Lean Enterprise

Chapter 1. Introduction

It’s possible for good people, in perversely designed systems, to casually perpetrate acts of great harm on strangers, sometimes without ever realizing it.

Ben Goldacre

On April 1, 2010, California’s only motor vehicle plant, New United Motor Manufacturing, Inc. (NUMMI), shut down. NUMMI, which opened in 1984, had been a joint venture between GM and Toyota. Both companies stood to benefit from the partnership. Toyota wanted to open a plant in the US to escape import restrictions threatened by the US Congress in reaction to the inexorably falling market share of US auto manufacturers. For GM, it was a chance to learn how to build small cars profitably and to study the Toyota Production System (TPS) that had enabled Japanese auto manufacturers to consistently deliver the highest quality in the industry at costs that undercut those of US manufacturers.¹

For the joint venture, GM chose the site of their shuttered Fremont Assembly plant. GM’s Fremont plant was one of their worst in terms of both the quality of the cars produced and the relationship between managers and workers. By the time the plant closed in 1982, labor relations had almost completely broken down, with workers drinking and gambling on the job. Incredibly, Toyota agreed to the demand of United Auto Workers’ negotiator Bruce Lee to rehire the union leaders from Fremont Assembly to lead the workforce at NUMMI. The workers were sent to Toyota City in Japan to learn the TPS. Within three months, ...