How Fremont's NUMMI Plant Reshaped Industry

Toyota and General Motors opened New United Motor Manufacturing Inc., or NUMMI, in Fremont in 1984 after General Motors had shuttered the same factory two years earlier. The venture put Toyota’s production system inside a unionized U.S. plant and became one of the auto industry’s most studied experiments. Harvard Business School said the Fremont site had been GM’s worst plant on quality before Toyota rehired many of the same workers and rebuilt the operation around a different management system. Fremont’s city government now places the plant in a longer industrial story that runs from NUMMI to Tesla and a broader manufacturing base in Warm Springs. ### Why did GM and Toyota pick Fremont in the first place? General Motors closed its Fremont Assembly plant in 1982, and Toyota entered the site through a 50-50 joint venture formed in 1984. Toyota’s corporate history says the companies created NUMMI to build vehicles in the United States, while Harvard Business School says GM used the partnership to study the Toyota Production System up close. Harvard Business School said Toyota also used Fremont to learn how to operate in the United States. (hbs.edu) GM contributed the shuttered plant, and Toyota agreed to manage it, according to the case study. ### What made the old Fremont plant such a proving ground? Harvard Business School said the Fremont factory had a “tumultuous history” before NUMMI, with wildcat strikes, conflict between management and the United Auto Workers, high costs and cars that sometimes had to be towed off the line for repairs. (pressroom.toyota.com) Toyota then rehired mostly former GM workers, including plant activists, and trained them in its system, the case study says. Harvard Business Review wrote in 1993 that quality and productivity at the Fremont plant went “from worst to best.” Harvard Business School’s more recent case says Toyota transformed the site into the most productive auto assembly plant in the United States, with quality comparable to its Japanese factories. (hbs.edu) ### What exactly did NUMMI change in American manufacturing? Toyota’s role at NUMMI gave U.S. manufacturers a working example of the Toyota Production System inside an American union plant. (hbs.edu) Harvard Business School says GM’s goal was to learn how to transfer that knowledge to the rest of its operations, making NUMMI less a local factory story than a test site for management methods, labor relations and quality control. The Fremont experiment became part of Toyota’s own U.S. manufacturing buildout. (hbr.org) Toyota’s history page lists NUMMI among the company’s early American production milestones, and a later Toyota corporate history item says the 1980s were a critical period when NUMMI and the Kentucky plant established manufacturing as a North American strength. ### How did the joint venture end? GM announced in May 2009 that it would end production of the Pontiac Vibe at NUMMI, and that work stopped on August 17, 2009, Toyota said in a March 3, 2010 statement. (hbs.edu) Toyota said GM’s bankruptcy reorganization in June 2009 left its 50% stake in NUMMI among the assets of Motors Liquidation Company, forcing Toyota to review the plant’s economics. Toyota said its production contract with NUMMI would end on April 1, 2010, and committed $250 million in transition support for salaried and hourly workers who stayed through the end of production. (pressroom.toyota.com) In a separate March 18, 2010 statement, Toyota said it had committed about $280 million tied to an agreement with the UAW. ### What happened to the site after NUMMI shut down? Fremont says Tesla Motors bought the former NUMMI automobile plant in 2010 and made it the company’s flagship factory. (pressroom.toyota.com) Tesla said in an October 27, 2010 release that the former NUMMI plant had closed in April 2010 and that Tesla had purchased the factory in May. Tesla’s later factory page says more than 10,000 employees work at the Fremont factory. The city now says Fremont has more than 900 manufacturing and hardware companies, and that advanced manufacturing accounts for one in four jobs. (pressroom.toyota.com) ### Why does NUMMI still come up in Fremont? Fremont’s official history places the 2010 Tesla purchase in a timeline that also includes the city’s late-20th-century high-tech boom. Its economic-development office says Warm Springs remains one of several active development areas as the city markets itself as the Bay Area’s largest concentration of advanced manufacturers. (fremont.gov) City materials now point readers to current plans and reports through Fremont’s planning and economic-development pages. (tesla.com) Those documents, along with Tesla’s continuing presence at the former NUMMI site, are the clearest public markers of what followed the plant’s 1984 opening and its 2010 closure. (fremont.gov) (fremont.gov)