You Can Lead a Horse... Even Horses...

Greg Gardner's article in the Detroit Free Press the other day had some hidden insight into why the NUMMI experiment did nothing for GM... and why Toyota opens its doors to tours by competitors.

Toyota's decision to close its 25-year-old California factory where UAW workers build Corolla cars and Tacoma pickups has delivered a seismic, Detroit-like jolt to the once-invincible Silicon Valley economy. The Japanese automaker's first plant closing in North America will add to California's swelling unemployment rolls, and perhaps, help the Golden State better empathize with the industry that it has persistently challenged with regulatory requirements.

I can personally attest to the "persistently challenged with regulatory requirements"... it's just plum crazy out here. Byzantine overtime requirements, tax structures, red tape... you name it. And they scratch their heads wondering why capital and knowledge and jobs are leaving. But that's a different topic.

Here's the meat:

Mark Hogan embodies what hundreds of General Motors Co. executives learned from the company's 25-year joint venture with Toyota: New United Motor Manufacturing Inc., known throughout the industry as NUMMI. "I went out as a finance guy. I came back much more conversant in manufacturing and what made Toyota successful," Hogan said. "We all were involved in hands-on decisions and spent part of every day on the floor. I even worked in the stamping shop. I came out a much better executive."

Those of us steeped in the culture of lean understand completely. Finance is just one support function to the core value-creation of the manufacturing process... not the other way around. And to truly understand the core you have to be out on the gemba every day. What a great opportunity for GM. So what went wrong?

GM's early NUMMI grads often encountered frustration as they tried to apply what they learned from Toyota back in the mothership, but most of them persisted. When Jack Smith, one of the joint venture's founders, became GM's chief executive in November 1992, the NUMMI prophets had a shepherd who supported them.

"A great deal of the learning from NUMMI ended up at Saturn," said David Cole, chairman of the Center for Automotive Research in Ann Arbor. "Ironically, the core of Saturn has gone away."

What a wasted opportunity. You can lead a horse to water, even many horses, and they may learn very well... but those horses still have to battle the herd. Ok enough of the completely busted metaphor.

Create great manufacturing and the rewards will come. Focus on finance and marketing identical cars as different while considering manufacturing and factory knowledge workers as a cost and... well we all know what happened.

Finally, just for kicks, take a quick skim though some of the 300+ comments on the article. One of my favorites:

We showed Toyota and drove them out of US-based plant.

Yeah, keep on thinking that. Detroit still has a long, long ways to go.

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