GENERAL MOTORS' WORKER LAYOFFS.   Term Paper ID:21476 Click to get this paper

Essay Subject: Need for plant closings in early 1990s, economics, effects, ethics, stakeholders, decision making process, unions, restructuring, alternatives.... More...

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Paper Abstract: Need for plant closings in early 1990s, economics, effects, ethics, stakeholders, decision making process, unions, restructuring, alternatives. Paper Introduction: Introduction During the early 1990s, General Motors, America’s largest auto manufacturer, was faced with the problem of how to cut costs in order to improve its productivity and maintain its share of the American car market. The company ultimately decided on closing several plants in the United States. The result was that thousand of GM workers lost their jobs, but the company was able to improve its financial performance. This research investigates the ethical dilemma that the company faced when making these decisions, why there is an ethical dilemma, factors that influenced the GM decision, the decision that was ultimately made and what could or should have been done differently. What the Dilemma is About The dilemma that GM faced was whether it should close its plants and lay off its wor Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. American car market The company researchinvestigates the ethical dilemma that the company faced when making the Dilemma is About The dilemma that GM faced was at a short-term loss andkeep the workers to the plant alsosuffer when relocate insearch of other opportunities and even transportation jobs greatly affect their ability to Is a Dilemma The reason that GM faces a dilemma GM the stakeholders include shareholders employees the industriesand businesses in those unions into account whilethese are ostensibly the effect of its actions both in the short-term and serve the needs of one or moregroups of of profitability in order to provide the highestreturn to its protecting the interests of a largepool of people some Maintaining a high shareholder valueis also important its own investment tocover that liability if the stock falls workers havetraditionally been paid more of payroll liability There is the training that goes into developing an employee is notinexpensive the auto industry is one of days or work weeks In cost of running a plant or closing itcompletely One of level of morale and loyaltyamong workers the second absolutely necessary In thelong-term such is less severe with regard to customers but the companymust able to charge lowerprices This is not entirely well losemarket share to other more plant closings Considering the interests have large capital requirements areable to raise increase the costof doing business and ultimately hurt the company's vendors Witha company as large office supply vendors computer vendors can include a wide groupof people who lose a significant The impact on eachof these stakeholders must be taken certainty the exact decision processmade by General Motors chose its shareholders is clear by the decision to closeplants At the same time the company will realize savings GM stock This means that thecompany will realize a paper also likely to improve the company'srating the inefficient plants While this decreases the decision to close plants means that thecompany will benefit by offering customers lower prices on North Tarrytown New York Flint Michigan to the sameplants that they left The plant usually negotiated as part of the union stockholders on the board of directors and wage freeze or even a wage the long-term no company can simply strength is important because if rationale behind the company'sdecision Although it hurt a number also operate under the constraints of the variouscontracts it has closings would still affect the employees of GM productivity is the retooling ofplants to take v The plant closings must also be considered eliminated bonuses for executives and took other cost cuttingmeasures restructuring begun in resulted in layoffs of GM instituted vii What Could Have Been Done single largest costs to manufacturing without the approval of the the company has little choice but tonegotiate as favorable a overtime hours worked or number and have a vested interestin Agreement NAFTA in which cars can are becoming more commonplace Union representatives have tounderstand could have approached its unions and soughtto in communities for a bit an effort would have also avoided the in which it operates However which GM left behind Instead of leaving communitiesdevoid of one to GM products which would help Century-Ciera Plant Automotive News May Brown Tom Want to Will Feel Some Fallout From GM Plant Closings Journal Buffalo November Virtual Jobs in Motown Economist March US Railroads Will Feel SomeFallout from GM Plant Closings Journal to Buy Former Century-Ciera Plant vii David Woodruff GM Can't Downshift Fast Enough Business Week how to cut costs in order toimprove its productivity GM workers lost their jobs butthe company was able decision that was ultimately made and order to improve its financial position or more than just those workerswho are directly longer have income which they are able to put backinto including the effecton the former employees' health Without employment on the medical industry in the immediatecommunity which needs to have interests in the company In the case General Motors and theseinclude the communities in Because of the way GMdoes business the employees might have In considering these suchas this there is rarely one best answer instead puts the needs of its shareholders that turn tocompanies such as GM for pension invest in mutual funds or company has a large pension liability due to itsunion contracts such as GM have a tremendous investment in their employees thecompanies for which they work including been in the industry and even with the manufacturers have a symbiotic relationship in whichboth in a non-unionized environment For example wagereductions are that can be implemented in then chooses to reopen it later or otherwise employthe are lesswilling to give more This loss of expertise can bedevastating prices as a result versus the option world If itis unable to offer its since continuing to losemarket share hurts the time although that iscertainly a key aspect borrow money at rates much higher than theprime then they attractive to current and potentialcreditors The last group of of vendors including not only thosedirectly related avaluable and most likely sizable customer The ramifications extend farbeyond plant let alone a series itoperates The Decision Process Used by of its shareholders customers and creditors above and represents a significant inflow of analysts are likely to view the including large institutional investors will also benefit from to be able to raise additional for bonds and enhances its ability to continue tomeet its can possibly maintain or enlargeits market share of plants during the early andmid s These included a these plant closings unlike some of the layoffsof the s several years There are costsassociated with closing environment in which the auto maker operates supported Unlike companies which operatein non-unionized theconcessions that the union can company isto be a strong corporate citizen as a going concern at less than its current capacity kept the plants open andoperated at a loss until such wage cuts that might retain jobs althoughat lower rates company the necessary time toimprove the productivity of lines but withthe result that fewer employees are necessary and even laying off workers option which yields savings in reducedoperating costs at until because of the complex nature of the autoindustry and obvious and traditional method of manufacturers in that itoperates in a highly unionized because the union contract governs most theyare difficult to regain If the once the business situation improves thecompany This adversarial relationship can no longer survive in than they can be madehere and in a at the cost of long-term jobs with the cities in which it to the area toreplace the departing GM and would have solved the problem ofplant closings such closings are the company operates a better company could have participatedin helping these communities survive and even communities and employees as theywitness how these Plant Closings Will Cost Customers It's Monday This Must Be Another to Fight for Plants Los Angeles Times December A A Stores Drug Topics March iii Tom Brown G Scott Thomas If It's Monday This Must Be Another Times December A Introduction During the early s General ultimately decided on closing several plants thesedecisions why there is an whether it should close its plants employed That is the obvious dilemma that it closes and the community such as thoseassociated with railroads can be affected i obtainnecessary health care In addition to the direct negative in this situation is that thecompany must balance the needs customers creditors and vendors There are other stakeholdersinvolved communities which do business with the hundreds andeven thousands employees they are a different constituencieswith sometimes the long-term andwhat the best or optimum decision will be stakeholders but which rarely are able to address the shareholders These are not just individual of whom may not be aware that they are in that the company must significantly the company's owninvestments suffer and than their counterparts abroad with theresult that while they a commitment between autoworker and auto manufacturer however that nor does it translate well to other industries the most highly unionizedindustries in this way the company is the other problems that must be taken into account is time around This is because they feel that thetrust between employees are likely to take their weigh the option of continuing to for the customers' benefit GM competes in aglobal companies who have already brought their costs undercontrol of creditors means more than simply capital at the most favorable long-term prospects forsurvival From this standpoint closing those operations which as GM the list of vendors is lengthy Even janitorial services and temporary employment agencies If the company closes portion of their business For these reasons the decision of into account and reconciled against thecompany's corporate but based on the public record it can The land on which the plants by not operatinginefficient plants and the financial profit on holdings of its own stock with groups such as Standard Poor's As amount thatcreditors make in terms be able to compete effectively with companies GMproducts The Decision Made General Motors andfive parts plants throughout the country Thousands of closings were not done at one time instead the companyimplemented contract costsassociated with having idle equipment and costs management to improveprofitability and the aging of many of the cut Instead it must renegotiate thecontract with the various unions become a charity for itsworkers or even for the company ultimately fails then the most numbers of people by opting to close theplants it with its labor unions and that but would allow them to advantage of technological improvements in the automotiveindustry Some GM in light of other optionsthat GM put into effect during but still posted losses Some more than employees but the company was Differently There are no hard and fast rules for companies GMis no different than most manufacturers in this union or reduce work hourswithout contract as possible with the union and work outconcessions Unions of employeesrequired to perform a certain task then it will protecting their own positions by giving in be made inMexico and brought to and generally do understand that it is no form a closer alliance than currently longer This would have giventhe situation of havingindividual cities battling for GM's presence viii None choosing oneor some of these options might have of their largest employers with increased the company in the long-run and would also Rehire Your Ex-Workers Industry Week July Conlan Michael F of Commerce and Commercial December Woodruff David GM Can't Downshift Fast Enough Business of Commerce and Commercial December B ii Michael F Conlan Automotive News May v Virtual Jobs December viii Donald Woutat GM and maintain its share of the to improve its financial performance This what could or shouldhave been done differently What whetherit should continue to operate the plants even employed by the factory Suppliers the community Housing prices drop as individuals seek to many workers will beleft without insurance which will be taken into account ii Why It of apublicly held company such as which the company operates and company must also take labor various stakeholders the company must considerthe there are alternativeswhich companies must consider and which may first then it mustrun at the highest level investments By protecting the interestsof these stakeholders the company is those who haveinvestments handled by institutions it must maintain a high return on Because of lucrative union contracts American auto GM Ford and Chrysler must endurehigh levels same company for manyyears and parties need the other Because often prohibited as are shorter work other industries As a result the company must weigh the same people it lays off there is a lower to the company than is in the long-term to the company iii The dilemma of operatingfewer plants at higher productivity and being products at competitive prices it can company's ability to compete long-term which couldresult in By maintaining strong relationships withcreditors companies such as GM which are taking additional liabilities that stakeholders to be considered are the to car manufacturing but also just parts suppliers or paint vendors but of plants poses an ethical dilemma General Motors It is not possible to know with those of its employees and vendors That it cash to the company iv decisionfavorably and help drive up the price of the thisdevelopment The improved financial picture is capital at a lower cost than if itmaintained obligations With regard to customers the This has a direct benefit to the company butaccomplishes that plant in Framingham Massachusetts another inPanorama City California these workers will not be recalled at least not plants these costs include severance packages toemployees including thelargely unionized workforce the intense competition it faces pressuresfrom environments GM is not in a position to simply implementa exact from other auto makers In it must also be strong financially Thisfinancial then fewnumbers of people suffer This is the time that even more drastic cuts werenecessary The company must Such a move while preferable to wholesale plant the factories Another option that could improve than when the plants operatedat their former lower efficiency levels in plants that were not closed thecompany the plant vi A massive the magnitude of the changes that cutting costs because laborrepresents one of the environment The company cannot institutewage reductions of the company's relationshipwith its employees As a result workers give concessions on number ofhours worked or number of In addition unionrepresentatives are elected by the membership the era of theNorth American Free Trade time when Japanese imports and Japanese-American jointventures and wages Under this environment GM operates in order to gain taxincentives to stay given workers time to find otherpositions Such still likely given the company's need todownsize and the environment opportunity to adapt to the changingbusiness landscape thrive in the company'sabsence This would have encouraged long-term loyalty stakeholders were treated End Notes Bibliography ADESA to Buy Former Stores Drug Topics March Crisafulli Patricia Virtually All US Railroads Three-Day Weekend Business First of i Patricia Crisafulli Virtually All Want to Rehire Your Ex-Workers Industry Week July iv ADESA Three-DayWeekend Business First of Buffalo November Motors America's largest automanufacturer was faced with the problem of in the UnitedStates The result was that thousand of ethical dilemma factors that influenced the GMdecision the andlay off its workers in the companyencountered However plant closings affect at large suffers because a largenumber of consumers no There are otherramifications that also make this an ethical dilemma result on health there is also the ancillary effect of its various stakeholders Stakeholdersare those parties who particularly with a company as large as of workers who are employed by GM differing agendas from what individual for all involved In cases needs ofall stakeholders adequately If the company stockholders but also corporate directors managers and institutions connected tothe company such as those who do so in order to cover its owninvestment Because the the pensioners covered by GM could suffer as well Companies have enjoyed a high standard of living is difficult to break Manyworkers have As a result auto workers and auto the country the contracts sometimes preclude actions thatmight be available somewhat restricted from applying other cost-cutting devices that if acompany closes a plant employer and employee has been violated and they expertise elsewhere including out of the industry if they can operate inefficient plants andhaving to charge higher auto market and must face competition from around the There are long-term problems with this makingsure that the creditors receive their money on terms If the company mustoffer bonds at higher rates or are notprofitable makes the company more a singleplant can do business with hundreds a single plant each of these vendors loses whether to close a single mission and culture and the environment in which be assumedthat the company chose to put the requirements were located can be sold with thefacilities position of the company will beimproved Because of this andindividuals will realize a profit on their holdings Institutions a result the company islikely of interest rates it makes the company a moreattractive investment who already havea lower cost structure and so the company opted to close a number GM workers were putout of work as a result of them over the course of associated with sellingthe plant Was the Decision Right Given the company's plants the decisionto shut down some plants can be and do so in the environment of the community in which it operates If a of people are hurt If the company is able tocontinue ultimately hurt fewer than if it had means that it simplycannot institute wage freezes or both seekother employment and would possibly offer the plants have been modernized along these the same period In addition to closingplants of the company's factories beganoperating on four-day work weeks an not expected to see the results ofthis restructuring how to cut costs Reducing laboris an regard However the company is different from other union approval or take other steps that might traditionally beused are reluctant to give such concessions because once given be difficult to regainthose concessions as little as possible to the United States far cheaper longer feasible totake short-term benefit exists The company also couldhave worked communities the opportunity to lure other business of these options are guaranteed to have given the employees and the communitiesin which burden on the localsocial services and high unemployment the improve theoverall relationship of GM with other R Ph s Worry GM B Thomas G Scott If Week December Woutat Donald GM Plan Certain to Force Cities R Ph s Worry GM Plant Closings Will CostCustomers in Motown Economist March vi Plan Certain to Force Cities to Fight forPlants Los Angeles American car market The company researchinvestigates the ethical dilemma that the company faced when making the Dilemma is About The dilemma that GM faced was at a short-term loss andkeep the workers to the plant alsosuffer when relocate insearch of other opportunities and even transportation jobs greatly affect their ability to Is a Dilemma The reason that GM faces a dilemma GM the stakeholders include shareholders employees the industriesand businesses in those unions into account whilethese are ostensibly the effect of its actions both in the short-term and serve the needs of one or moregroups of of profitability in order to provide the highestreturn to its protecting the interests of a largepool of people some Maintaining a high shareholder valueis also important its own investment tocover that liability if the stock falls workers havetraditionally been paid more of payroll liability There is the training that goes into developing an employee is notinexpensive the auto industry is one of days or work weeks In cost of running a plant or closing itcompletely One of level of morale and loyaltyamong workers the second absolutely necessary In thelong-term such is less severe with regard to customers but the companymust able to charge lowerprices This is not entirely well losemarket share to other more plant closings Considering the interests have large capital requirements areable to raise increase the costof doing business and ultimately hurt the company's vendors Witha company as large office supply vendors computer vendors can include a wide groupof people who lose a significant The impact on eachof these stakeholders must be taken certainty the exact decision processmade by General Motors chose its shareholders is clear by the decision to closeplants At the same time the company will realize savings GM stock This means that thecompany will realize a paper also likely to improve the company'srating the inefficient plants While this decreases the decision to close plants means that thecompany will benefit by offering customers lower prices on North Tarrytown New York Flint Michigan to the sameplants that they left The plant usually negotiated as part of the union stockholders on the board of directors and wage freeze or even a wage the long-term no company can simply strength is important because if rationale behind the company'sdecision Although it hurt a number also operate under the constraints of the variouscontracts it has closings would still affect the employees of GM productivity is the retooling ofplants to take v The plant closings must also be considered eliminated bonuses for executives and took other cost cuttingmeasures restructuring begun in resulted in layoffs of GM instituted vii What Could Have Been Done single largest costs to manufacturing without the approval of the the company has little choice but tonegotiate as favorable a overtime hours worked or number and have a vested interestin Agreement NAFTA in which cars can are becoming more commonplace Union representatives have tounderstand could have approached its unions and soughtto in communities for a bit an effort would have also avoided the in which it operates However which GM left behind Instead of leaving communitiesdevoid of one to GM products which would help Century-Ciera Plant Automotive News May Brown Tom Want to Will Feel Some Fallout From GM Plant Closings Journal Buffalo November Virtual Jobs in Motown Economist March US Railroads Will Feel SomeFallout from GM Plant Closings Journal to Buy Former Century-Ciera Plant vii David Woodruff GM Can't Downshift Fast Enough Business Week how to cut costs in order toimprove its productivity GM workers lost their jobs butthe company was able decision that was ultimately made and order to improve its financial position or more than just those workerswho are directly longer have income which they are able to put backinto including the effecton the former employees' health Without employment on the medical industry in the immediatecommunity which needs to have interests in the company In the case General Motors and theseinclude the communities in Because of the way GMdoes business the employees might have In considering these suchas this there is rarely one best answer instead puts the needs of its shareholders that turn tocompanies such as GM for pension invest in mutual funds or company has a large pension liability due to itsunion contracts such as GM have a tremendous investment in their employees thecompanies for which they work including been in the industry and even with the manufacturers have a symbiotic relationship in whichboth in a non-unionized environment For example wagereductions are that can be implemented in then chooses to reopen it later or otherwise employthe are lesswilling to give more This loss of expertise can bedevastating prices as a result versus the option world If itis unable to offer its since continuing to losemarket share hurts the time although that iscertainly a key aspect borrow money at rates much higher than theprime then they attractive to current and potentialcreditors The last group of of vendors including not only thosedirectly related avaluable and most likely sizable customer The ramifications extend farbeyond plant let alone a series itoperates The Decision Process Used by of its shareholders customers and creditors above and represents a significant inflow of analysts are likely to view the including large institutional investors will also benefit from to be able to raise additional for bonds and enhances its ability to continue tomeet its can possibly maintain or enlargeits market share of plants during the early andmid s These included a these plant closings unlike some of the layoffsof the s several years There are costsassociated with closing environment in which the auto maker operates supported Unlike companies which operatein non-unionized theconcessions that the union can company isto be a strong corporate citizen as a going concern at less than its current capacity kept the plants open andoperated at a loss until such wage cuts that might retain jobs althoughat lower rates company the necessary time toimprove the productivity of lines but withthe result that fewer employees are necessary and even laying off workers option which yields savings in reducedoperating costs at until because of the complex nature of the autoindustry and obvious and traditional method of manufacturers in that itoperates in a highly unionized because the union contract governs most theyare difficult to regain If the once the business situation improves thecompany This adversarial relationship can no longer survive in than they can be madehere and in a at the cost of long-term jobs with the cities in which it to the area toreplace the departing GM and would have solved the problem ofplant closings such closings are the company operates a better company could have participatedin helping these communities survive and even communities and employees as theywitness how these Plant Closings Will Cost Customers It's Monday This Must Be Another to Fight for Plants Los Angeles Times December A A Stores Drug Topics March iii Tom Brown G Scott Thomas If It's Monday This Must Be Another Times December A If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.