How Fremont's NUMMI Plant Reshaped U.S. Auto Industry

General Motors and Toyota reopened the shuttered Fremont, California, assembly plant in 1984 as New United Motor Manufacturing Inc., or NUMMI, a 50-50 joint venture built to assemble vehicles for both companies. Toyota says the venture was created to build vehicles in the United States, while MIT Sloan researchers later described the factory as a test of whether Toyota’s production system could work with a unionized American workforce. The plant became one of the most closely watched industrial experiments in the country because it used many of the same workers from GM’s troubled old Fremont operation. The factory closed in April 2010, and Tesla bought the site the next month, but NUMMI’s methods remained part of the debate over how U.S. plants should be run. ### How did a failed GM plant become a test case for Toyota? The Fremont site had already been through one collapse before NUMMI opened. Tesla says GM operated the plant from 1962 to 1982, and MIT Sloan wrote that NUMMI took over the shell of the GM assembly plant after it closed in 1982. In 1984, Toyota and GM used the site for a venture that each side wanted for different reasons. (pressroom.toyota.com) Toyota said NUMMI was an independent company owned equally by Toyota Motor Corporation and GM, while MIT Sloan said the project gave GM first-hand exposure to an efficient production system and gave Toyota a U.S. manufacturing base. (tesla.com) ### What changed on the factory floor in Fremont? MIT Sloan said NUMMI rehired many of the same people who had worked at the old GM plant. In one of the most-cited details from the case, the researchers wrote that 85% of the newly hired men and women had worked in the previous Fremont factory. John Shook, a former Toyota manager who helped launch NUMMI, wrote in MIT Sloan Management Review that the company turned “the very same workers” from GM’s old Fremont plant into a model manufacturing workforce by introducing Toyota production and management systems. (pressroom.toyota.com) Shook’s account focused on standardized work, problem-solving on the line and a different relationship between supervisors and hourly workers. (sloanreview.mit.edu) “This American Life,” in a 2010 episode reported by Frank Langfitt, said grievances and absenteeism fell sharply after the new system took hold. The program said many workers preferred the teamwork-based system at NUMMI to the old adversarial structure at GM. ### Why did NUMMI matter beyond one California plant? MIT Sloan called NUMMI a case in which a new production system and a foreign management culture transformed one of GM’s worst plants into a world-class assembly operation in a unionized setting. (sloanreview.mit.edu) Stanford Graduate School of Business separately described NUMMI as one of the most efficient U.S. manufacturing plants and said its vehicles ranked near the top of quality ratings. (thisamericanlife.org) The significance of that result was not limited to Fremont. MIT Sloan said NUMMI showed how organizational culture and factory practices could change performance, and the National Bureau of Economic Research later cited NUMMI in work on management practices and labor relations in the decline of GM. ### If NUMMI worked, why didn’t it last? (sloanreview.mit.edu) March 31, 2010, was the date Toyota set to end its production contract with NUMMI after GM had already moved to end its own production there in 2009. Toyota said GM’s decision to stop production of the Pontiac Vibe set off the final phase of the shutdown, and Toyota later said it would shift Corolla and Tacoma production to wholly owned plants. (sloanreview.mit.edu) March 18, 2010, brought one of the last major labor announcements at the plant. Toyota said it had committed about $280 million in connection with a NUMMI-UAW agreement that included bonuses for team members who stayed through April 1, 2010. PBS reported in April 2010 that 3,200 employees had already been let go and that the remaining workers would leave after the last vehicle came off the line. (pressroom.toyota.com) That closure ended the Toyota-GM venture, but not the industrial use of the site. ### What is left of NUMMI now? May 2010 was when Tesla purchased the former NUMMI factory, according to Tesla, and the company formally opened the plant as the Tesla Factory in October 2010. (pressroom.toyota.com) Tesla says the first Model S rolled off the line there in June 2012. Today, Tesla says more than 10,000 employees work at the Fremont factory. (pbs.org) The building is now associated with electric vehicles rather than the Toyota-GM venture, but the site still anchors the most visible physical legacy of NUMMI in the Bay Area. (tesla.com) (ir.tesla.com)