Toyota’s Dilemma over NUMMI

Toyota says it may shut Fremont’s NUMMI auto plant – San Jose Mercury News

Part of the aftermath of GM’s implosion is that Toyota is left holding the bag on the NUMMI joint venture. The plant primarily built vehicles for GM (the Pontiac Vibe), but was essentially managed by Toyota as a Toyota operation. A lot has been written about GM’s failure to truly learn from this opportunity, but that is now in the past.

What is in the present, and the future, is the fate of the plant itself. Toyota does not need this factory. And if Toyota were being run the way U.S. automakers are, there wouldn’t have been a decision. As soon as GM backed out, the layoff notices would have been issued, and the gates locked. Period. Politically, that probably would have been the best move for Toyota. Let GM make the decision, and reluctantly go along. They had a great opportunity to do that last week when the press was preoccupied with the death of a high-profile celebrity.

But they didn’t do that. Enough time has passed that the plant is now 100% associated with Toyota. (Remember, in our 24/7 news cycle, a week or two is an eternity.)

So now they are stuck. The fate of this plant is Toyota’s and Toyota’s alone.

Here is a thought.

GM is not the only auto manufacturer with something to learn from Toyota, and almost anyone could (if they set about doing it right) learn more than GM ever did. Maybe someone can step up and seize what is, in my mind, a golden opportunity.

2 Replies to “Toyota’s Dilemma over NUMMI”

  1. I think if I was Toyota I would not decide to keep this plant open. It is a difficult decision but I think moving anything produced there to the other plants would make more sense.

    I would try and help employees and suppliers move to other Toyota USA plants. But it could be a difficult call, and don’t have anywhere near enough info on all the details. But with my limited understanding that is where I would lean.

  2. It would have been a PR disaster for Toyota had they come out with a decision to close another assembly plant IN AMERICA in the week JUST BEFORE THE 4TH OF JULY. America was gearing up for a birthday celebration — that kind of party-pooping bad news is not one that the natives would have appreciated knowing or hearing about over THAT weekend.

    I don’t agree that the fate of NUMMI is solely in Toyota’s hands now. If anything, I’d say GM’s failure sealed the plant’s future, or should I say, “non-future”. This was a partnership and I’m surprised that Toyota is even considering making a go of it alone considering the “baggage” that its partner left it. Even NUMMI has come out with its own statement saying that neither its labor costs nor business conditions are competitive.

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