960-1982
Successor Tesla Factory (physical plant)
Founded 1984 (1984)
Defunct 2010
Headquarters Fremont, California, United States
Products Subcompact cars and trucks
Services Automotive manufacturing
Owner General Motors and Toyota (1984–2010)
Website Archived home page

New United Motor Manufacturing, Inc. (NUMMI) was an automobile manufacturing company in Fremont, California, jointly owned by General Motors and Toyota that opened in 1984 and closed in 2010. On October 27, 2010, its former plant reopened as a 100% Tesla Motors-owned production facility, known as the Tesla Factory.[1] The plant is located in the East Industrial area of Fremont between Interstate 880 and Interstate 680.

Overview

The NUMMI plant in Fremont, California

NUMMI was established at the former General Motors Fremont Assembly site that closed in 1982;[2] it had been a GM plant since 1962. GM and Toyota reopened the factory as a joint venture in 1984 to manufacture vehicles to be sold under both brands.[3]

GM saw the joint venture as an opportunity to learn about lean manufacturing from the Japanese company, while Toyota gained its first manufacturing base in North America and a chance to implement its Taylorism-inspired production system in an American labor environment,[4][5][6][7] avoiding possible import restrictions.[8] GM employees went to Toyota's Takaoka plant in Japan[9] and improved production at NUMMI,[10][11] Spring Hill and other sites,[12] particularly after Jack Smith spread the program.[13][14]

Up to May 2010, NUMMI built an average of 6000 vehicles a week, or nearly eight million cars and trucks since opening in 1984.[15][16] In 1997, NUMMI produced 357,809 cars and trucks,[17] peaking at 428,633 units in 2006.[14]

GM pulled out of the venture in June 2009 due to its bankruptcy, and several months later Toyota announced plans to pull out by March 2010.[18][19] The closure was opposed by city officials,[20][21][22] including Fremont Mayor Bob Wasserman, who lobbied to keep NUMMI in the city.[23] However, at 9:40am on April 1, 2010, the plant produced its last car, a red Toyota Corolla S believed to be destined for a museum in Japan. Production of Corollas in North America moved to Toyota Motor Manufacturing Mississippi's assembly plant in Blue Springs, Mississippi and Toyota Motor Manufacturing Canada's 'North' assembly plant in Cambridge, Ontario.

On May 20, 2010, it was announced that Tesla Motors had purchased[24][25] part of the NUMMI plant and renamed it Tesla Factory, producing the Tesla Model S.[26] By 2016, the plant had 6,000 employees, with plans for more.[27]

Facility

The plant spans the equivalent of about 88 football fields, and is configured into a main building that does the final assembly of vehicles and five other facilities:

  • Plastics facility fabricating bumpers, instrument panels, interior panels, and others;
  • Stamping facility that fabricates all visible sheet metal parts;
  • Welding facility that assembles all metallic parts into one rigid unit; and
  • Two paint facilities, one for passenger vehicles and another for truck cabs.

Employees

In the initial 20 months of hiring, NUMMI hired 2,200 hourly workers—85% from the old GM-Fremont plant, among them the old union hierarchy. The union also played a role in selecting managers, except for 16 directly assigned by GM and about 30 Toyota managers and production coordinators from Japan, including the CEO, Tatsuo Toyoda, part of the company’s founding family.[28] By 2006, the plant had 5,500 employees.[29]

Until the facility's closure in April 2010, 4,700 workers were employed.[30] NUMMI employees were represented by The International, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) Local 2244.[29]

Models produced

The first model NUMMI produced was the Chevrolet Nova (1984–1988). This was followed by the Geo Prizm (1989–1997), the Chevrolet Prizm (1998–2002) and the Hilux (1991–1995, predecessor of the Tacoma), as well as the Toyota Voltz, the Japanese right-hand drive version of the Pontiac Vibe. Both of the latter are based on the Toyota Matrix.

Production of the Pontiac Vibe hatchback was discontinued in August 2009 as GM phased out the Pontiac brand in the midst of a bailout.[31] Along with Saturn and Hummer, Pontiac joined Oldsmobile (which had been discontinued after 2004) among the four GM brands that are no longer in production.

Beginning in September 1986, the NUMMI plant produced the Corolla.[3] In January 1995, it began producing the Toyota Tacoma pickup truck.[3]

History

Background

The Fremont Assembly factory which NUMMI took over was built by General Motors and operated by them from 1962 to 1982,[3] when the Fremont employees[32] were "considered the worst workforce in the automobile industry in the United States", according to the United Auto Workers.[15][16][5] Employees drank alcohol on the job, were frequently absent (enough so that the production line couldn't 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."[15][16] GM was departmentalized as per Henry Ford's Division of labour,[33][34] but without the necessary communication; management did not consider workers' view of production, and quantity was preferred over quality.[5]

Makeover

The idea of reopening the plant emerged from the need that GM had to build high-quality and profitable small cars and the need Toyota had to start building cars in the United States, a requirement due to the possibility of import restrictions by the U.S. Congress.[15][16] The goal was to produce high quality at low cost, but supported by including workers in the process.[35] The choice of the Fremont plant and its workers was unusual because of the previous problems. In spite of the history and reputation, when NUMMI reopened the factory for production in 1984, 85% of the troublesome GM workforce was rehired,[36] with some sent to Japan to learn the Toyota Production System.[15][16][5] Workers who made the transition identified the emphasis on quality and teamwork by Toyota management as what motivated a change in work ethic.[15][16] Among the cultural changes were the same uniform, parking and cafeterias for all levels of employment in order to promote the team concept,[37][38] and a no-layoff policy.[39] Built-in process quality and employee suggestion programs for continual improvement[38] were other changes.[40] Consensus decision-making reached management level, in contrast with the old departmentalization.[41]

By December 1984, the first car, a yellow Chevrolet Nova rolled off the assembly line. And almost right away, the NUMMI factory was producing cars at the same speed and with as few defects per 100 vehicles as those produced in Japan,[42][15][16] with higher worker satisfaction.[43]

In 1988 NUMMI operated at 58.6% capacity, and had not reached break-even by 1991.[37]

Despite the early success at Fremont, by 1998 (15 years later) GM had still not been able to implement lean manufacturing in the rest of the United States,[5][44] though GM managers trained at NUMMI were successful in introducing the approach to its unionized factories in Brazil.[45]

NUMMI was Toyota's only unionized plant in the U.S.[46]

Events as closure approached

Some of the challenges for the factory were higher costs.[29] Daily tours of the plant, offered free to the public, were ended on February 27, 2009.[47][48]

On June 29, 2009, General Motors announced that they would discontinue the joint venture with Toyota.[49] The announcement was made following GM CEO Fritz Henderson announcing in April that General Motors would discontinue the Pontiac Vibe production at NUMMI. The two automakers were in discussions but could not find a suitable product to be produced at the factory. “After extensive analysis, GM and Toyota could not reach an agreement on a future product plan that made sense for all parties,” GM North America President Troy Clarke said in a statement. "Toyota’s hope was to continue the venture and we haven’t yet decided any plans at the factory,” said Hideaki Homma, Toyota’s Tokyo-based spokesman. “While we respect this decision by GM, the economic and business environment surrounding Toyota is also extremely severe, and so this decision by GM makes the situation even more difficult for Toyota.” Before GM decided to sever its stake in the NUMMI joint venture, Toyota was considering offering a version of its Prius hybrid to GM that would be built at the factory and sold as a GM model but Toyota has indicated that it was seriously considering exiting the venture also.[50][51]

On August 27, 2009, Toyota announced that it would discontinue its production contract with NUMMI, shifting Tacoma production to its San Antonio, Texas pickup plant and Corolla assembly to Blue Springs, Mississippi. A total of 5,400 employees were affected, including 4,550 UAW hourly workers.[52]

In November 2009, Toyota's head of U.S. sales took calls from autoworkers, saying that though it has been a difficult decision to shut down the plant, "the economics of having a plant in California so far away from the supplier lines" in the Midwest "just doesn't make business sense" for Toyota to continue running the NUMMI plant.[53] Meanwhile, autoworkers prepared for the shut down by refreshing skills and planning for career transitions.[54] Federal, state, and local officials also participated in the transition discussions.[55] In March 2010, 90% of the 3,700 UAW workers at the plant approved a $281 million severance package averaging $54,000,[56] paid by Toyota to the plant's 4,700 employees.[57]

Production of the Toyota models that used to be made at NUMMI was moved to Toyota's plants in southern states.[46]

Alternatives to closure

In January 2010, a possible use of the land was proposed: a new stadium for home games of the Oakland Athletics of Major League Baseball. It is close to the proposed site of Cisco Field, which was never formally approved.[58]

State officials crafted sales tax exemption on new factory equipment to preserve Nummi.[59] A regional committee was formed in February 2010 to investigate the closure of the plant,[60] and the facility was appraised while operating.[61]

On March 10, 2010, Aurica Motors announced a proposal to save the NUMMI automotive plant and the jobs associated with it. The company said 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 electrical vehicles.[62][63]

End

The NUMMI plant ceased operations on April 1, 2010, ending the Toyota-GM joint venture. California's last automobile manufacturing plant saw its last car, a Corolla, roll off the assembly line.[64] NUMMI sold off equipment at an auction,[61] with robots and tooling going to Toyota plants in Kentucky, Texas[65] and Mississippi.[66] NUMMI sold some equipment to Tesla for $15 million.[67]

After NUMMI: use of the land and facility

On May 20, 2010, Tesla Motors and Toyota announced a partnership to work on electric vehicle development, which included Tesla's partial purchase (210 of 370 acres)[66] of the former NUMMI site for $42 million, mainly consisting of the factory building,[24][30] but not equipment.[68] Tesla CEO Elon Musk said the Tesla S sedan will be built at the plant.[69] When Tesla took over the location in 2010, they renamed it the Tesla Factory.[70] Tesla would be collaborating with Toyota on the "development of electric vehicles, parts, and production system and engineering support". According to Tesla Motors' plans, the plant would first be used to produce the Tesla Model S sedan with "future vehicles" following in the coming years. The plant was projected to produce 20,000 vehicles a year and employ 1,000 workers to start.[26]

See also

References

  1. ↑ Sibley, Lisa (October 27, 2010). "Tesla officially replaces NUMMI in Fremont".
  2. ↑ "GM, Toyota mull joint U.S. venture". Eugene Register-Guard. (Oregon). wire services. March 9, 1982. p. 5A.
  3. 1 2 3 4 "timeline". NUMMI. Archived from the original on April 2, 2010. Retrieved November 30, 2013.
  4. ↑ Adler, Paul S. (January 1995). "Democratic Taylorism: The Toyota Production System at NUMMI". ResearchGate. Retrieved October 10, 2016.
  5. 1 2 3 4 5 Glass, Ira (July 17, 2015). "NUMMI 2015, Transcript". Archived from the original on June 19, 2016. Retrieved November 9, 2016. nobody in the GM plant would ever ask to help. They would come and yell at you because you got behind. I can't remember any time in my working life where anybody asked for my ideas to solve the problem. There's nobody to pull you out at General Motors, so you're going to let something go. Hundreds of misassembled cars. Never stop the line. . One reason car execs were in denial was Detroit's insular culture. Yes, unions and management were always at each other's throats, and yes, GM and its suppliers had a destructive relationship that seemed to almost discourage quality. But everyone had settled into comfortable roles in this dysfunctional system and learned to live with it. -it took about a decade and a half after NUMMI for change to even begin to take hold at GM. By the year 2000, GM finally started to see a generational transformation.
  6. ↑ Adler 1992, page 4
  7. ↑ Adler 1992, page 10
  8. ↑ "Global Website - 75 Years of Toyota - Section 3. Local Production Starts in North America - Item 2. Joint Venture with GM". Toyota. 2012. Archived from the original on March 30, 2016. Retrieved October 10, 2016.
  9. ↑ Adler 1992, page 9: Timeline 1983-1991
  10. ↑ "How NUMMI Changed Its Culture". September 30, 2009. Archived from the original on May 14, 2016. Retrieved October 10, 2016.
  11. ↑ "How to Change a Culture: Lessons From NUMMI". MIT Sloan Management Review. 2010. Archived from the original on March 2, 2016. Retrieved October 10, 2016.
  12. ↑ "Goodbye to NUMMI - How a Manufacturing Plant Changed the Culture of the Car-Making". Popular Mechanics. April 2, 2010. Archived from the original on September 19, 2016. Retrieved October 10, 2016.
  13. ↑ "NUMMI joint venture in California was a classroom for change". Automotive News. September 14, 2008. Archived from the original on October 10, 2016. Retrieved October 10, 2016.
  14. 1 2 Schweinsberg, Christine (August 28, 2009). "Toyota's Decision to Abandon NUMMI Closes Book on 25-Year Experiment". Ward's. Archived from the original on April 5, 2016. Retrieved October 10, 2016.
  15. 1 2 3 4 5 6 7 Siegel, Robert (March 26, 2010). "The End Of The Line For GM-Toyota Joint Venture". All Things Considered. National Public Radio. Archived from the original on April 23, 2016. Retrieved April 7, 2010.
  16. 1 2 3 4 5 6 7 "Episode 403 - NUMMI". This American Life. March 26, 2010. Retrieved April 7, 2010.
  17. ↑ "GM Nummi Plant". Archived from the original on March 14, 2016. Retrieved October 9, 2016.
  18. ↑ Thomas, Ken (August 28, 2009). "Toyota plans to end production at Calif. plant". Google News. Retrieved August 29, 2009.
  19. ↑ Abate, Tom (August 28, 2009). "Toyota closing Fremont Nummi plant". SFGate. Retrieved August 29, 2009.
  20. ↑ Abate, Tom (August 6, 2009). "State offers incentives to save Nummi plant". SFGate. Retrieved November 3, 2015.
  21. ↑ Bensinger, Ken (July 16, 2009). "State lawmakers scramble to keep Toyota plant open". Los Angeles Times. Retrieved November 3, 2015.
  22. ↑ Schwarzenegger, Arnold; Haggerty, Scott; Wasserman, Bob (August 25, 2009). "Restoring California's Automotive Industry". freemont.gov. Retrieved November 3, 2015.
  23. ↑ "Memorial Held For Fremont Mayor Wasserman". KCBS-TV. January 6, 2012. Retrieved January 21, 2012.
  24. 1 2 Riddell, Lindsay (May 20, 2010). "Tesla to buy NUMMI plant, build cars with Toyota". San Francisco Business Times. Retrieved May 21, 2010.
  25. ↑ Davis, Joshua (September 27, 2010). "How Elon Musk Turned Tesla Into the Car Company of the Future". WIRED. Retrieved October 10, 2016.
  26. 1 2 "Tesla lands sudden deal with Toyota, will build Model S sedan in Fremont NUMMI plant". Engadget. Retrieved December 21, 2010.
  27. ↑ "Tesla's new long-range plan could double size of Fremont factory". San Francisco Chronicle. October 7, 2016. Retrieved October 8, 2016.
  28. ↑ Adler, Paul (January 1993). "Time-and-Motion Regained". Harvard Business Review. US. Retrieved July 9, 2017.
  29. 1 2 3 Simmers, Tim (March 5, 2006). "NUMMI plant a model for ailing car industry". Contra Costa Times. Retrieved November 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
  30. 1 2 Tesla Wants NUMMI Operational By 2012 Archived May 23, 2010, at the Wayback Machine. KVTU.com, May 21, 2010. Retrieved: May 22, 2010
  31. ↑ "General Motors Statement Regarding Discontinuation of Pontiac Vibe Production at NUMMI Facility". Retrieved June 20, 2009.
  32. ↑ "GM Nummi Plant". Archived from the original on March 4, 2016. Retrieved November 9, 2016.
  33. ↑ Roos, Daniel; Womack, James P.; Jones, Daniel T (November 1991). The Machine That Changed the World : The Story of Lean Production. Harper Perennial. ISBN 978-0060974176.
  34. ↑ Urbance, Randy. "ESD.83 Book Review of The Machine that Changed the World" (PDF). Massachusetts Institute of Technology.
  35. ↑ Adler 1992, page 15
  36. ↑ Adler 1992, page 11-12
  37. 1 2 Adler 1992, page 14
  38. 1 2 Adler 1992, page 33
  39. ↑ Adler 1992, page 16. Quote: "no lay-offs .. are absolutely crucial to our success. Team members know that when they contribute ideas for more effective operations they are not jeopardizing anyone's job. And that's fundamental, since they know more than any manager or industrial engineer about how to improve our efficiency and competitiveness."
  40. ↑ Adler 1992, page 18
  41. ↑ Adler 1992, page 20
  42. ↑ Adler 1992, page 23
  43. ↑ Adler 1992, page 24
  44. ↑ Gomes-Casseres, Ben (September 1, 2009). "Nummi: What Toyota Learned and GM Didn't". Harvard Business Review. Archived from the original on August 11, 2016. Retrieved June 5, 2017.
  45. ↑ Bradsher, Keith (June 17, 1998). "G.M.'s Plant in Brazil Raises Fears Closer to Home". The New York Times. Retrieved April 7, 2010.
  46. 1 2 Arrieta, Rose (August 28, 2009). "Toyota to Close Only Union Factory In U.S." inthesetimes.com. Retrieved January 7, 2018.
  47. ↑ "Nummi Tours Appointments". Archived from the original on April 21, 2012. Retrieved June 20, 2009.
  48. ↑ "Nummi Tours". Archived from the original on March 9, 2009. Retrieved June 20, 2009.
  49. ↑ "GM ends 25-yr-old joint venture with Toyota to build cars, trucks at Calif. plant". Los Angeles Times. Archived from the original on July 2, 2009. Retrieved June 30, 2009.
  50. ↑ Kim, Soyoung (July 10, 2009). "UPDATE 1-Toyota may drop U.S. joint venture with GM". Reuters. Retrieved July 13, 2009.
  51. ↑ Fujimura, Naoko; Komatsu, Tetsuya (July 11, 2009). "Toyota May Dissolve California Plant Venture Abandoned by GM". Bloomberg.com. Retrieved July 13, 2009.
  52. ↑ Ohnsman, Alan; Inoue, Kae (August 28, 2009). "Toyota Will Shut California Plant in First Closure". Bloomberg.com. Retrieved August 29, 2009.
  53. ↑ Matthews, Mark (November 17, 2009). "Toyota sales head talks about NUMMI closure". abclocal.go.com/kgo. Retrieved November 22, 2009.
  54. ↑ Avalos, George (November 16, 2009). "NUMMI auto factory closing: End of the line". contracostatimes.com. Archived from the original on March 3, 2016. Retrieved November 22, 2009.
  55. ↑ Abate, Tom (November 14, 2009). "A huddle to help Nummi workers find new jobs". sfgate.com. Retrieved November 22, 2009.
  56. ↑ Avalos, George (March 18, 2010). "NUMMI workers overwhelmingly approve shutdown agreement". East Bay Times. Retrieved April 7, 2017.
  57. ↑ Tobak, Steve (April 2, 2010). "Blame GM, Not Toyota, for NUMMI Plant Closure". CBS. US. Archived from the original on October 10, 2016. Retrieved October 10, 2016.
  58. ↑ Jones, Carolyn (January 9, 2010). "Fremont's new pitch: A's stadium at Nummi site". sfgate.com. Retrieved January 15, 2010.
  59. ↑ Tom Abate and David R. Baker (May 21, 2010). "Tesla joins with Toyota to reopen Nummi plant". SFgate. Archived from the original on August 26, 2016. Retrieved June 5, 2017. State and local officials, who had crafted tax incentives, including worker training provisions and an exemption from sales taxes for new factory equipment to preserve Nummi
  60. ↑ "Toyota's Proposed Plant Shutdown to Be Scrutinized by Panel of California Leaders". February 24, 2010. Retrieved March 2, 2010.
  61. 1 2 "New United Motor Manufacturing Appraisals". Maynards. Archived from the original on June 13, 2016. Retrieved June 5, 2017.
  62. ↑ "Aurica Motors Announces Plan to Keep NUMMI Plant Open by Manufacturing Electric Cars" (Word document). Aurica Motors. March 10, 2010. Retrieved April 2, 2010.
  63. ↑ "Auto firm setting sights on NUMMI". The Oakland Tribune. March 10, 2010. Retrieved April 2, 2010.
  64. ↑ "NUMMI Plant Closure Ends Toyota-GM Venture". March 31, 2010. Retrieved March 31, 2010.
  65. ↑ Ohnsman, Alan (September 18, 2011). "Toyota gave old robots new tools to trim U.S. Camry price 2%". Automotive News/Bloomberg. Retrieved June 5, 2017. Along with the production robots transferred to Toyota's Georgetown, Ky., plant that makes most of the Camrys sold in North America, Nummi equipment was also acquired by Toyota's San Antonio plant and electric-car maker Tesla Motors Inc.
  66. 1 2 Hull, Dana (September 16, 2010). "2010: Tesla gets ready to take over the former NUMMI auto plant in Fremont". The Mercury News / Bloomberg. Archived from the original on May 2, 2017. Retrieved June 5, 2017. The entire NUMMI facility covers about 370 acres. Tesla is buying 210 acres, a parcel that contains several buildings that have approximately 5.5 million square feet of floor space. NUMMI’s existing press line will be taken apart and sent to Toyota’s plant in Blue Springs, Miss.
  67. ↑ "Tesla Buys Nummi Assets". August 20, 2010. Archived from the original on October 14, 2015. Retrieved June 5, 2017.
  68. ↑ Ricketts, Camille (May 27, 2010). "Tesla paid $42M for NUMMI but doesn't have deal to build cars with Toyota". Archived from the original on December 14, 2016. Retrieved June 5, 2017.
  69. ↑ Tierney, Christine. Toyota invests in Tesla to help reopen Calif. plant The Detroit News, May 20, 2010. Retrieved: May 22, 2010
  70. ↑ "Tesla Motors Opens Tesla Factory - Home of the Model S" (Press release). Tesla Motors. October 27, 2010. Retrieved July 18, 2012.
  71. ↑ "Why Toyota Is Afraid Of Being Number One". Bloomberg Businessweek. March 5, 2007. Retrieved July 9, 2011.

Bibliography

Coordinates: 37°29′41″N 121°56′41″W / 37.49472°N 121.94472°W / 37.49472; -121.94472

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