If ever there was a symbol of our times, it has to be NUMMI, the former Toyota-GM joint venture plant in Fremont, California. It was of course established in 1984 with a strong political agenda: Toyota wanted to be seen as a good American citizen that was prepared to work with the struggling domestic champion, GM. Alternatively, GM was desperate to learn from Toyota and to send a message back to autoworkers in Detroit that new working methods were critical to the long-term survival of the company.
In the event, notwithstanding the fine efforts of the workforce, the plant outlived its political and economic usefulness. Toyota became broadly accepted as a brand in the United States, while GM struggled to transfer the lessons learned in NUMMI to other parts of the business, ultimately handing over the plant in its entirety as the New GM was formed. Toyota could not make the business case work without the GM products, despite previous interest in producing the Prius at the plant. Interestingly, some of the Toyota production will be transferred to Ontario, Canada, that unlike neighbouring Michigan appears to have survived the harsh winds of recession.
notwithstanding the fine efforts of the workforce, the plant outlived its political and economic usefulness
The plant is also a symbol of the cost of rationalization. Toyota has already committed US$250m in “transition” support for the 5,400 workers. Beyond the gates of the factory, some studies have reportedly identified a further 20,000 or so jobs to be lost among suppliers in California along with significant losses to the local economic tax base. Toyota’s battered reputation in the United States will take another blow.
Yet, tantalizingly the NUMMI plant might also be a symbol of the future of the automotive industry, a born-again industry that is increasingly centred in places other than Detroit, in companies other than the traditional majors, and in technologies that speak to the contemporary agenda of zero emissions and small carbon footprints.
Aurica Motors, a part of the wider Aurica Labs R&D and “private think tank” company that specializes in long-term sustainable technologies, has apparently entered negotiations to take over the plant. It has formed an agreement with The Clean Tech Institute of Santa Clara, California to provide training for ex-NUMMI workers. It has also formed a partnership with Motive Industries of Calgary, Canada with a view to getting help industrializing their vehicle concept and other related products such as swappable battery packs.
It might be a long time until Aurica reaches the scale and stature of Toyota, but it is going to be interesting to see this company and many others try
This might just be a straw in the wind; another start-up hoping to leverage its way into a market selling US$50,000 electric vehicles. Yet this too is also a sign of the times. In the past, new entrants selling US$50,000 cars were almost certainly talking about high performance sports cars. Now the number of Aurica-type initiatives seems to be growing almost daily, and as electric vehicle infrastructures start being put into place so more will appear. It might be a long time until Aurica reaches the scale and stature of Toyota, but it is going to be interesting to see this company and many others try.
Dr Peter Wells is a Reader at Cardiff Business School, where he is a Co-Director of the Centre for Automotive Industry Research and leads the automotive industry research programme within BRASS, also in Cardiff University. Dr Wells is also a director of AutomotiveWorld.com’s sister website AWPresenter.com. He can be contacted on email@example.com.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.