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MSW065 : Effective Labour Management

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Question:

Portfolio Project Option 2: Strategic Action Recommendations

You are the vice president for human resources 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 to meet orders scheduled for shipment. They argue the union doesn’t intend to strike because it hasn’t already done so.

In the senior management meeting this morning, the CFO briefed the other members 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 increase over the term of the contract. Unfortunately, the union appeared adamant that it will not agree to any health care co-payment.

You have been tasked to recommend specific strategic actions to the senior management team in this impasse. Considering the evidence, what actions should the company take? Outline each specific action, including processes used and timetables. Consider the possibility that your strategic recommendations may trigger a lockout, strike, or other union activity.
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