Managing Corporate Culture: Nummi
Executive summary
In spring 2010, New United Motor Manufacturing Inc., a successful joint venture between Toyota Motor Co. and General Motors Co, shut down its plant in Fremont, California. Over two decades NUMMI was a model manufacturing plant with high quality and productivity, exceptional worker’s satisfaction and attendance. What did NUMMI do to change the former GM’s dysfunctional disaster into best plant?
This report is going to examine a dramatic change conducted by NUMMI’s leadership. It will address three main reasons which made this change possible: • Creating a new production system • Developing a new management system • Reformation of corporate culture.
And finally, the recommendations will be identified that should have been implemented in order to run the plant efficiently another two or more decades.
Analysis of Situation
By 1982, GM’s Fremont plant, California, employed over 7,200 workers was shut down. At the time, the plant had terrible reputation of being the worst of GM’s plants known by its low productivity, the worst quality automobiles, from 5,000 to 7,000 filled grievances, over 20% of workers’ absenteeism, and even sabotage. Violation of the production and safety regulations, cycle time around with other errors were common for the plant. Meanwhile, another automobile giant, Toyota Motors, was facing with the necessity to produce vehicles in the United States.
New United Motor Manufacturing Inc. (NUMMI), a Toyota – General Motors joint venture, took place in 1984. Generally, both companies had tangible objectives, on one hand, GM’s targets were reopening Fremont plant and learning how to produce a small, profitable car; on the other hands, Toyota’s aim was with GM’s help to launch a production line in the United States. However, the main strategy of the joint venture was learning. And ultimately, NUMMI became a desirable chance for GM to learn Toyota’s Production System (TPS) and for Toyota – an opportunity to
In spring 2010, New United Motor Manufacturing Inc., a successful joint venture between Toyota Motor Co. and General Motors Co, shut down its plant in Fremont, California. Over two decades NUMMI was a model manufacturing plant with high quality and productivity, exceptional worker’s satisfaction and attendance. What did NUMMI do to change the former GM’s dysfunctional disaster into best plant?
This report is going to examine a dramatic change conducted by NUMMI’s leadership. It will address three main reasons which made this change possible: • Creating a new production system • Developing a new management system • Reformation of corporate culture.
And finally, the recommendations will be identified that should have been implemented in order to run the plant efficiently another two or more decades.
Analysis of Situation
By 1982, GM’s Fremont plant, California, employed over 7,200 workers was shut down. At the time, the plant had terrible reputation of being the worst of GM’s plants known by its low productivity, the worst quality automobiles, from 5,000 to 7,000 filled grievances, over 20% of workers’ absenteeism, and even sabotage. Violation of the production and safety regulations, cycle time around with other errors were common for the plant. Meanwhile, another automobile giant, Toyota Motors, was facing with the necessity to produce vehicles in the United States.
New United Motor Manufacturing Inc. (NUMMI), a Toyota – General Motors joint venture, took place in 1984. Generally, both companies had tangible objectives, on one hand, GM’s targets were reopening Fremont plant and learning how to produce a small, profitable car; on the other hands, Toyota’s aim was with GM’s help to launch a production line in the United States. However, the main strategy of the joint venture was learning. And ultimately, NUMMI became a desirable chance for GM to learn Toyota’s Production System (TPS) and for Toyota – an opportunity to
References: 1. John Shook. 2010. How to Change a Culture: Lessons From NUMMI. 2. John P. Kotter. 2002. The Heart of Change. 3. New United Motors Manufacturing, Inc. (NUMMI). Retrieved May 8, 2012 from: http://gsbapps.stanford.edu/cases/documents/HR11.pdf 4. Closing NUMMI Is Easy For Toyota. Retrieved May 8, 2012 from: http://www.forbes.com/2009/07/24/nummi-toyota-gm-markets-autos-hybrid.html 5. NUMMI Plant Closure Ends Toyota-GM Venture. Retrieved May 8, 2012 from: http://www.npr.org/templates/story/story.php?storyId=125430405 6. This American Life From WBEZ. Retrieved May 8, 2012 from: http://www.thisamericanlife.org/radio-archives/episode/403/transcript 7. Robert B. Austenfeld, Jr. NUMMI—The Great Experiment. Retrieved May 8, 2012 from: http://www.agileway.com.br/wp-content/uploads/2009/10/nummi-austenfeld-agileway.com.br.pdf