On April 1, a remarkable story in automotive history will come to an end. Well, not the story itself – it’s too good – but the 26-year-old “experiment” that created it will be a thing of the past.
It all began in 1984, when General Motors and Toyota decided to scratch one another’s proverbial backs with a joint venture called New United Motor Manufacturing, Inc. (NUMMI). The primary motivation for Toyota was to get a foothold for manufacturing automobiles in the U.S. – mainly to stem the public outcry over U.S. auto jobs going to Japan. As for GM, they wanted to learn how to make high-quality small cars that were profitable – which the Japanese proved they could do. As a bonus, GM would also learn how to apply Toyota techniques in other plants throughout their operations.
From Worst to First
Most companies taking on that kind of venture would try it in a plant where they had a strong foundation to build on. Instead, they picked the worst plant in the GM system – in Fremont, California. It was so bad that GM had to shut it down completely two years earlier. Relations between labor and management were incessantly contentious and hostile. Some say they spent more time filing and fighting grievances than making automobiles. What’s more, the product quality was laughable. Cars wound up with the wrong bumpers, steering wheels missing, scratches and dents everywhere. Then they had another crew at the end of the line to repair all the defects.
So when NUMMI was announced, few people thought it would succeed. Not only did they reopen the problem plant – they hired back the same people, believing as Deming always said, problems aren’t about the people, but the system. Before they started operating, though, a sizeable contingent of workers went to Japan to learn the legendary “Toyota way,” working side-by-side with their Japanese “brothers.” It was a landmark event that transformed people’s lives.
You can learn about the details from many sources, including a recent story that ran on National Public Radio. But at the end of their time together in Japan, a lot of grizzled, hard-bitten workers were literally in tears during the celebration they held before heading back to launch the Fremont operation. They had been given something few of them had known before – a sense of pride and purpose – and the impact on employee engagement proved to be profound.
Marketing is More about What You Do than What You Say
When production started, results were meteoric. Almost immediately, quality and productivity reached levels that paralleled other Toyota plants. Everyone noticed … many cheered … but for reasons that are hard to believe yet easy to understand, little changed for many years elsewhere at the U.S. automaker – despite considerable effort from numerous people within GM. By the time quality became the rule rather than the exception throughout the company a few years ago, it was too late. Even aggressive marketing efforts that touted improved quality initially failed to convince potential customers – too many years of exaggerated claims and poor performance. Then just when GM started to recover, the economy collapsed, and they had to ask for bailout money to stay afloat.
Fremont is shutting down this week for two main reasons: GM pulled out of the venture in 2009, and Toyota decided it can handle U.S. production in other plants across the country. Although many are sad to see the plant close, its legacy continues. Perhaps the simplest and biggest lesson from NUMMI is that employee engagement and cooperative systems aren’t just nice things to have. They’re the cornerstone of business success – and the most compelling force for effective marketing a company can pursue.
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