NUMMI: from Toyota to GM

In December 1982, General Motors and Toyota signed a joint-venture agreement to operate the recently shuttered GM plant at Fremont, California, which had been the worst-performing assembly facility in the GM system before its closure two years earlier. Toyota would run the plant; GM would learn what Toyota had to teach. The joint venture was called New United Motor Manufacturing Inc. — NUMMI — and it operated, on the same site that is now the Tesla Fremont plant, from 1984 until its closure in 2010. NUMMI is the closest thing American industry has produced to a controlled experiment in the transplantation of the Toyota Production System onto a Western workforce, and the lessons of that experiment have been working their way through American operations ever since.

The 2015 This American Life episode on NUMMI — produced jointly with NPR’s Planet Money and reported by Frank Langfitt and Brian Reed — is the clearest popular account available of what actually happened at the plant, and is the source the practice has most often pointed clients toward. The reporters interviewed many of the original American supervisors, who had travelled to Toyota’s Takaoka plant in Toyota City to learn the system before the Fremont facility reopened. The passage that captures the structural lesson:

> The key to the Toyota Production System was a principle so basic it sounds like an empty management slogan. Teamwork. Back home in Fremont, GM supervisors ordered around large groups of workers. At the Takaoka plant, people were divided into teams of just four or five, switched jobs every few hours to relieve the monotony, and a team leader would step in to help whenever anything went wrong.

The teams of four or five were, in Toyota’s terminology, the operational unit at which the line was actually run; the team leader was an operator, not a supervisor; and the help when things went wrong was the andon cord discipline by which any operator could stop the line.

The NUMMI experiment is sometimes told as a success story and sometimes as a cautionary tale; both readings are correct. The plant successfully produced cars to Toyota quality standards using the same workforce that had been the worst in GM’s system three years earlier. The cultural transplant did not survive the joint venture’s closure, and most of the American supervisors who came back from Takaoka with the discipline ended up unable to install it elsewhere in GM. The site is now Tesla’s principal vehicle assembly plant, which is its own kind of footnote on what the building has been asked to do.

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