NUMMI changed the way management is done in the US. This is how.
In 1982 General Motors was forced to shut down the Fremont California plant. It was widely accepted that Fremont was the worst auto factory in the world. Commenting on the employees at Fremont, Bruce Lee, not the martial artist but the manger for the western region for United Auto said, “It was considered the worst workforce in the automobile industry in the United States.”
But, on Dec. 10th, 1984, Toyota had renamed the plant New United Motor Manufacturing Inc. or NUMMI, and began making Chevy Novas. But many were skeptical about the success of the new plant. Most of that skepticism came from part of the agreement GM had made with UAW. The part in question was that NUMMI had to hire 80% of laid off employees from the original plant. These were the same people who were, “the worst workforce in the automobile industry.”
Rumors of on the job antics including prostitutions, drinking, drug use and purposeful sabotage of the vehicles at the Fremont plant were admitted by many of those who performed the acts themselves. Prior to the 1982 shut down, the plant resembled more of a brothel/bar combination than a workplace. But, GM had one rule that was always obeyed. That rule was, the line doesn’t stop. As chassis rolled into workers areas on the never stopping line, workers had to assemble it as it went. Henry Ford had pioneered the assembly line and GM wasn’t about to stop the process that had been working for almost a century.
The Price of Stopping
The rumor was that it costs $15,000/minute to stop the line. So the culture of Fremont was one of, drinking on the job, prostitution in the parking lot, drug use at work, but never, ever stop the line. If an employee had a problem installing their given piece of the car, that employee would mark the car and let it continue down the line. Often the repair would not be made until the car was fully assembled.
This was the mindset and culture of the workers Toyota had agreed to re-hire. The question on everyones mind was how could they turn this around? The answer was with kindness, in the from of fixture in Toyota plants called andon chords, and a completely different management style.
In the book Smarter Faster Better, Charles Duhigg tells story of Rick Madrid, an employee of Fremont and NUMMI who had travelled to Japan to see what Toyota manufacturing looked like. He watched a worker struggle with a bolt. Rather than continue, the worker pulled an andon cord. The entire line stopped at the end of the station. As it did, the mans direct leaders took orders from him, handing him tools and assisting him with the bolt. Once the bolt was fixed the man pulled the cord and work resumed.
Madrid said of the event, “I just couldn’t believe it. Back home I had watched a guy fall in the pit, and they didn’t stop the line.” In Jan 1985, a month after the opening of the plant, Tetsuro Toyota, the newly appointed president of the plant, was observing the assembly lines. Duhigg explains that Toyota watched an employee struggle with a particular tail light installation. As the man struggled Toyota approached him, read the name on his uniform and said, “Joe, please pull the cord.”
“I can fix this sir.” Joe said. Toyota repeated himself, “Joe, please pull the cord.” Eventually Toyota guided Joe’s hand to the andon cord and they pulled it together, stopping the line. Joe, overcoming his fear, fixed the tail light. Toyota bowed to Joe afterwards and said, “Joe, please forgive me. I have done a poor job of instructing your managers of the importance of helping you pull the cord when there is a problem. You are the most important part of this plant. Only you can make every car great. I promise I will do everything in my power to never fail you again.”
From Last to First
This simple cord and kind gesture from Toyota instantly put the management and the workers at NUMMI on the same side rather than at each others throats. by 1986 their productivity was higher than any other GM plant and double what it had done when it was GM Fremont. It happened with essentially the same work force and in about one year. The main difference was that workers were not judged for stopping the line, and management was kind enough to help.
This is the opposite of how people like Democritus, Rick Barry, and Harry Markopolos tried to influence society. They were missing the kindness and generosity they needed to make the type of change NUMMI made to the American workforce landscape.