Some 16 high-ranking employees of General Motors (GM) were sent to NUMMI to learn lessons about Toyota’s success and why it was making more durable and affordable cars. The aim of this was to apply the lessons to GM plants across the country. Upon their return, they discovered that GM plants were embedded in a corrosive culture that was resistant to change.
To begin with, GM was not interested in the partnership mainly because of its pride and defensiveness. The GM workers were paid well even without putting in hard work (NUMMI, 2015). Thus, they liked the way things were in their plants and resisted any change that would alter the status quo.
At Toyota, there was a team-based approach while GM mostly valued hierarchical structures that put a few people at the apex of management. These managers wielded more powers, which they were unwilling to cede in place of Toyota’s horizontal integration. In addition, the teamwork approach pursued by Toyota was seen as an unfair and negative formula that would lead to victimizing underperformers at GM (NUMMI, 2015). Moreover, the stringent departmentalization at the GM ensured that ownership and interconnection between departments were lacking.
The Toyota system was seen by the GM managers as an unnecessary disruption of its operations. Despite the adoption of massive automation at NUMMI, GM particularly failed to manage its workforce effectively. The company’s executives put too much emphasis on labor costs at the expense of other expenses such as defective parts, overhead, and inventory. In addition, GM still had a combative relationship with its suppliers despite the partnership. It applied aggressive bargaining approaches to get the best deals from its suppliers rather than working in collaboration with them in a manner that both parties maximize their benefits. These factors combined deny it an opportunity to learn from Toyota’s best practices.
Reference
NUMMI (2015). Web.