The End of NUMMI

This week's episode of This American Life was an interesting peek inside the auto industry. It focused on the New United Motor Manufacturing Inc. (NUMMI) plant in Freemont, California. The plant is closing this week and is a fascinating tale of the last 25 years of the auto industry

They show starts out talking about the Freemont plant's history as the worst U.S. car plant. The tales of what went on there are astounding examples of the worst parts of Union workers and atrocious management. I don't want to spoil surprises...give it a listen.

The plant was shut down in 1982 and reopened a couple of years later with the same workers as a joint venture with GM and Toyota. It became the best U.S. plant very quickly, highest productivity, least number of defects. GM wanted to learn how to match Toyota's quality. Toyota was feeling the heat from Congress in the early 80's as import quotas were being discussed and wanted to learn to build cars in the U.S. to dodge thee potential quotas. Seemed like a good match.

GM's goal was to take what they learned and export it to other plants. Well, this is where things fell apart. Unions and management sabotaged the efforts repeatedly and the top brass at GM bumbled all along the process.

You can listen to this fascinating hour for free on their website.

My father was in the auto industry while I was growing up...he was a plant manager at a parts supplier (didn't work directly for the Big Three). He won a contract from GM for oil pumps in the 1980s and set up the assembly line. For a while, most GM oil pumps came from this small town in Iowa.

He was the head of management at a non-union plant. He was a Demming disciple (the total quality management guy). I was probably the only person at my high school that knew some of the principles of TQM because of him! TQM heavily influenced Japanese industry much more so than the U.S. at the time.

There were a couple of attempts to form a union but they were always voted down. He said at the time it was his goal to treat the workers well enough that they didn't need a union.

Fast forward 20 years. He left that plant in 1987. I was back for my 20th high school reunion in 2006. The company that owned the plant went bankrupt, that facility was sold to another company and is still in operation. I was talking to a few locals that I didn't know who asked if I was back for the reunion. I said yes and told them who I was. One of the men said he worked at the plant when my father managed it and that is was a great place to work. Not only that, he remembered a couple of things specifically.

He remembered my father doing magic tricks at employee meetings. He said he always felt like he understood the company, how it was doing in terms of profitability and that the workers were treated well. One year they had record profits and my father ordered a proof set of coins from the U.S. mint for every worker to commemorate they year. He said he still had those coins.

So what lessons do I take from all this? I am feeling glib so here goes: The need for Unions varies inversely with the commitment of corporate leaders to treat their workers fairly, provide a good work environment and provide fair wages and benefits.