How the Old New GM Becomes the New Old GM

General Motors (GMGMQ) and the bankruptcy court overseeing its Chapter 11 proceedings are working to parse the giant carmaker’s assets into a “New GM” and an “Old GM” (although I still prefer the “Good GM/Bad GM” formulation). In an interesting turn of events for auto-manufacturing-process junkies, the NUMMI (New United Motor Manufacturing Inc.) plant that GM has jointly operated in California with Toyota has been relegated to “Old GM” status.

NUMMI was re-invented in the mid-1980s as a partnership between the General and its main Japanese competitor. The idea at the time was for GM to learn the “lean” manufacturing techniques that made up the famous “Toyota Way.” GM did learn them (too little, too late, even in the Reagan era, as it turns out), but according to its Chapter 11 spinmeisters, “GM believes it is in the best interest of the ‘New GM’ and its stakeholders that we place our ownership interest in NUMMI in 'Old GM’. We have enjoyed a very positive and beneficial partnership with Toyota for the past 25 years, and we remain open tofuture [sic] opportunities of mutual interest.”

At NUMMI, a vehicle like the Pontiac Vibe (essentially the same as the Toyota Matrix) was built alongside a best-seller like the Toyota Corolla. Pontiac has, of course, been junked, although the Vibe was generally regarded as one of GM’s better vehicles (even though, if given a choice, most consumers went with the Matrix instead). 

However, NUMMI also built the Geo Prizm, which, although a rebadged Toyota, was the kind of small-ish car that’s supposed to be in the New General’s future. In fact, NUMMI is exactly the kind of manufacturing facility that’s supposed to be in the New General’s future.

Unless it isn’t. The fact is that GM doesn’t currently have all that many small cars in its lineup. And if the New GM consists of Cadillac (big wheels), Buick (somewhat big wheels), GMC (more big wheels, but trucks), and Chevy (big wheels, by and large, but a few small wheels), the focus of small-car production—crucial to meeting the Obamastration’s green manufacturing goals—will be Chevy. Which, beyond the Aveo and the Cobalt, lacks small cars at the moment.

General Motors is spewing mixed signals about its future. Unlike Chrysler, which probably will be selling some small Fiats in the next few years (even if CEO Sergio Marchionne really just wants access to Chrysler dealerships to sell Alfa Romeos), GM may really want to drop small cars altogether, transforming itself into a luxury/performance/international/electrified carmaker. I think this makes more sense for the New General, but of course the company has to be politic about its destiny, given that it’s basically been nationalized.

At any rate, shedding NUMMI may be an early signal that this is in the works. GM has always hated small cars—the profit margins are slim, and the imports do them better, even when they're done in the U.S.A. The end of GM and NUMMI will bring sadness to GM fans, but then again, lean manufacturing and the General may have had their day. The NUMMI mythology had in many ways become an albatross around GM’s neck.