GM-Toyota assembly plant in California sets a standard for auto management Japanese style helps revive a failed factory

September 05, 1993|By Kim Clark | Kim Clark,Staff Writer

FREMONT, Calif. -- Back in the 1970s, the General Motors Corp. assembly plant here was no ordinary American factory. It was far worse.

Managers viewed employees as ignorant inferiors, rebuffed suggestions as back talk and even denied simple favors, like the use of office bathrooms.

The workers fought back -- skipping an average of one day of work a week, calling wildcat strikes and slapping together one of the worst-built cars on the market, the Oldsmobile Cutlass.

Today, with most of the same workers, the Fremont auto plant is one of the most efficient and peaceful in America. And it makes some of the most reliable cars in the world, the Toyota Corolla and Geo Prizm.

Workers have been given job security, cross-training and power to design their workstations. Managers put into action about 80 percent of the thousands of suggestions the workers send in annually.

"We used to say, 'Just lick 'em and stick 'em,' " Willie Anderson, a 17-year veteran, recalls of the Fremont plant's haphazard assembly line. "We're doing the right things now."

In fact, as the nation prepares to celebrate Labor Day, the Fremont plant is being touted by the Clinton administration as the right model for all American workplaces.

Labor Secretary Robert B. Reich recently called on U.S. companies and workers to adopt strategies proved at New United Motor Manufacturing Inc., this 9-year-old joint venture of GM and Toyota Motor Co.

Workplaces like NUMMI, featuring "high-performance production practices and progressive human resources policies . . . are vital to America's prosperity," Mr. Reich said.

NUMMI's path isn't easy to follow, as shown by the failure of many similar efforts. As a result, many U.S. workers and managers remain skeptical about transplanting this Japanese system.

Still, the turnaround here serves as a manual for managers of all sorts -- from those at the Mack Trucks Inc. engine plant in Hagerstown to administrators at the University of Maryland's College Park campus -- who are trying to reform their workplaces to boost productivity and service.

NUMMI's success was made possible by the Cutlass plant's failure in 1982. Employees were unprepared for the shutdown. A few committed suicide. Many more were destroyed financially; some lost their homes and set up tents in the plant's parking lot.

The desperation created by the shutdown made managers and assembly-line workers willing to experiment with a new kind of workplace.

In 1983, GM, which was losing sales to Japanese imports, agreed to set up an experimental joint venture with Toyota. GM provided the shuttered Fremont plant; Toyota put up $100 million and most of the operation's top executives. And the United Auto Workers union, eager to have its members rehired, agreed to scrap its inflexible work rules.

By the time the first Chevy Nova rolled off the assembly line on Dec. 10, 1984, NUMMI boasted a unique structure:

* Related assembly-line jobs were formed into teams of five or six workers, each directed by a leader chosen from their ranks. Teams received small budgets to buy supplies, like standing mats, without bothering supervisors. And each team member changes jobs every 2 1/2 hours to reduce boredom and strain.

* To create an egalitarian atmosphere, perks were stripped from managers. For example, in one vast office full of open desks sits everyone from the plant manager down to clerks.

* And perhaps most important of all, the joint venture promised, in writing, that it would take extraordinary measures to prevent layoffs. If work slacked off, the company promised it would stop sending work out to contractors, and instead would cut the pay of managers and ask for voluntary work-force reductions.

The goal, said Michael Damer, a spokesman for NUMMI, was to provide workers with "financial needs and emotional needs, their need to participate in the company and own their jobs, and their need for security. If they are confident they won't lose their job, they can bring forth ideas" that might otherwise cost them or their friends work.

"A person is not going to think himself out of a job," he added.

That philosophy changed the atmosphere at the factory -- sometimes in unforeseen ways. To reduce alcohol and drug abuse -- especially the workers' habit of walking to girlie bars for a liquid lunch -- Toyota offered to pay workers for their lunch break if they stayed inside the factory. The move dried up the bars' business, forcing them to close.

But the first real test of the new management style came in 1988. Although the Nova had won rave reviews for its quality and value, sales weakened because of GM's worsening image. By 1988, production at Fremont had fallen to 110,000 Novas -- only 60 percent of capacity.

Despite the slack work, and the loss of nearly $100 million that year, NUMMI did not lay off a single worker. Instead, managers sent hundreds of otherwise idle workers to training classes to improve their skills.

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