How Fremont's NUMMI Plant Shaped Industry

The Fremont, California, factory that later became NUMMI started as General Motors' Fremont Assembly plant in 1962 and reopened in 1984 as a joint venture between GM and Toyota. A Patch item published May 17 pointed readers to that history and to the plant's role in changing how U.S. automakers thought about quality, labor relations and factory management. Toyota's corporate history and academic case studies show the site became an early U.S. test of the Toyota Production System, using many of the same union workers who had worked at GM's troubled Fremont operation. Today the same site is run by Tesla as its Fremont Factory. ### Why was Fremont such an unlikely place for an industrial experiment? General Motors closed the original Fremont plant in 1982 after years of poor labor relations, low productivity and quality problems, according to academic and historical accounts. An NBER working paper said unexcused absenteeism often exceeded 20%, while a Harvard Business School summary said cars at the end of the line sometimes had to be towed away for repairs. (toyota-global.com) Toyota and GM still chose the site for a joint venture after talks began in 1981 and 1982. Toyota's history says GM wanted compact-car production expertise and higher small-car volume, while Toyota wanted a lower-investment way to expand North American production during a period of U.S.-Japan trade friction and import restraints. (nber.org) ### What exactly did Toyota and GM build there? In April 1984, Toyota and GM formally established New United Motor Manufacturing Inc., or NUMMI, as a 50-50 venture in Fremont. Toyota says the plant's basic policy was to achieve high productivity through the Toyota Production System while supplying high-quality, low-cost passenger cars. (toyota-global.com) The 1983 labor agreement with the United Auto Workers was central to that plan. Toyota's account says the agreement treated labor and management as "partners for achieving shared goals" and allowed team-based work, flexible job assignments, multi-process handling and a system under which workers could stop the line when they found a defect. (toyota-global.com) ### Did NUMMI really use the same workforce? NUMMI rehired most of the old Fremont workforce when production began in December 1984. A University of Southern California study said 99% of production workers and 75% of skilled trades workers at startup were former GM-Fremont employees who had belonged to the UAW. A separate USC paper said 85% of NUMMI hires came from the prior GM plant. (toyota-global.com) Harvard Business School's summary says Toyota hired mostly former GM workers, including plant militants and activists, then trained them in the Toyota Production System and in the workplace culture needed to make it work. That point has made NUMMI a durable management case study: the workforce was not replaced wholesale, but the operating system around it was. ### What changed inside the factory? (faculty.marshall.usc.edu) Toyota sent NUMMI trainees to its Takaoka plant in Japan in 1984 and early 1985. Toyota says 257 group leaders and team leaders received education and on-the-job training there, part of a "mother plant system" used to transfer production methods and quality-control practices to Fremont. (hbs.edu) Within a few years, outside observers were citing the turnaround. The Smithsonian's archives describe NUMMI as one of the first major attempts to export Toyota's lean production system outside Asia and say that within five years the plant operated as efficiently as Japanese manufacturing facilities. Harvard Business Review later summarized the shift more bluntly, writing that quality and productivity at Fremont went from worst to best. (toyota-global.com) ### How far did NUMMI's influence travel beyond Fremont? NUMMI became a reference point in debates over whether Japanese-style lean manufacturing could work in the United States. Toyota's history presents the venture as a model for industrial cooperation between Japan and the United States and as a way to support U.S. employment and the parts industry. Academic studies later treated the plant as evidence that work rules, training and labor-management systems could materially change factory performance. (siarchives.si.edu) The plant itself closed in April 2010 after GM's 2009 bankruptcy ended the partnership. In May 2010, Tesla agreed to buy most of the site for $42 million, and the former NUMMI complex became Tesla's Fremont Factory. Tesla's current factory page says Fremont remains a hub for Model S, Model 3, Model X and Model Y production and lists open roles at the site. (en.wikipedia.org) (toyota-global.com)