UPDATED: Toyota to Liquidate Stake in NUMMI. Shut Down?

Report: Toyota to liquidate its stake in Fremont’s NUMMI plant – San Jose Mercury News

Toyota has not confirmed, but reports say NUMMI will be over after a 25 year run.

Toyota Motor Corp. has decided it will dissolve its stake in the NUMMI auto factory it operated here with General Motors Corp., leaving union officials at the plant dismayed and disappointed. The Japanese car maker will begin negotiations next week about the liquidation of the venture and the timing of a shutdown of the New United Motor Manufacturing Inc. factory in Fremont, according to at least three published reports.

“People are worried about their jobs,” said Sergio Santos, president of United Auto Workers Local 2244, which represents UAW members at NUMMI. “Nobody can afford to lose their job fight now.”

About 4,700 people work at the NUMMI plant. GM and Toyota resurrected the plant after GM had permanently closed it in 1982.

I’m really sorry to hear the news… not completely unexpected, but still sad.

Thoughts?

There’s a link to dynamically generated news updates on the topic via Google.

One report says it could be closed by August.

UPDATE: This later story says the plant could continue building Toyota cars even if NUMMI, the venture, is dissolved. We’ll see.

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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5 Comments on "UPDATED: Toyota to Liquidate Stake in NUMMI. Shut Down?"

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  1. curiouscat says:

    I was thinking this would be the likely result. With my limited knowledge it seemed like the right answer. I trust Toyota to make the right decisions (not that they always will but overall I trust them). So whichever option they came to I would have figured was the correct one.

    This is a challenging situation but I think it would be a mistake to keep it open if it was not sustainable. Toyota was doing GM a favor. Since GM declined to take advantage of it and now GM dropped out Toyota ending their participation seems reasonable to me.

  2. MikeNZ says:

    Sadly a case of "friendly fire" in this global meltdown. It did seem inevitable when GM included them on their casualty list as part of the 'Old GM'.

    It is no consolation to the unfortunate employees of NUMMI but the experiment that they were involved in has been enormously helpful to those around the world working in a unionized environment. It demonstrated that with the right leadership and strategy, it was possible to engage even some of the most cynical employees in improvement efforts. It also emphasized how tough this stuff is too do in terms of effort by all involved. The 20yr old article you posted a while back Mark clearly showed that hard work was preferred to a disrespectful working environment where people were taken for granted.

    My thoughts are with those gallant employees who did there best to make this work. Jim Collins pointed out in 'Good to Great' that even when ventures like this stumble we cannot take away the proud record of improvement success they achieved over a long period.

    After all isn't 25 years a worthy legacy to acknowledge? In many companies this in itself would be considered a 'sustainable' change history. And the closure has more to do with dire circumstances outside the plant's control than anything they did.

  3. Mark Graban says:

    There's an updated link in the post, news reports now say there is a chance that Toyota might keep building cars there even if NUMMI, the entity, is dissolved. We have to wait and see I guess.

  4. Steve Harper says:

    Tesla? Anyone? They were lobbying for a site to build the Model S just down the freeway from NUMMI, but this seems like an huge opportunity for them: get a turnkey factory and learn from Toyota. Now, what would Toyota get out of that deal? Maybe some of the styling would rub off on them. Hmmm…perhaps the relationship would be too lop-sided.

  5. Anonymous says:

    With overcapacity everywhere it is hard to imagine the Fremont site being competitive.

    Some of the disadvantages Fremont has are:

    High cost of living
    Congested highway transportation
    Highly regulated state and locale environment
    Unionized workforce
    Limited affordable housing

    Without some sort of government intervention I think there are better options for Toyota.

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