December 31, 2008 > Auto crisis reaches NUMMI
Auto crisis reaches NUMMI
By Mail El-Sadany
Photos By Courtesy of NUMMI
President Bush's recent announcement of an emergency bailout for General Motors (GM) and Chrysler seems to confirm that the current financial crisis has spread far and wide across a number of industries. In fact, automobile makers are struggling with vehicle sales at their lowest level in the past 25 years. The approved bailout plan pumps approximately $17.4 billion into GM and Chrysler setting a March 2009 deadline for long-term profitability plans.
However, the national automobile crisis is not constrained to bailout plans on Capitol Hill. The crisis implies serious changes for Fremont's New United Motors Manufacturing (NUMMI) plant as well. Established in 1984, NUMMI was created as a joint venture of General Motors and Toyota with the vision of "changing the automobile industry by way of introducing the Toyota Production system and a team-based working environment to the United States."
Today, NUMMI has grown to be a company of approximately 5,440 employees in a facility covering 5.3 million square feet located on Fremont Boulevard at I-880. NUMMI builds the Toyota Corolla, Toyota Tacoma, and Pontiac Vibe. In a representative year, NUMMI produces 250,000 cars and 170,000 trucks.
This past April, the company welcomed Kunihiko "Kent" Ogura as its newest president and chief executive officer. Ogura is NUMMI's seventh president and he brings decades of experience to the company with his career beginning with Toyota in 1979. With the impending financial crisis, Ogura and other NUMMI executives are facing a monumental challenge. Lance Tomasu, Assistant Manager of NUMMI Community Relations, describes the implications of the crisis on the Fremont plant and its workers:
"Until now, NUMMI has been able to produce two full production shifts on its Tacoma truck line. Due to the lack of sufficient demand however, only one shift of truck production will be supported beginning January of the upcoming year. Executives are in the process of determining how NUMMI will otherwise manage the change in volume. They will continue to closely follow market conditions to determine when the company should reinstate two full shifts of production."
Adjusting production cycles to conform to the decline in vehicle orders is a NUMMI strategy to manage the company in the midst of the current financial turmoil. Tomasu says that NUMMI will completely halt production for both car and truck shifts on 10 non-consecutive days throughout December and January. On these non-production days, NUMMI employees will be expected at work during their shifts. The focus of these days however, will be to provide activities that will enhance team member skill development as well as opportunities for training and making improvements to plant operations.
Further response by NUMMI to the changing automobile production environment will depend on developments in the industry. The executive team at NUMMI is being encouraged to "think outside the box" and develop innovative employee member training opportunities and plant development plans.