Partnership Pays Off

Jan. 19, 2006
NUMMI 'experiment' today employs 5,000; produces Pontiac Vibe and Toyota Corolla, Tacoma.

It was 1984, and Toyota entered into a joint venture with General Motors to test the dramatic potential of TPS in an American production floor environment," notes Dennis Cuneo, senior vice president of Toyota Motor North America. Cuneo, the fourth employee hired for the operation, says the plant at Fremont, Calif., had been closed by GM two years earlier because of problems with quality, productivity and union/management relationships.

Toyota began operating the joint venture, known as New United Motor Manufacturing Inc. (NUMMI) by successfully teaming with the UAW. Cuneo says GM was intent on studying how TPS could optimize plant floor operations while Toyota was intent on sampling the U.S. plant operating environment -- how the American UAW workers interfaced with TPS.

Philosophies at the enterprise management level were not the primary goal. "For both Toyota and GM, NUMMI began a way of keeping risk at a minimum during a learning process." He notes that the GM study team is still operational at the plant.

Since 1984 NUMMI's employment has risen to 5,000 people with record levels of vehicle production. The facility produces GM's Pontiac Vibe and Toyota's Corolla and its Tacoma pickup truck.

Cuneo says NUMMI's siting at Fremont, Calif., was simply the result of being the plant GM offered. "Since then Toyota's plant siting decisions reflect customer and supplier issues. For example, an assembly plant would ideally involve 1,500 acres that's easy to build on, service by two railroads, interstate highway access, no unfavorable environmental issues and a population base of at least 250,000 within a reasonable commuting distance. Availability of electricity and natural gas are important infrastructure elements, Cuneo says.

In 1988, following NUMMI's success -- headlined primarily for its production achievements -- Georgetown, Ky., became the location for Toyota's first plant in the U.S.

By the mid-1990s North America was a substantial contributor to Toyota's launch of its Global 10 initiative to gain 10% of the global automobile market by 2000. (Toyota reached 10.01%.) Then in April 2002 the company projected goals of about 15% for 2010. (Last year Japan's Asahi newspaper reported that Toyota executives approached Fuji Heavy Industries Ltd. to build up to 100,000 Toyota vehicles at its Subaru plant in Lafayette, Ind.)

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