NUMMI

Template:Short description Template:About Template:Use mdy dates {{#invoke:Infobox|infobox}}Template:Template other Template:Main other{{#invoke:Check for clobbered parameters|check|nested=1|template=Infobox company|cat=Template:Main other|name; company_name|logo; company_logo|logo_alt; alt|trade_name; trading_name|former_names; former_name|type; company_type|predecessors; predecessor|successors; successor|foundation; founded|founders; founder|defunct; dissolved|hq_location; location|hq_location_city; location_city|hq_location_country; location_country|num_locations; locations|areas_served; area_served|net_income; profit|net_income_year; profit_year|owners; owner |homepage; website }}{{#invoke:Check for unknown parameters|check|unknown=Template:Main other|preview=Page using Template:Infobox company with unknown parameter "_VALUE_" | ignoreblank=y | alt | area_served | areas_served | assets | assets_year | aum | brands | company_logo | company_name | company_type | defunct | dissolved | divisions | embed | equity | equity_year | fate | footnotes | former_name | former_names | foundation | founded | founder | founders | genre | homepage | hq_location | hq_location_city | hq_location_country | incorporated | image | image_alt | image_caption | image_size | image_upright | income_year | industry | ISIN | key_people | location | location_city | location_country | locations | logo | logo_alt | logo_caption | logo_class | logo_size | logo_upright | members | members_year | module | name | native_name | native_name_lang | net_income | net_income_year | num_employees | num_employees_year | num_locations | num_locations_year | operating_income | owner | owners | parent | predecessor | predecessors | production | production_year | products | profit | profit_year | rating | ratio | revenue | revenue_year | romanized_name | services | subsid | successor | successors | traded_as | trade_name | trading_name | type | website| qid | fetchwikidata | suppressfields | noicon | nocat | demo | categories }} New United Motor Manufacturing, Inc. (NUMMI) was an American automobile manufacturing company in Fremont, California, jointly owned by General Motors and Toyota, that opened in 1984 and closed in April 2010. The plant is located in the East Industrial area of Fremont next to the Mud Slough between Interstate 880 and Interstate 680, the plant's peak production year was 2006, when it manufactured 428,633 vehicles.

After the plant was closed by its owners, the facility was sold to Tesla and reopened in October 2010, becoming known as the Tesla Fremont Factory.

HistoryEdit

BackgroundEdit

Before NUMMI, the site was the former Fremont Assembly that General Motors operated between 1962 and 1982.<ref name="mullfre">Template:Cite news</ref><ref name="plftj">Template:Cite news</ref><ref name="timeline">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Employees at the Fremont plant<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> were "considered the worst workforce in the automobile industry in the United States," according to a later recounting by a leader of the workers' own union, the United Auto Workers (UAW).<ref name="atc2010">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref name="Langfitt 2015">Template:Cite news</ref>

GM as a company was departmentalized (design, manufacturing) as per Henry Ford's division of labor, but without the necessary communication and collaboration between the departments. There was an adversarial relationship between workers and plant supervisors, with management not considering the employees' view on production, and quantity was preferred over quality.<ref name="Langfitt 2015" /><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>Template:Cite book</ref> Like all American car plants, the production lines at Fremont seldom stopped, and when mistakes were made, cars continued down the line with the expectation that they would be fixed later.<ref name="Langfitt 2015" /> By the early 1980s, the adversarial relationship had deteriorated to the point where employees drank alcohol, smoked marijuana (at the time, an illegal activity), were frequently absent (enough so that the production line could not be started), and even committed petty acts of sabotage such as putting "Coke bottles inside the door panels, so they'd rattle and annoy the customer."<ref name="atc2010" /><ref name="Langfitt 2015" />

Attempts to discipline workers were often met with grievances or even strikes, putting the plant into near-continuous chaos. By 1982, GM had had enough and closed Fremont Assembly and laid off its thousands of workers.<ref name="Langfitt 2015" />

Transforming Fremont Assembly into NUMMIEdit

At about the same time, GM was struggling to profitably build high-quality and fuel-efficient small cars that consumers demanded after the energy crisis of the 1970s. Consumers started turning to foreign automakers for these vehicles, prompting the U.S. Congress to consider import restrictions to protect the domestic auto industry.<ref name="atc2010" /><ref name="Langfitt 2015" /> That led GM and Toyota to team up and create New United Motor Manufacturing, Inc. (NUMMI), a joint venture to manufacture vehicles to be sold under both brands.<ref name="timeline" />

GM saw the joint venture as a way to get access to quality small cars<ref name="Langfitt 2015" /> and an opportunity to learn about the Toyota Production System and The Toyota Way, a series of lean manufacturing and management philosophies that had made the company a leader in the automotive manufacturing and production industry.<ref>Brian Bremner, B. and C. Dawson (November 17, 2003). "Can Anything Stop Toyota?: An inside look at how it's reinventing the auto industry". Business Week.</ref> For Toyota, the factory gave the company its first manufacturing base in North America allowing it to avoid tariffs on imported vehicles<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> and saw GM as a partner that could show them how to navigate the American labor environment, particularly relations with the United Auto Workers union.<ref name="Adler 1992">Template:Cite report</ref>Template:Rp<ref name="Adler 1995">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref name="Langfitt 2015" />

The companies made the unusual choice to remake the troubled Fremont Assembly into the new NUMMI plant. The leadership of the UAW union insisted on re-hiring the same union leadership that had overseen GM's worst workforce. GM was against it, but Toyota agreed, believing that their system could turn things around. However, Toyota insisted that the plant would need to operate differently and old seniority rules would not apply. The workers hated the proposed changes, but desperately needed jobs. Ultimately, over 85% of NUMMI's initial workforce were the workers laid off at Fremont Assembly in 1982.<ref name="Adler 1992" />Template:Rp GM would also assign 16 managers to the plant and Toyota sent 30 managers and production coordinators from Japan, including the CEO, Tatsuro Toyoda, part of the company's founding family.<ref name="Adler 1993">Template:Cite journal</ref>

Ahead of the reopening of the plant, Toyota sent many of the workers to Toyota's Takaoka plant in Japan<ref name="Adler 1992" />Template:Rp to learn the Toyota Production System and actually work for a few days on the assembly line.<ref name="atc2010" /><ref name="Langfitt 2015" /> Workers who made the transition identified the emphasis on quality and teamwork by Toyota management as what motivated a change in work ethic.<ref name="atc2010" /><ref name="Langfitt 2015" /> Among the cultural changes were the same uniform, parking and cafeterias for all levels of employment in order to promote a team concept, and a no-layoff policy.<ref name="Adler 1992" />Template:Rp Built-in process quality and employee suggestion programs for continual improvement<ref name="Adler 1992" />Template:Rp were other changes.<ref name="Adler 1992" />Template:Rp Consensus decision-making reached management level, in contrast with the old departmentalization.<ref name="Adler 1992" />Template:Rp

By December 1984 (two years after the closure of Fremont Assembly), NUMMI's first car, a yellow Chevrolet Nova, rolled off the assembly line. The plant started producing the Toyota Corolla in September 1986.<ref name="timeline" /> Almost right away, the NUMMI factory was producing cars at the same speed as the Japanese factories and Corollas produced at NUMMI were judged to be equal in quality to those produced in Japan with a similar number of defects per 100 vehicles.<ref name="Adler 1992" />Template:Rp<ref name="atc2010" /><ref name="Langfitt 2015" />

In 1990, for the 1991 model year, Toyota started building the Toyota Hilux (also known as the Toyota Pickup) at NUMMI, allowing the company to completely avoid the chicken tax, a 25 percent tariff on light trucks imposed in 1964. Previously, the company had avoided a large portion of the tariff by importing the truck as an incomplete chassis cab (which included the entire truck, less the truck bed) which only faced a 4% tariff.<ref name="ending chicken2">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Once in the United States, Toyota Auto Body California (TABC) would produce the truck beds and attach them to the trucks. TABC was the first manufacturing investment in the U.S. for Toyota.<ref>Template:Cite press release</ref> This tariff loophole was closed in 1980.

NUMMI did face some financial challenges, with cars costing more to build than at other GM plants and only operating at 58.6% capacity by 1988.<ref name="sim2006">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> The plant had not reached break-even by 1991.<ref name="Adler 1992" />Template:Rp

In January 1995, NUMMI began producing the Toyota Tacoma, a pickup truck designed exclusively for the North American market.<ref name="timeline" />

Up to May 2010, NUMMI built an average of 6,000 vehicles a week, or nearly eight million cars and trucks since opening in 1984.<ref name="atc2010" /><ref name="Langfitt 2015" /> In 1997, NUMMI produced 357,809 cars and trucks.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Production reached its annual peak of 428,633 units in 2006.<ref name="peakprod">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

The end of the joint ventureEdit

Toyota took the lessons it learned from NUMMI and went on to establish the wholly-owned Toyota Motor Manufacturing USA (later renamed Toyota Motor Manufacturing Kentucky) and Toyota Motor Manufacturing Canada plants in 1986, and by 2009 the company was operating a dozen manufacturing facilities in North America.<ref name="Toyota 2019">Template:Cite press release</ref> However, NUMMI remained Toyota's only unionized plant in the United States.<ref name="inthesetimes20090828">Template:Cite news</ref>

GM executives, particularly CEO John F. Smith Jr., attempted to spread the Toyota Production System to other assembly plants,<ref name="peakprod" /><ref name="popmech">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref name="change">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> but it proved largely unsuccessful. Despite having a front row seat to learn about the production system, by 1998 (15 years later) GM had still not been able to implement lean manufacturing in the rest of the United States,<ref name="Langfitt 2015" /><ref name="hbr2009-09">Template:Cite journal</ref> though GM managers trained at NUMMI were successful in introducing the approach to its unionized factories in Brazil.<ref name="brazil98">Template:Cite news</ref>

By 2009, GM was in serious financial trouble and filed for Chapter 11 bankruptcy reorganization. In April the company confirmed its commitment to NUMMI<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> and in June announced that it was scrapping the Pontiac brand which would end production of the Corolla-derived Pontiac Vibe at NUMMI by August 2009.<ref name="GmDiscontinuation">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> That triggered several months of discussions between the automakers, trying to find products that could be produced at the factory for both companies, with Toyota even offering to build a version of its Prius hybrid for GM at the factory.<ref name="reuters20090710">Template:Cite news</ref><ref name="Bloomberg20090711">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

Fremont Mayor Bob Wasserman, city officials and California Governor Arnold Schwarzenegger lobbied the automakers to find a product and keep NUMMI open.<ref>Template:Cite news</ref><ref>Template:Cite news</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref name="kcbs">Template:Cite news</ref> State officials crafted sales tax exemption on new factory equipment to preserve NUMMI.<ref name="SFgate">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> A regional committee was formed in February 2010 to investigate the closure of the plant,<ref name="shutdown panel">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> and the facility was appraised while operating.<ref name="Maynards">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

The talks ultimately failed and in June 2009 the GM announced that it would pull out of NUMMI.<ref name="LaTimesGmEnds">Template:Cite news</ref><ref name="GN20090828">{{#invoke:citation/CS1|citation |CitationClass=web }}Template:Dead link Template:Cbignore</ref><ref name="SFGate20090828">Template:Cite news</ref> On August 27, 2009, Toyota announced that it would also discontinue production at NUMMI by March 2010, marking the first time the company had ever closed a factory.<ref name="Bloomberg20090828">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

In November 2009 call with autoworkers Toyota's head of U.S. sales said that though it was 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.<ref name="KGO20091117">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Autoworkers prepared for the shut down by refreshing skills and planning for career transitions.<ref name="CCTimes20091116">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref name="SFChronicle20091114">Template:Cite news</ref> In March 2010, 90% of the workers at the plant approved a $281 million severance package from Toyota that had been negotiated by the UAW, averaging $54,000 to the plant's 4,700 employees.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>Template:Cite news</ref>

Production of the Corolla in North America was shifted to Toyota Motor Manufacturing Canada until the new Toyota Motor Manufacturing Mississippi assembly plant could open in October 2011. Production of the Tacoma had already partially shifted to Toyota Motor Manufacturing de Baja California in 2004, and the remaining work shifted to Toyota Motor Manufacturing Texas.<ref name="inthesetimes20090828" />

At 9:40am on April 1, 2010, the plant produced its last car, a red Toyota Corolla.<ref name="NUMMI Plant Closure">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> NUMMI sold off equipment at an auction,<ref name="Maynards" /> with robots and tooling going to Toyota's plants in Kentucky, Texas<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> and Mississippi.<ref name="Hull2010">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> NUMMI sold some equipment to Tesla for $15 million.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>

Reuse of the factoryEdit

Template:Further Ahead of the closure of NUMMI, several possible uses for the facility were proposed.

In January 2010, the land was considered for a new stadium for the Oakland Athletics of Major League Baseball. It is close to the proposed site of Cisco Field, which was never formally approved.<ref name="SFChronicle20100108">Template:Cite news</ref> On March 10, 2010, Aurica Motors announced 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 electric vehicles.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Both proposals went nowhere.

On May 20, 2010, Tesla Motors announced that it would purchase most (210 of 370 acres)<ref name="Hull2010" /> of the former NUMMI site from Toyota for $42 million, significantly under market value.<ref name="San Francisco Business Times2">Template:Cite news</ref><ref name="Motavalli2">Template:Cite news</ref> As part of the agreement, Toyota would also purchase $50 million of common stock when Tesla held its IPO the next month. In exchange, Tesla agreed to partner with Toyota on the "development of electric vehicles, parts, and production system and engineering support." The two companies would later end their partnership in 2017.<ref>Template:Cite news</ref>

The plant, renamed the Tesla Fremont Factory, produces the Model S, Model X, Model 3, and Model Y vehicles.<ref name="engadget">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref><ref name="detnews2">Tierney, Christine. Toyota invests in Tesla to help reopen Calif. plant The Detroit News, May 20, 2010. Retrieved: May 22, 2010</ref><ref name="tesla factory release">Template:Cite press release</ref> Template:As of, the plant employs 22,000 people, far greater than the 5,500 employees of NUMMI, and produced nearly 560,000 vehicles, 30 percent more than the maximum output of NUMMI.<ref name="peakprod" /><ref name="Q4 2023 Shareholder Deck">{{#invoke:citation/CS1|citation |CitationClass=web }}</ref>