NUMMI


New United Motor Manufacturing, Inc. was an automobile manufacturing company in Fremont, California, jointly owned by General Motors and Toyota that opened in 1984 and closed in 2010.
After the plant was closed by its owners, the facility was sold to Tesla, Inc. and reopened as a 100% Tesla-owned production facility in October 2010, becoming known as the Tesla Factory.
The plant is located in the East Industrial area of Fremont next to the Mud Slough between Interstate 880 and Interstate 680.
NUMMI yearly production peaked at 428,633 vehicles in 2006.

Overview

NUMMI was established at the former General Motors Fremont Assembly site that closed in 1982; it had been a GM plant since 1962. GM and Toyota reopened the factory as a joint venture in 1984 to manufacture vehicles to be sold under both brands.
GM saw the joint venture as an opportunity to learn about lean manufacturing from the Japanese company, while Toyota gained its first manufacturing base in North America and a chance to implement its production system in an American labor environment, avoiding possible import restrictions. GM employees went to Toyota's Takaoka plant in Japan and improved production at NUMMI, Spring Hill and other sites, particularly after Jack Smith spread the program.
Up to May 2010, NUMMI built an average of 6000 vehicles a week, or nearly eight million cars and trucks since opening in 1984. In 1997 alone, NUMMI produced 357,809 cars and trucks,. Production reached its annual peak of 428,633 units in 2006.
GM pulled out of the venture in June 2009 due to its bankruptcy, and several months later Toyota announced plans to pull out by March 2010. The closure was opposed by city officials, including Fremont Mayor Bob Wasserman, who lobbied to keep NUMMI in the city. However, at 9:40am on April 1, 2010, the plant produced its last car, a red Toyota Corolla S believed to be destined for a museum in Japan. Production of Corollas in North America moved to Toyota Motor Manufacturing Mississippi assembly plant in Blue Springs, Mississippi and Toyota Motor Manufacturing Canada 'North' assembly plant in Cambridge, Ontario.
On May 20, 2010, it was announced that Tesla Motors had purchased part of the NUMMI plant and renamed it Tesla Factory, producing the Tesla Model S. By 2016, the plant had 6,000 employees, with plans for more.

Facility

The plant spans the equivalent of about 88 football fields, and is configured into a main building that does the final assembly of vehicles and five other facilities:
In the initial 20 months of hiring, NUMMI hired 2,200 hourly workers—85% from the old GM-Fremont plant, among them the old union hierarchy. The union also played a role in selecting managers, except for 16 directly assigned by GM and about 30 Toyota managers and production coordinators from Japan, including the CEO, Tatsuro Toyoda, part of the company's founding family. By 2006, the plant had 5,500 employees.
Until the facility's closure in April 2010, 4,700 workers were employed. NUMMI employees were represented by The International, United Automobile, Aerospace and Agricultural Implement Workers of America Local 2244.

Models produced

The Fremont, California plant operated by NUMMI produced the following models:
Production of the Pontiac Vibe hatchback was discontinued in August 2009 as GM phased out the Pontiac brand in the midst of a bailout. Along with Saturn and Hummer, Pontiac joined Oldsmobile among the GM brands that are no longer in production.
Beginning in September 1986, the NUMMI plant produced the Corolla. In January 1995, it began producing the Toyota Tacoma pickup truck.

History

Background

The Fremont Assembly factory which NUMMI took over was built by General Motors and operated by them from 1962 to 1982, when the Fremont employees were "considered the worst workforce in the automobile industry in the United States", according to the United Auto Workers. Employees drank alcohol on the job, were frequently absent, and even committed petty acts of sabotage such as putting "Coke bottles inside the door panels, so they'd rattle and annoy the customer." GM was departmentalized as per Henry Ford's Division of labour, but without the necessary communication; management did not consider workers' view of production, and quantity was preferred over quality.

Makeover

The idea of reopening the plant emerged from the need that GM had to build high-quality and profitable small cars and the need Toyota had to start building cars in the United States, a requirement due to the possibility of import restrictions by the U.S. Congress. The goal was to produce high quality at low cost, but supported by including workers in the process. The choice of the Fremont plant and its workers was unusual because of the previous problems. In spite of the history and reputation, when NUMMI reopened the factory for production in 1984, 85% of the troublesome GM workforce was rehired, with some sent to Japan to learn the Toyota Production System. Workers who made the transition identified the emphasis on quality and teamwork by Toyota management as what motivated a change in work ethic. Among the cultural changes were the same uniform, parking and cafeterias for all levels of employment in order to promote the team concept, and a no-layoff policy. Built-in process quality and employee suggestion programs for continual improvement were other changes. Consensus decision-making reached management level, in contrast with the old departmentalization.
By December 1984, the first car, a yellow Chevrolet Nova rolled off the assembly line. Almost right away, the NUMMI factory was producing cars at the same speed and with as few defects per 100 vehicles as those produced in Japan, with higher worker satisfaction.
In 1988 NUMMI operated at 58.6% capacity, and had not reached break-even by 1991.
Despite the early success at Fremont, by 1998 GM had still not been able to implement lean manufacturing in the rest of the United States, though GM managers trained at NUMMI were successful in introducing the approach to its unionized factories in Brazil.
NUMMI was Toyota's only unionized plant in the U.S.

Events as closure approached

Some of the challenges for the factory were higher costs.
Daily tours of the plant, offered free to the public, were ended on February 27, 2009.
On June 29, 2009, General Motors announced that they would discontinue the joint venture with Toyota.
The announcement was made following GM CEO Fritz Henderson announcing in April that General Motors would discontinue the Pontiac Vibe production at NUMMI. The two automakers were in discussions but could not find a suitable product to be produced at the factory. “After extensive analysis, GM and Toyota could not reach an agreement on a future product plan that made sense for all parties,” GM North America President Troy Clarke said in a statement.
"Toyota’s hope was to continue the venture and we haven’t yet decided any plans at the factory,” said Hideaki Homma, Toyota's Tokyo-based spokesman. “While we respect this decision by GM, the economic and business environment surrounding Toyota is also extremely severe, and so this decision by GM makes the situation even more difficult for Toyota.” Before GM decided to sever its stake in the NUMMI joint venture, Toyota was considering offering a version of its Prius hybrid to GM that would be built at the factory and sold as a GM model but Toyota has indicated that it was seriously considering exiting the venture also.
On August 27, 2009, Toyota announced that it would discontinue its production contract with NUMMI, shifting Tacoma production to its San Antonio, Texas pickup plant and Corolla assembly to Blue Springs, Mississippi. A total of 5,400 employees were affected, including 4,550 UAW hourly workers.
In November 2009, Toyota's head of U.S. sales took calls from autoworkers, saying that though it has been a difficult decision to shut down the plant, "the economics of having a plant in California so far away from the supplier lines" in the Midwest "just doesn't make business sense" for Toyota to continue running the NUMMI plant. Meanwhile, autoworkers prepared for the shut down by refreshing skills and planning for career transitions. Federal, state, and local officials also participated in the transition discussions. In March 2010, 90% of the 3,700 UAW workers at the plant approved a $281 million severance package averaging $54,000, paid by Toyota to the plant's 4,700 employees.
Production of the Toyota models that used to be made at NUMMI was moved to Toyota's plants in southern states.

Alternatives to closure

In January 2010, a possible use of the land was proposed: a new stadium for home games of the Oakland Athletics of Major League Baseball. It is close to the proposed site of Cisco Field, which was never formally approved.
State officials crafted sales tax exemption on new factory equipment to preserve NUMMI. A regional committee was formed in February 2010 to investigate the closure of the plant, and the facility was appraised while operating.
On March 10, 2010, Aurica Motors announced a proposal to save the NUMMI automotive plant and the jobs associated with it. The company said that it intended to raise investment capital and garner federal economic stimulus funds to help retrain the workers and retool the facility for production of electrical vehicles.

End

The NUMMI plant ceased operations on April 1, 2010, ending the Toyota-GM joint venture. California's last automobile manufacturing plant saw its last car, a Corolla, roll off the assembly line. NUMMI sold off equipment at an auction, with robots and tooling going to Toyota plants in Kentucky, Texas and Mississippi. NUMMI sold some equipment to Tesla for $15 million.

After NUMMI: use of the land and facility

On May 20, 2010, Tesla Motors and Toyota announced a partnership to work on electric vehicle development, which included Tesla's partial purchase of the former NUMMI site for $42 million, mainly consisting of the factory building, but not equipment. Tesla CEO Elon Musk said the Tesla S sedan will be built at the plant. When Tesla took over the location in 2010, they renamed it the Tesla Factory. Tesla would be collaborating with Toyota on the "development of electric vehicles, parts, and production system and engineering support". According to Tesla Motors' plans, the plant would first be used to produce the Tesla Model S sedan with "future vehicles" following in the coming years. The plant was projected to produce 20,000 vehicles a year and employ 1,000 workers to start.