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Pam AM has a large aircraft maintenance center. In 2009, it signed a 3-year contract with its unionized mechanics that guaranteed both minimum wages and minimum hours per employee to all unionized mechanics. Sabre, Inc. is a firm that specializing in aircraft engine overhaul. Its price for an engine overhaul is less than what it costs Pam AM to do an overhaul themselves. Pam AM has begun discussions with Sabre, Inc. to outsource engine overhaul. The plan is to begin the relationship in 2012. If Sabre, Inc. is less expensive, why doesn't Pam Am begin outsourcing immediately?

 

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M966572

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