Posted by: BayAreaComRE | April 7, 2010

The NUMMI Auto Plant, Fremont, California – Rise & Fall

In another harrowing tale of the United States automotive industry, the New United Motors Manufacturing Inc. (NUMMI) auto plant in Fremont, California stopped its assembly line and shuttered its doors for the final time on March 31st. The 5.3 million square foot facility was originally built as a General Motors plant and was subsequently shut down in 1982 due to issues with unions and the reliability of the cars that rolled off the assembly line. The plant was re-opened in 1984 under a new guise however. By the late 1950’s, it was apparent that Japanese automakers were beginning to win U.S. market-share. In a monumental deal, Toyota and GM came together to form a joint venture, known as NUMMI. It was seen as a way for GM to learn the “lean” Japanese manufacturing technique, and also an opportunity for Toyota to dip its toe right into the U.S. market.

On paper, the idea looked great. However Japanese manufacturers and assembly line employees worked in tandem, in Japan. In the U.S. it was a different story. The highly controversial United Autoworkers Union and General Motors were often at odds with each other, especially at the Fremont plant. Grievances were filled daily against managers, absenteeism was high, and the tenured nature of employment at the plant gave way to laziness in production and even alcoholism on the line. Over the years NUMMI taught the United States one crucial lesson – its time at the top of the industry was long gone, and it was only a matter of time before we realized that the Japanese methods and execution far superceeded that of U.S. companies.

As of today, NUMMI is closed, Toyota’s contract at the plant has expired, GM is still under bankruptcy protection and it was reported today that it lost $4.3 Billion in July to December of 2009 “as it struggled to emerge from bankruptcy protection, repay government loans and cope with a severe downturn in U.S. sales” according to the AP.

The entire story has been captured, quite brilliantly, by the team from This American Life produced by Chicago Public Radio and syndicated by National Public Radio. In the 60 minute exposé, you can see why GM’s inability to adopt the lessons that Toyota taught at NUMMI eventually led to the plant’s demise. It’s truly worth a listen, click here to navigate to the podcast.

GM’s fate is still a tragedy in the making, or maybe a Cinderella story, who really knows? Locally, it’s more important to look at what will happen to the site that formerly housed NUMMI. According to multiple developers, “the site is considered as close to perfect as a developer can find in the Bay Area” and also “a once-in-a-lifetime opportunity.” Multiple concepts have been proposed, none more compelling than a mixed use R&D development site with a contiguous ballpark for the Oakland Athletics. Several companies have shown serious interest in the site including Aurica Motors who announced on March 11th that it was talking directly with NUMMI about the feasibility of housing its production line there. Several hurdles remain including an additional $1 Billion in financing and an overhaul of the plant to house electric car production. It would likely be 2 years before an electric car could ever make it off the assembly line were construction on the plant begin today.

6,700 jobs, at the plant or related to the plant, will be lost due to the closing, jobs that likely will never be replaced in the Bay Area unless another major auto manufacturer steps in. These workers will enter a new chapter of their lives, and hopefully have learned from the experience along with GM, Toyota, Fremont and UAW. We’ll continue to track any developments that occur at the site.

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Responses

  1. […] to cede our leadership in the global economy.” He also talked about the closure of NUMMI (we covered this a few months back), and how Tesla and Toyata are both reviving the plant with new projects set to bring thousands of […]


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