False Start in a Manufacturing Revolution: GM’s Early Struggles Adopting Lean Principles

In the 1980s, General Motors (GM), challenged by the efficiency of Japanese automakers, sought to adopt Toyota’s lean manufacturing principles.

To this end, GM and Toyota formed a joint venture in 1984, called New United Motor Manufacturing, Inc. (NUMMI). This collaboration provided GM with access to small car technology, while Toyota established its first North American manufacturing base in California’s Fremont Assembly plant, which was notorious for its problematic workforce. Bruce Lee, a former director of the United Auto Workers, described this workforce as the worst in the U.S. auto industry.

The NUMMI venture turned out to be a transformative experience, demonstrating the effectiveness of lean manufacturing principles. The plant saw remarkable improvements in efficiency and quality.

However, GM faced difficulties in replicating this success across its entire network. Each plant’s distinct culture and inertia posed significant challenges, with the issues being more cultural than technological.

Despite these challenges, GM continued its efforts through the 1990s and 2000s, investing in technology and training to incorporate lean principles. The bankruptcy in 2008 forced GM to intensify these efforts.

Since then, GM has adapted its lean practices to meet the demands of electric vehicle production, increased automation, and the complexities of the global supply chain. Today, lean principles are a core aspect of GM’s manufacturing philosophy, with the Environmental Protection Agency (EPA) recognizing GM as having one of the most extensive lean manufacturing initiatives in the U.S.