GM-Toyota venture in California breaks tradition, gets results
Burly auto worker Rick Madrid has 29 years of memories on the General Motors assembly line, and he remembers most of it as ''nuts, bolts, washers, and daydreams.'' They are memories of boredom and hard work interrupted frequently by labor and management disputes and finally by unemployment when the GM plant here closed in 1982.
But New United Motors Manufacturing Inc. (NUMMI) has taken over the hulking facility here at the south end of San Francisco Bay. The Toyota and GM venture - the first to match Japanese production technique with American labor - has changed Mr. Madrid's life, he says.
As the first NUMMI Chevy Nova came off the line this week, auto analysts said the venture may also change the face of the US auto industry and labor relations. The deal struck by the two largest car companies in each nation has Toyota manufacturing the subcompact car in GM's Fremont plant for GM distribution.
Tradition at all levels of the automotive business has been broken, and the results so far are viewed as positive.
''Today we're the briefcase brigade,'' Madrid says proudly of the rank-and-file auto workers at NUMMI. Everyone carries a briefcase because, in Japanese style, everyone is given the written specifications of a particular job as well as all the responsibilities for it. American auto industry style is to give such material only to managers. ''It used to be the supervisor was the supreme dictator. Now Mr. Toyoda (NUMMI chairman Tatsuro Toyoda) comes and sits next to me at lunch,'' says Madrid. He talks about arriving at work early and leaving late because he's proud of his job.
The Japanese way is to develop a familial atmosphere in which corporate hierarchy is not evident. There are no walled-in offices in the Fremont building , no separate executive cafeterias, no assigned parking stalls for the boss. Madrid and his fellow workers like it because, he says, ''upper management seems to care about us all the time, and not just when we make a mistake.''
''The accent here is not on production. The emphasis is on people, how they're treated and giving them respect,'' explains Tom Klipstine, NUMMI manager of community relations. Executives here treat the venture as an experiment, noting that car production here is starting from scratch, with no history of union disputes, poor work practices, or other problems.
The plant is expected to produce, at peak, 225,000 cars a year with a work force of 2,500. (GM previously employed more than twice that many here.) About 90 percent of the workers hired were United Automobile Workers members from the old plant. Without a union contract, Toyota management has worked closely with UAW representatives here, even seeking the union's help in employment matters. The Japanese firm is expected to sign a contract with them by April.
Auto industry analysts say the NUMMI plant will serve both GM and Toyota well. GM will be learning the Japanese production techniques expected to help the Detroit giant maintain its hold on the US auto market by bringing costs of production down. Meanwhile, Toyota gets a chance to bypass import quotas by producing cars in this country, learn the intricacies of the American market with the help of an American company, and break barriers with an organized labor force that has long seen the competitive Japanese car as a major reason the auto industry here has faltered. (Though the Federal Trade Commission has approved the joint venture, Chrysler is suing the company on antitrust arguments.)
''This is a riskless venture for Toyota. They charge the cost plus profit to Chevrolet, and even if the cost is raised it's GM's problem,'' explains Harvey Heinbach, security analyst with Merrill Lynch. ''It gives them the opportunity to work with an American work force and union. Later they can come and do it alone.''
Nissan and Honda already have nonunion US plants and ''Toyota quite desperately needed to be involved in the US,'' explains Dave Cole, director of the office for Study of Automotive Transportation of the University of Michigan. The fastest way, he says, was to get an American partner.
The importance of the NUMMI project, Mr. Cole explains, is that it makes the Japanese production system more readily transferable to all other US owned plants. Further, he says, it is the first Japanese plant to begin in the US with cooperative relationships with the UAW.
Union officials, trying to keep a grip on a changing market, look to NUMMI as a chance to move into more flexible dealings with management. Already UAW members here are working without the traditional job classifications mandated by old labor contracts. Workers are not confined to doing a single task, for example.
''There's no question in my mind the company was very apprehensive (about the union),'' says Joel Smith, local UAW leader, who notes that the old GM operation here had a history of bitter union disputes. But he says he is convinced that the UAW is considered the third partner in the operation here.