New United Motor Manufacturing Inc.
A Case Study
Nova Southeastern University
This report will discuss the human resources issues related to the Toyota Motor Corporation and General Motors Company joint venture of New United Motor Manufacturing Inc., based at the Freemont Assembly plant located in Freemont, California. The plant was formerly owned by GM, and was plagued with personnel problems. After closing the facility in 1982, GM joined Toyota in re-opening the plant, with the goal of building vehicles for both manufacturers. The decision was made to re-hire a majority of the troubled workers that had formerly worked at the plant. While management ...view middle of the document...
And it was a reputation that was well earned. Everything was a fight. They spent more time of grievances and on things like that than they did on producing cars. They had strikes all the time. It was just chaos constantly.” (Chicago Public Media, 2010) Some likened the workforce to people in prison, where sex, drug, and illegal gambling ran rampant. Absenteeism was a huge problem, resulting in management not being able to start up the production lines. Employees would intentionally sabotage the vehicles they were being paid to build: putting empty bottles in the door panels to annoy customers, deliberately scratching newly built vehicles, even not tightening bolts on the suspension. By 1982, GM was forced to close the Freemont Assembly, laying off thousands of workers.
In 1984, the announcement was made that GM would be partnering with Toyota to start producing vehicles again at the Freemont Assembly plant. The goal of the plant was for GM to build high-quality small cars, and for Toyota to create a presence in the United States, while teaching GM the Toyota philosophy. When NUMMI officially opened, over 85% of the original Freemont workforce was now employed in the new venture. (Bird, 2010) The “new” employees were sent to Japan to be trained by employees in a Tokyo plant.
The biggest hurdle at the NUMMI plant was not necessarily “how do we build vehicles?” It was “how do we get the workforce to build a quality vehicle?” It was quickly realized that the GM way was one of fear and intimidation, rather than teamwork. John Shook believes that the GM way of thinking was to “get the volume out, get the product out the door, and someone later will worry about the quality”. (Chicago Public Media, 2010) Workers were afraid to notify managers if there was a problem or a quality issue on the assembly line, as they felt they would be fired for stopping the line. The workers weren’t given the proper tools they needed to build vehicles. For GM and Toyota to build quality vehicles, they first had to tackle the problem of the plants workforce.
Causes of the Problem
Workers at the GM Freemont Assembly worked in fear: fear of retaliation by managers and supervisors, and fear of losing their jobs. The #1 rule of the Freemont plant was “never stop the line”. Former GM Manager Ernie Schaefer explains that the reasoning behind the rule was that management knew that the workers really didn’t want to work, that stopping the line to correct an issue would be giving the workers a free break. So, the solution was to not allow the workers to stop the line. The quality of the product didn’t matter, the quantity of the product mattered. Repairs could always be made later.
NUMMI management had three different options when looking to hire workers for the new venture. First, they could hire a completely new workforce, and train the how they wanted to. Second, they could hire the old workforce, and hope for change. And...