Knowledge Transfer: Toyota, NUMMI, and GM

Teaching Plan for HBS Case No. 625-003. New United Motors Manufacturing, Inc. (NUMMI) was a joint venture between Toyota and General Motors. It was an opportunity for GM to learn about the Toyota Production System, which was quite different from the mass production processes American automakers used at the time. It was also an opportunity for Toyota to learn how to do business in the U.S. GM contributed its shuttered Fremont Assembly plant, and Toyota agreed to manage it. The plant had a tumultuous history, with numerous wildcat strikes and constant bickering between GM management and the United Autoworkers. The quality of vehicles produced there was the worst in GM. Costs were high, and many cars arrived at the end of the assembly line inoperable and had to be towed away for repairs. Toyota hired mostly former GM workers, including well-known plant militants and activists. It taught workers TPS, but more importantly it installed a culture that was the essential "software" that enabled TPS to work. Toyota transformed it to become the most productive auto assembly plant in the U.S., with quality comparable to its Japanese factories.
The case is based on interviews with key Toyota leaders who were involved in the transformation. It goes to the heart of the importance of organizational culture. The case issue is how should GM take the knowledge that it gained from embedding its employees at NUMMI and transfer it to other parts of its operations.