Quality Magazine

G.M. and Toyota's Joint Venture Ends in CA

April 6, 2010

A grand experiment in collaborative auto manufacturing that began a quarter-century ago has ended. The final Toyota Corolla left the New United Motor Manufacturing plant (Nummi)  in Fremont, CA., where General Motors and Toyota had engaged in a joint venture. G.M. ceased production at the plant last year, when the automaker was restructured. The closing eliminated about 4,700 jobs.

“I was told Nummi team members gave their all in making vehicles, up to that last Corolla, and stayed on even after production stopped to maintain equipment,” said Akio Toyoda, president of Toyota, in a statement. “I am truly moved by the spirit of manufacturing that they have shown.”

The Nummi partnership was meant to benefit G.M. and Toyota, and to a certain extent it did. G.M. was able to study the assembly techniques that helped Toyota gain a worldwide reputation for quality, and Toyota gained insights regarding management and labor relations in American auto plants.

Perhaps because of its deeply ingrained corporate culture and its labor relation problems, G.M. was never able to take full advantage of what it learned in Fremont, although the company undoubtedly came away better equipped to compete with its former partner. Toyota, on the other hand, would appear to have benefited greatly, as it later opened productive manufacturing plants elsewhere in North America.

According to Reuters, Toyota says it has committed $250 million to finance transitional support for the plant’s workers. But that’s little consolation to California residents, who have seen the state lose nearly 20 percent of its manufacturing jobs over the last five years. California officials had pressured Toyota to keep the plant open. While thousands of jobs have been lost in Fremont, Nummi suppliers throughout the state have reportedly been forced to idle workers as well.

Many Nummi employees were members of the United Auto Workers, unlike the labor force at Toyota’s other United States plants. The U.A.W. presence was a result of the partnership with G.M., which has binding agreements with the labor union.

Before the closing, the U.A.W. and Toyota reached an agreement in regard to severance payments for plant workers. The minimum amount each union worker received was in excess of $20,000. The union has also taken steps to provide retraining for former Nummi employees.