View Full Version : Steering toward success: Fremont's NUMMI plant

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01-05-2005, 05:15 PM
<b>Steering toward success<br>Despite its challenges, 2004 was a good year for Nummi</b><p>After setting a record in 2003, production slowed slightly at Fremont's Nummi auto plant last year.<p>New United Motor Manufacturing Inc. cranked out about 380,674 cars and trucks in 2004, down 4 percent from the previous year but still the second- highest total in the plant's 21-year-history.<p>Spokeswoman Rhonda Rigenhagen said production dipped last year because it had to shut down production for two weeks last summer while it geared up to build a new version of its popular Toyota Tacoma pickup truck. Nummi modified its assembly line and retrained thousands of workers to produce the new model.<p>"It represented a big challenge," Rigenhagen said. "It was the most complex model launch that Nummi has had in its history." The 2005 model was recently named truck of the year by Motor Trend magazine. It was also dubbed Automobile Magazine's "All-Star Pickup" for the year.<p>Rigenhagen said employment at the plant is stable at about 5,700 workers. Nummi's four-year labor agreement with the United Auto Workers is scheduled to expire Aug. 6. Nummi and the union have generally enjoyed quiet labor relations. Nummi has never had a strike or laid off employees, though union workers held a one-minute work stoppage during contract talks in 1993. A union representative did not return calls seeking comment.<p>Union workers at the plant receive between $20 and $32 in hourly pay, on par with wages at other union auto plants around the country, said Rigenhagen.<p>Nummi, jointly owned by General Motors and Toyota since 1984, also produces the Toyota Corolla compact sedan and the Pontiac Vibe sports wagon. Each automaker owns 50 percent of the plant, though it produces far more trucks and cars for Toyota than for GM.<p>In February, Nummi halted production of the Toyota Voltz sports wagon, a clone of the Pontiac Vibe built for export to Japan. Toyota canceled the model after reporting disappointing sales.<p>Although union salaries at Nummi are comparable with other U.S. plants', Rigenhagen said the plant faces significantly higher costs for other expenses than plants in the South and Midwest, such as for land, insurance, utilities and benefits. Overall, Nummi estimates its costs are 30 percent higher than other U.S. plants. "We have a challenge to be as cost-effective and competitive as possible in order to continue to operate in California," Rigenhagen said.<p>So far, Nummi has been able to offset much of the cost by becoming more efficient. In 2003, Harbour Consulting in Troy, Mich., rated Nummi as more efficient than any other auto company. It has also earned a reputation for consistent high-quality production.<p>"Nummi remains one of the most competitive auto assembly plants in North America," said Harley Shaiken, a UC Berkeley professor who has studied labor issues and followed Nummi for years. "As a result, Nummi remains very competitive with other plants in the U.S. or Canada."<p>Shaiken said Nummi's plan is more efficient than others because it has a good labor relations, a well-designed product and a well-organized plant.<p>"It's not that they plunked a huge capital investment into the plant, and we are seeing the fruits of new technology," Shaiken said. "They have forged a good union-management relationship and have a workforce that is very skilled."<p>But Rigenhagen said Harbour's efficiency rankings can be deceptive, because Harbour compares Nummi to large auto companies rather than standalone plants, which Nummi is.<p>While Nummi ranked well in 2003, she said its efficiency generally falls sharply whenever it introduces new models, such as it did last year. By contrast, the ratings for major auto companies are generally much more stable because they are constantly rolling out models at some of their plants. Harbour did not return calls seeking comment.<p>In addition, Toyota also launched production last month of the Toyota Tacoma at a second plant in Baja California, Mexico, which could make Nummi's production vulnerable to a downturn.<p>That's not an issue now, because demand for Tacomas has been rabid. "We're still operating at maximum capacity," Rigenhagen said.<p>But if demand falters, Toyota will have to decide whether to cut truck production at Nummi or the new plant in Mexico.<p>Shaiken said a number of factors would influence the decision, "but there would be clear pressure on both facilities to retain the work and the jobs." <p><IMG SRC="http://www.sfgate.com/c/pictures/2005/01/04/bu_nummi01.jpg" BORDER="0"><br><IMG SRC="http://www.sfgate.com/c/pictures/2005/01/04/bu_nummi02.jpg" BORDER="0"><br><IMG SRC="http://www.sfgate.com/c/pictures/2005/01/04/bu_nummi04gr.jpg" BORDER="0"><p>Source: San Francisco Chronicle (www.sfgate.com)

01-05-2005, 06:14 PM
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