This week’s This American Life is devoted to the closing of NUMMI, an auto plant that was a joint venture between Toyota and GM. It’s both touching and infuriating.
The story of how the worst plant in GM was transformed by Toyota’s methods is an affecting tale of human redemption. “Old, fat” UAW members, accustomed to drug abuse and filing grievances, became some of the most efficient workers in the world. They also underwent personal transformations. One guy who had been ashamed of the cars he built put postcards under the windshields of NUMMI-built vehicles he saw around town, asking the owners what they thought of them.
The infuriating part of the program is how it took GM 15 years to learn the NUMMI lessons, mostly due to management, but the UAW played its part. The title of this post comes from one NUMMI manager’s attempt to explain why GM changes do slowly.
The podcast is free through the weekend, and available here [mp3] or through iTunes.
It was a good show, but it should have included some of the more recent history that led to the shutdown.
I had a 1995 Geo Prizm built at NUMMI. 187000 miles and still starts in the dead of winter with no trouble.
Klaus NUMMI rocks! Oh, wait.
Seriously, TAL is an American treasure. What they did with the Giant Pool of Money and assorted similar shows makes me heart Ira Glass, et. al.
DougL (frmrly: Conservatively Liberal)
I worked in a boat manufacturing plant (engines/rigging/electronics dept shift super) and I got to watch the management run the place into the ground. People ‘on the ground’ in the plant knew what was going on and what needed to be done but management knew better. They buried us in shit ‘engineering’ that had to be re-engineered on the production line, lousy plant management that thought more paperwork solved everything, and craploads more paperwork just to make the smallest change which somehow was stored in a way that made dealer servicing the different models a nightmare. The place had ran great for fifteen years until the owner sold out to a group of guys who normally invested in the medical field (hospitals, clinics and such). They may have done well with the medical field they thought their touch would extend to boat manufacturing. It didn’t. In less than a year and a half the company was bankrupt, closed and the assets sold off.
Smart guys eh? I feel for the workers who lost out at GM because I know the feeling. Just because you are management doesn’t mean you have a clue wtf is going on in production and engineering.
Loved the NUMMI episode. TAL is one of the reasons I am still a donating member of my local public radio affiliate. It’s so consistently good and the shows hold up over time.
Bob In Pacifica
I drive a Corolla built at NUMMI. Runs fine, only accelerates when I put my foot down on the pedal.
The shutdown is going to kill Fremont, California.
On the news this a.m. one story is that GM sold a quarter million cars in China. I’m just guessing but I doubt that one of them was built in the U.S.
@Bob In Pacifica:
“I’m just guessing but I doubt that one of them was built in the U.S”
I was in China a few weeks ago, and I saw a couple of Escalades on the drive from the Hong Kong border to Dongguan. Nouveau riche Chinese industrialists are no more immune to the lure of bling than nouveau riche NBA players.
My 2009 Pontiac Vibe was made there. It’s a nice little car (although mine may be the only car built in 2009 to not have power windows). Pontiac was stupid to discontinue the Vibe, even though the 2009+ models have been subject to the same safety recall as the Toyotas.
I’m puzzled. If UAW always build such bad cars how did the industry survive?
@DougL (frmrly: Conservatively Liberal): I did a stint as a consultant for a short while, and after a site visit at one place, my team leader asked me what I thought would help them. I said “First thing we should do is confiscate all their management magazines. Second is to cancel their subscriptions.” I swear, they were using more damn buzzwords in their internal documentation than anything I’d seen outside of the Dilbert “mission statement generator.” Then you’d listen to them talking about being “proactive” and “empowering” and applying “TQM,” and realize that they didn’t have a f**king clue as to what the hell they were talking about. It was the hot fad/words in their management magazines, so they were jumping on the bandwagon.
Of course, that’s not what we actually did, or told them. I didn’t last long though. Tolerating fools gladly is not something I do.
The Moar You Know
That’s a goddamn shame. I had a couple of friends of mine go to work for NUMMI when I was living in SF in the 90s. It was a big deal; they were incredibly selective about who they were hiring, but if you managed to get through all the hoops and get in, it was a damn good job, the kind that we seem unable to create anymore, with good pay and benefits, making a quality product. Something a worker could point to with pride.
It had to be a quality product; NUMMI’s competition were the Japanese-made versions of their cars. There were a lot of folks who were unsure as to whether Americans could make cars to the same level of quality as the Japanese, but as it turns out, with the right kind of management and production processes, they certainly were able to.
It’s not a NUMMI product, but I’ve got a Smyrna, Tennessee-built Nissan pickup with 165,000 miles on it that still doesn’t leak a drop of oil, or have a spot of rust. It does have two problems – one intermittent electrical that does not affect how it runs, and the paint is peeling off – something I’m seeing in all dark-colored cars of that vintage. It ain’t pretty, but it still runs like a stopwatch, which is all I care about.
some other guy
I just passed the 200,000 mile mark on my 1996 Geo Prizm built at NUMMI. I’ve had to do some minor repairs (replaced a seat belt, a door latch, a wheel bearing), but nothing costing more than a few hundred dollars. Not bad for a car I paid only $10,000 for used in 1999.
Too bad Toyota screwed the pooch on the quality recently. I was planning on replacing it with a used Corolla. Now I’m not so sure.
Don’t leave out the suppliers for part of the blame.
When another plant tries the NUMMI stuff they find out that they are getting parts that don’t fit. They try to work with the supplier and basically get a big FU.
I finally listened to this one yesterday, and I have been recommending it to anyone who hasn’t already blocked me on Facebook.
It’s amazing to me that there was so much hubris at GM & at the UAW, as both have been on the wane my entire lifetime. Having come of age in the 1980s, I doubt I’ll ever be able to get to the point where I will willingly buy an American car. This is a brilliant illustration of why that is.
I say that as someone rooting heavily for Ford (& GM & Chrysler if possible) to turn things around.
I have a 2005 NUMMI built Corolla, bought used last year. It is hands down the best used car I’ve ever owned, if not the best car I’ve ever owned. 5 speed with the 1.8 liter engine, steelie rims, great AC and even has hand crank windows and power door locks (weird combination of features). It gets 37 mpg easily and runs like a Swiss watch. It’s cheap to maintain and easy to work on since I do all the routine stuff myself. I had to remind one of my anti-union friends that, yes, Toyota does use UAW labor in their products, and yes the quality is just a good as the non UAW plants. I then pointed to his wife’s Vibe and asked him where it was built…wonder if he figured it out yet.
I live in Fremont and NUMI was pretty amazing to watch. The UAW workers went, in the ’80s, useless meatheads who were proud of being useless meatheads what the segment describes. No surprise they are shutting down NUMI though, the plant must fly in the face of everything GM stands for.
Malron aka eclecticbrotha
Thanks for reminding me of the rampant anti-union bias that exists in the so-called progressive community.
No, the impression I got was that they couldn’t duplicate the Toyota methods company-wide because the changes weren’t just at the factory. The changes at the factory depended on changes with suppliers, who are not so easy to control.
this was the sentiment expressed by UAW workers at the fremont plant pre-NUMI. just listen to the podcast.
some other guy
I just don’t understand why a supplier gets to dictate, well, ANYTHING to a company as large as GM. You’d think the car companies would have Wal-Mart like power to tell their suppliers “you build it to my spec at the price I demand or I’ll take my 1,000,000 piece order elsewhere.”
Or does the fact that they require parts in such huge quantities actually end up locking them into only buying parts from the few mega-suppliers who can handle the demand?
At some point, does too-big-to-fail actually turn into too-big-to-succeed?
It’s baffling to me that a relatively small firm like Hyundai can come into the market and undercut GM’s pricing by thousands of dollars while offering the same or better features. And AFAIK it’s not due to cheap labor since both companies assemble their low-end cars in Mexico.
and just to clarify what i said @here, i mean that the uaw workers readily admitted to drugs, alcohol and all sorts of abuses of their union status at the fremont plant prior to the NUMI transition. there were also plenty of problems with management as well.
Some other guy:
Yeah, it’s a good question. Don’t think they delved into that in the podcast.
the problem is that they were trying to implement the changes on a factory by factory basis. they finally caught that they needed a more widespread change in the past few years. but it was a little too late to avoid bankruptcy.
@some other guy: The American companies have been pulling the Walmart card for years. One of the distinguishing features between the Big 3 and a lot of foreign companies is that the foreign companies allow their suppliers to make money. If domestic suppliers make a cent per unit they’re expected to be happy with it because they’re selling 50,000 per year. Except orders have been slashed over the last few years… So guess who’s holding the bag.
Also they still have engineering departments of their own, whereas the engineering buildings at GM or Chrysler are virtual ghost towns. Take that for what it’s worth.
Don’t be too hard on Pontiac, as they themselves were being ‘discontinued’ by this point…
Anti-union bias? Well, hard hats, ‘Nam, yadda yadda. Comin’ home to roost.
Sez some other guy:
“At some point, does too-big-to-fail actually turn into too-big-to-succeed?”
Is it just me, or does this seem like the absolute key question here?
The UAW did not always build such bad cars. And the industry is obviously hanging on by a thread.
I downloaded the podcast, but haven’t had a chance to listen to the entire thing. It’s on my weekend catch-up list.
You can be pro-union and still recognize the bad decisions and practices that some unions make or turn a blind eye to, that help undermine their own workers.
“Too big to succeed” – Clay Shirkey discusses Tainter’s The Collapse of Complex Societies here. He extrapolates to business models, and would probably argue Tainter’s model could explain GM (etc.).
David in NY
Hey, did the system for replying to a comment change before my very eyes?????
Some fans of the Vibe were hoping that GM would move it over into Chevy’s lineup.
As a 2 time small business owner who has also been employed to manage layers of people, my thought is that the unions share some blame for sure but real long term employee problems are almost always caused by management. From the shortsightedness type of stuff that DougL noted above, to what I call the MBAness that Norbrook posted, bad management is the problem. And it leads to most of the rest of the problems. When management acts like or in fact is at war with their employees, good stuff is almost impossible to get out the back door of the factory, no matter what the product, hard goods, software, or service. Employees make up the company, they do the work, make the product, management is there to help them do that best. Or at least it’s supposed to.
Employees make up the company
The workers should own the means of production! Let us enshrine this in our legal, moral, and social structures!
I listened to part of the broadcast and swore I’d listen to the rest on podcast. It was a typical TAL showstopper. Totally gripping–taking you into another world in all its complexity in a matter of seconds.
On what evidence do you base your belief that GM learned the NUMMI lessons? ‘Cause it sure don’t look like they ever did.
An important element, but not the only one. Arrogance in the front office, unwillingness to change the design/manufacturing integration model, unwillingness to fire the plant managers who wouldn’t get on board, inability of top management to articulate a clear plan that the rest of the company could get behind, UAW intransigence,
and a fanatical devotion to the Pope
Sorry for that last one, I was looking at the wrong list.
Anyway, you get the idea ..
The changes at the factory depended on changes with suppliers, who are not so easy to control.
I find this part hard to believe. The Big 3 have been screwing their suppliers to the wall in Wal-Mart fashion for years; many have gone bust and many others are barely hanging on, which doesn’t sound liek the kind of relationship where they are dictating terms.
It may be that the Big 3, unlike the Japanes, have built such an adversarial and penny-pinching relationship with their suppliers that the suppliers are unwilling to change the tiniest terms without painstaking legalistic process of renegotiation since their profit margins have been squeezed to nothing. The Toyota method depends on flexibility and trust between partners; the GM method was personified by Jose Ignacio Lopez in the 90s, who basically treated suppliers like criminals to be bullied into submission (before he defected to Volkswagen with gobs of confidential GM documents).