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By Root 1024 0

—advantage that distinguishes it from most other mainstream companies and has helped make it one of the best manufacturing companies in the world: Toyota believes in people’s willingness to do a good job and to learn. As a result, the company organizes its managerial practices around the assumption that standard procedures convey the best known way to perform a task—but the people on the frontlines know better what works. So they are constantly encouraged to question and improve these procedures. Toyota’s people, in other words, are given efficient ways to perform their assigned tasks, but are not told to stick to them if they discover a method that works better. And rather than employ the traditional tools of corporate control, Toyota provides its people with tools to monitor themselves. This allows them to see for themselves whether current procedures are still efficient or need to be improved. This is dramatically different from the experience of people in most mainstream companies. No wonder Toyota has never endured labor strife in the United States.

Indeed, despite numerous attempts to organize Toyota’s plants, the unions have never attracted enough support. More dramatically, at its first U.S. plant—NUMMI (New United Motor Manfacturing, Inc.), built at a former General Motors truck plant in Fremont, California, Toyota did inherit the United Auto Workers, and with it a rather rough labor history to boot.8 GM had closed the plant several years earlier and no wonder: One depressingly typical year had featured four thousand grievances, 20 percent absenteeism, and wildcat strikes. It was there that GM offered Toyota the chance to build its first American plant, which was to be jointly owned but run solely by Toyota. To the surprise of GM’s management, the plant became the most productive auto-manufacturing facility in the United States within just a few years, inundating the market with high-quality, affordable Geo-model cars. But what’s more, labor relations were exemplary at NUMMI under Toyota’s control.

Kiyoshi (Nate) Furuta, who negotiated at NUMMI with UAW president Dick Shoemaker, described the gap Toyota wanted to close:

Once they [the UAW] agree to a production standard they cannot change it. If management wants to change it, there is a struggle. That is a very rigid system. When we develop the original standard work, we want the team member involved. We then want the team member involved in improving the standard. We need multiskilled and not single-skilled workers. We say we do not need so many job classifications—too many… 9

And Furuta succeeded spectacularly. Although sales were 30 percent below target the first year, NUMMI management kept the entire workforce—there were no layoffs, which would have been routine in the past. Instead, they developed a major training program, launched team members’ workshops to improve standards, and provided extra vacation days. The trust NUMMI management had developed with the union allowed them to agree to the most liberal contract the UAW ever signed, including just two job classifications, the ability to move workers around based on capability rather than seniority, and even the right to use temporary workers.

Not surprisingly, GM’s management started to fly in planeloads of executives to the plant to discover what magical management tools Toyota had employed to pacify the facility and make it so productive. And they did try to apply what they learned back in Detroit. But according to NUMMI’s former CEO, they didn’t get it, even after spending days at a time at the plant trying to uncover its secrets.10 It wasn’t the management tools that they couldn’t comprehend; it was Toyota’s assumption that people were willing to do a good job and to learn, if only they were allowed to. The “magic” could not be found in any particular manufacturing technique or procedure. It lay in the freedom of Toyota’s people to continuously improve the procedures with which they began. GM copied the procedures but left out the freedom, and instead focused on trying to enforce strict adherence