An unlikely factory, a landmark success

Published 5:00 am Friday, April 9, 2010

FREMONT, Calif. — Last week, the last of 7.7 million vehicles rolled off the NUMMI assembly line, idling the last of 4,700 workers.

But, far from being an industrial flop, NUMMI over the past 25 years became a landmark of American manufacturing — and proof that innovation in heavy industry was anything but extinct.

“NUMMI really redefined manufacturing in the United States in many ways,” said David Cole, principal executive with the Center for Automotive Research.

A joint venture of General Motors and Toyota Motor Corp. when it opened in late 1984, the Fremont plant marked the first time a Japanese automaker teamed up with a U.S. vehicle manufacturer to produce cars.

“NUMMI was an American success story,” said Perry Wong, director of regional economics with the Milken Institute.

To its bittersweet end, the quality at NUMMI — measured by a paucity of vehicle defects — has rivaled or topped any auto factory worldwide, according to workers at the plant and analysts. NUMMI’s vehicles were not among those that unleashed numerous Toyota recalls earlier this year.

A win-win

When GM and Toyota struck a deal in 1983 to cobble together the oddest of industry couples, each auto titan had plenty on the line.

For GM, the Fremont plant was a way to banish its ossified manufacturing practices and learn Toyota’s new ways to produce vehicles.

For Toyota, NUMMI offered a U.S. beachhead and immersion in the quirks of the nation’s creaky industrial sector.

When the factory’s first vehicle — a Chevy Nova — was produced in 1984, it was not at all certain that GM and Toyota would accomplish their goals.

Both succeeded to a great extent, but maybe not fully.

Some experts think GM was not an apt enough student to avoid bankruptcy, an event that shoved the factory onto a fast track to shutdown. Others suggested that Toyota never became comfortable with the NUMMI union.

“General Motors did try to learn the Japanese techniques and how to make the operation more streamlined and introduce quality control,” Wong said. “Perhaps GM could have done better.”

Still, successes far outstripped disappointments, according to several analysts. NUMMI marked the first time that Toyota had to deal with an organized work force and the sometimes arcane work rules of the United Auto Workers.

“The big question mark was whether Toyota’s legendary production system could work, even with a unionized American work force,” said University of California-Berkeley professor Harley Shaiken, a member of the university’s Institute for Research on Labor and Employment.

The answer was yes — even a resounding yes.

“From early on, NUMMI was a plant that was competitive with Japan’s plants,” Shaiken said. “And NUMMI was at the top of the list among American auto plants.”

Consistent quality

New verbiage arrived in the United States, along with newfangled ways to make cars, due to NUMMI.

Kaizen, the Japanese word for continuous improvement, became a staple of the language at the plant. Just-in-time manufacturing, a more streamlined assembly process, was another catchphrase.

The concept of team members and team leaders replaced the tradition of workers and foremen. Rank-and-file team members were empowered to halt the assembly line if they saw fit.

“It was a great way for Toyota to explore how its manufacturing systems could be adapted in the U.S.,” Toyota spokesman Mike Goss said. “We also learned a great deal about how American ingenuity can be applied to our systems. Toyota greatly valued the NUMMI experience.”

“NUMMI played an important role in the history of the U.S. automotive industry, and that’s something of which we are very proud,” said Lance Tomasu, a NUMMI spokesman. “We’re also proud that generations of workers learned important skills and built careers working at NUMMI.”

At the end of February, when NUMMI workers knew they only had a few weeks left, a surprise audit confirmed that quality had not eroded.

Toyota inspectors checked 100 vehicles, split evenly between Corolla passenger cars and Tacoma trucks, said David Karlin, a quality control team leader on the Tacoma truck line.

The audit found that the Corollas had 0.1 defects per 100 vehicles, and the Tacomas had 0.16 defects per 100, Karlin said. The goal was 0.2 defects per 100 vehicles.

“That was an awesome result,” Karlin said. “The quality is still there.”

Overcapacity

Rich Castaneda, a San Jose resident who works in quality control on the Corolla at NUMMI, recalls the differences between his years at the Ford plant in Milpitas and at the NUMMI factory.

“The quality is so much better at NUMMI,” he said. “At Ford, you did only one job unless somebody quit or retired. At NUMMI, I was taught five or six jobs.”

Perhaps NUMMI was a victim of its own success. Toyota learned so much from the plant about how to manufacture in North America that over the decades it became a less essential cog for the automaker.

“NUMMI just lived past its useful life,” Cole said. “The real curse was the overcapacity. NUMMI had old capacity, and old capacity is always more vulnerable.”

Nevertheless, American industry leaders learned much.

“In the new century, American car manufacturing has the same quality as the foreign companies,” Wong said. “That all started with NUMMI.”

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