Final answer:
Before the NUMMI partnership, the GM plant in Fremont faced significant internal failure costs due to defects found before products reached the customer. High levels of scrap, rework, and process failures were prevalent. The NUMMI partnership implemented Toyota's lean manufacturing processes and continuous improvement philosophy to address and reduce these costs.
Step-by-step explanation:
The category of quality-related costs that were most obvious at the GM plant in Fremont before the NUMMI partnership were the internal failure costs. These costs are associated with defects that are found before the product reaches the customer.
The GM Fremont plant, notorious for its poor working conditions and quality issues, experienced high levels of scrap, rework, and process failure leading to significant internal failure costs. After the establishment of the NUMMI partnership, which was a joint venture between General Motors and Toyota, there was a dramatic shift in culture and practices that led to a focus on quality improvement and workforce engagement, which eventually reduced these costs significantly by implementing Toyota's famed lean manufacturing processes and continuous improvement (kaizen) philosophy.