Assume you are the director of industrial relations for GMFC. The company and the union have failed to agree on a new contract, and the old contract expired last week. Two issues are unresolved, and no movement has been made on these for more than 10 days. The union is demanding 10 cents an hour more than the company is willing to offer, and management continues to demand some employee co-payments for medical care. This is the first negotiation in 15 years in which a new contract has not been ratified before the old one expired.

Local 384 voted a strike authorization about a month ago, but the leaders have not indicated at this point whether they intend to strike. Production managers are lobbying for a lockout to avoid material losses if the heated steel treating process must be shut down rapidly. Marketing managers want production maintained to meet orders scheduled for shipment. They argue the union doesn't intend to strike because it hasn't already done so. In the executive council meeting this morning, financial officers briefed the top executives of GMFC and indicated the company could accept a labor cost increase of 5 cents an hour more, but only if this is a firm figure and not subject to increases over the term of the contract. Unfortunately, the union appeared adamant that it would not agree to any heath care co-payment.

For this assignment, your role is director of labor relations for the company. You have been asked to recommend a strategy for the company given the impasse in negotiations.

In your analysis, you must explain the strategy, including specific actions, that you recommend the company take and why your strategy and actions should be implemented. Consider the possibility that your strategy may trigger a strike or other union activity. You should also consider the actions/reactions that the other party may take and how you would deal with those actions/reactions.

Additional information:

Simply answering the questions which are part of the case is not enough; consider the questions to be clues to the important concepts and facts. You are strongly encouraged to use the following outline so that your analysis is organized appropriately:

1. Identify both the key issues and the underlying issues. In identifying the issues, you should be able to connect them to the business principles, which apply to this situation.

2. Discuss the facts, which affect these issues. The case may have too much information. In your discussion, you should filter the information and discuss those facts, which are pertinent to the issues identified above.

3. Discuss your tentative solution to the problem and how you would implement your solution. What actions would you propose to correct the situation, based on the knowledge you have gained in this course? Be sure to support your recommendation by citing references in the text and in the supplementary readings. You should also draw on other references such as business periodicals and relevant journals.  Remember that an ANALYSIS is more than simply a SUMMARY of the Case Study.

4. Discuss follow-up and contingency plans. How will the organization know that your proposed solution is working? What should they do if it does not work?