Here are 13 lessons I learned about business from how General Motors and Toyota worked together to rescue an auto manufacturing plant in. GM and Toyota launched their joint auto plant where GM's work force had been at its worst. Here's what happened next. i September I, THE GMATOYOTA JOINT VENTURE INTRODUCTION In February 19 83, General Motors Corporation and Toyota Motor Company of.
GM produced vehicles for customers who preferred smaller cars.
But GM cars were of poor quality, and many were money-losing ventures. Toyota produced quality vehicles. Needing someone to help acclimatize the growing company with potential American buyers, Toyota reached out to the GM group in Fremont, CA. There was a myriad of problems that would sink most companies quickly.
People would often not show up for work. Alcohol was often consumed while employees worked on the assembly line. Drugs and sexual promiscuity were rampant as well.
Employees felt free to do whatever they pleased at GM, due to the backing of union laws. Some vehicles came out of production with engines installed backward, missing steering wheels, missing brakes, and other issues.
Workers tried to fix the defected cars in the back yard of the plant. The agreement with the United Auto Workers union was yet to be signed. It was just a dream.
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It wanted to put an idle plant and work force back on line. On the other side of the fence, Toyota faced pressure to produce vehicles in the United States.
It was already trailing Honda Motor Co. Toyota could have just chosen to go it alone, which would have been quicker and simpler. What better way than to get started with an existing plant Fremontand with a partner helping it navigate unfamiliar waters?
Before I could help Toyota teach anything to GM or to anyone else, it had to teach me first. I worked on all the major processes of car assembly. The work force in those days had a horrible reputation, frequently going out on strike sometimes wildcat strikesfiling grievance after grievance and even sabotaging quality.
And, oh yes, the plant had produced some of the worst quality in the GM system.
The End Of The Line For GM-Toyota Joint Venture : NPR
Remember, this was the early s. Toyota had many concerns about transplanting perhaps the most important aspect of its production system — its way of cultivating employee involvement — into a workplace as poor as Fremont. Toyota wondered how workers with such a bad reputation could support it in building in quality. How would they support the concept and practice of teamwork?
The End Of The Line For GM-Toyota Joint Venture
Many problems did crop up, but they were ultimately overcome. All with the exact same workers, including the old troublemakers. The only thing that changed was the production and management system — and, somehow, the culture.
Toyota, even in Japan and contrary to popular myth, does not guarantee lifetime employment. No employer can credibly make such a guarantee. What an employer can do and what Toyota does is state that the last thing the company wants to do is lay off employees.
Only as a last resort will it turn to reducing the work force. Through such a policy, real trust can develop between the company and employees, along with the motivation for employees to accept responsibility and take ownership. Naturally, workers who had experienced layoffs in the past became nervous. Employee motivation comes from assuring membership in the organization, rather than from buying and selling time, whatever the price tag.
How to Change a Culture: Lessons From NUMMI
It made sense to the people at NUMMI to have production floor leaders participate in the process of hiring their own team members — giving them authority along with responsibility. But the senior HR managers in Japan were strongly against this idea.
Their plan seemed to be the right way to go. But when I spoke with the senior Japanese managers at Toyota, I realized the issue was much deeper than I first thought. It strikes to the very heart of the company-employee relationship. The company will stand behind each worker as an employee, to protect him from a frivolous boss.
The worker is hired by the company. He is an employee — citizen, even — of the company, not of the individual who happens to be his supervisor today. Employees need to feel secure in their relationship with the company. Everything in the plant was a fight, strikes all the time, and chaos constantly.
The journey of how NUMMI changed their assembly line is analogous for how to streamline your business processes as a whole across various industries. These are timeless principles at least most of themand the connections between NUMMI and business in general are profound. It was the last chance for GM to redeem their plant before it was too late.
How does that happen? They never stopped the line even when a manufacturing problem occurred. They literally said to their employees: Because of their processes negligence, they ended up with a lot full of flawed cars.
That was bad news for everyone involved: It radically changed and saved the Fremont plant, which lasted until Neither company wanted to rehire the same employees, but the hiring manager Bruce Leerehired most of them anyway.
Lee hired 85 percent of the employees from the failed plant because he thought the problem was the process, not the people. After they took 30 people to Japan to learn the Toyota system, they realized how true it is. Focus on who you hire and train employees well, because the process will follow the way the people work.
They could get in and out of the cars quicker, which made them percent quicker than the Americans that came over. They had a literal advantage, so how can you leverage your team to streamline your business processes? It might not be height, but think, How can I make my processes shorter? Learn how your people can become metaphorically shorter. Which new shortcuts can you take without cheating customers and quality? The Americans wanted to show the Japanese workers what they could do in the same timeframe as the Japanese were doing it.
But they were slow.