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Manufacturing · Profile from Manufacturing Research Companion: Companies, Strategic Moves, and Technical Studies

NUMMI (New United Motor Manufacturing, Inc.)

The 50/50 joint venture of General Motors and Toyota that reopened GM's closed Fremont, California assembly plant under Toyota management. The partners agreed it in Feb 1983, the FTC cleared it with conditions in 1984, and production began in Dec 1984. It ran until GM left in its 2009 bankruptcy and Toyota ended production on 1 Apr 2010; the last car was a red Corolla (reported). NUMMI is the most important natural experiment in the history of production systems (02). The plant had been one of GM's worst for absenteeism, defects and grievances (reported). Within a few years, with largely the same UAW workforce, it reached quality and productivity comparable with Toyota's Japanese plants (MIT International Motor Vehicle Program, reported). The building and the people were the same; the production system was different. NUMMI's second lesson came from its partner. GM could see the system every day for twenty-five years and still could not spread it through its own plants at scale for many years. Process capability can be learned, but it is hard to copy. The site has belonged to Tesla since 2010 (Tesla Manufacturing). This profile keeps facts equal to Supply chain: Toyota's NUMMI move and tells the story from the production-system side.

At a glance

Founded
Agreement announced Feb 1983 (reported); FTC clearance with conditions 1984 (the venture limited in duration and scope, reported); first production Dec 1984
Location
Fremont, California (Alameda County), the former GM Fremont Assembly plant (GM production 1962–82, from memory for the opening year, verify; closed 1982)
Ownership / structure
50/50 GM–Toyota joint venture; Toyota managed the plant; GM contributed the closed plant, Toyota cash and the production system (Supply chain)
Workforce
UAW-represented, many rehired from the old GM plant; ~4,700 UAW-represented workers at closure (reported; some sources ~5,000); UAW Local 1364 (from memory, verify)
Capacity
~250,000 vehicles a year (reported, verify — equal to Supply chain); a truck line added for the Toyota Tacoma (1995, from memory for the year, verify)
Products
Chevrolet Nova (a Corolla derivative, first product); later Chevrolet/Geo Prizm, Toyota Corolla, Pontiac Vibe, Toyota Voltz (for Japan), Toyota Tacoma (reported; years from memory, verify)
End
GM withdrew in its 2009 bankruptcy; Toyota ended production 1 Apr 2010 (last car a red Corolla, reported); equipment auctioned, with robots and tooling going to Toyota plants in Kentucky, Texas and Mississippi (reported)
Afterlife
Tesla bought the land and facility in 2010 ($42m excl. equipment, Tesla 8-K) with Toyota buying $50m of Tesla stock (Tesla 10-K) — equal to Energy: Tesla
Signature moves
Agreement to reopen Fremont (1983); first car with the old UAW workforce (1984); the andon cord and team system (1984); GM's failure to transfer the system (from 1986); the Tacoma line (1995); GM's exit in bankruptcy (2009); Toyota's closure (2010); Tesla's purchase (2010)

8 strategic moves analysed

Each one gets a full strategy file in the companion: context, the decision, the financing, what happened, and the lesson.

  1. 1983

    GM Toyota Agreement to Reopen Fremont

    Joint venture; new plant (brownfield reopening)

  2. 1984

    Andon Cord and Team System

    Production-system change (jidoka with andon line-stop, team organisation, standard work, kaizen)

  3. 1984

    First Car with the Old UAW Workforce

    Plant reopening; labour agreement (UAW contract with flexible work rules and employment-security commitments)

  4. 1986

    GM Fails to Transfer the System

    Production-system change (attempted transfer of NUMMI's methods to GM plants) — failure

  5. 1995

    Toyota Tacoma Line

    New line (expansion): a pickup-truck line for Toyota alongside the car line

  6. 2009

    GM Exits in Bankruptcy

    Joint-venture exit; restructuring or bankruptcy (GM's)

  7. 2010

    Tesla Buys Fremont

    Plant sale (divestment of a closed site); joint venture or licensing (Toyota's equity investment in Tesla)

  8. 2010

    Toyota Closes the Plant

    Plant closure; footprint consolidation