Assume you are director of industrial relations for GMFC. The company and the un
ID: 1216732 • Letter: A
Question
Assume you are 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. Asses the strategies that a company could take to resolve an impasse in negotiations with the union. 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. You should also consider the actions/reactions that the other party may take and how you would deal with those actions/reactions.Explanation / Answer
First of all we must look into the timing of the negotiations, We just cannot ignore the timing of such long term negotiations as they significantly impact weather or not we take some decision at all.
Let us consider that year as 2016 as you have asked me the question now,
Therre are massive lay off's everywhere and the economy is in serious trouble, This is the slump of the generation that lasted for a decade,
We must explain all these problems to workers very clearly, We must also explain workers how hard the companies executives struggled to keep workers jobs,
This will be most important strategy.
Second one would be to explain workers about medical insurance policies that have become extremely expensive due to obama care etc.
It is important to analyse the financial impact of both these decisions, If company accepts to pay 10 cents per hour more what is the financial impact on the company, If the impact is insignificant then we can go ahead with pay hike
It is also important to know what are the savings that happen if employees co-pay the insurance, If it is very high then we can go ahead with pay hike and they co-pay the insurance,
This way both will feel like winners, but in reality both did not win anything and status-quo continues which is very good for both players.