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(Answered) The typically view of labor-management relations is that interactions


Give and Take;Case Summary;The typically view of labor-management relations is that interactions are heated. However, many;unions and management teams work together effectively. One example is Harley-Davidson;which had to recently reduce costs in its York factory because of recessionary pressures. The;plant was antiquated, labor costs were high, and there was inflexibility in employee movement;across many different job classifications. Instead of simply closing the plant, Harley was;encouraged to renegotiate with the union workers.;The terms of the new agreement, approximately half of the jobs in the plant were cut, and the;number of job classifications was cut from 60 to five. Newly hired employees would also start at;lower wages than the current workers, and some of the workers who had retained their jobs;would take pay cuts. Further, Harley and the state of Pennsylvania agreed to update the York;plant, and the factory would be the first to staff new jobs when the economy recovers. Some;experts believe that this deal was too one-sided in favor of Harleys interests.;Give and Take;The general view of management and labor union is that they are antagonist: when one wins;the other loses and vice versa. In reality, of course they are many situations where businesses;and unions coexist quite peacefully. And there are other situations where businesses and unions;find they have little choice but to work together in order for both to survive. During the economic;recession of 2009, for example, unions agreed to help out the businesses that employed their;members in several cases.;One notable example came from Harley- Davidson, the big motorcycle manufacturer.;One of Harleys biggest factories is in York, Pennsylvania. The York plant, one of Harleys;oldest, employed about 2,000 nonmanagerial workers. The recession caused a dramatic drop in;revenue for Hurley and the firm desperately needed to cut costs. Company officials determined;that Harley needed to reduce its over-all cost by 120 million to 150 million to remain competitive.;The York factory was a key site for cost reduction. For one thing, the factory was in dire;need of modernization. For another, the labor contract governing York workers called for wages;well above the industry average, moreover, the factory had more than 60 different job;classifications, and the union contract made it nearly impossible to move workers across;classifications.;One of the first options Harley considered was simply closing the York plant and moving;its jobs to the firms newest factory in Kentucky. That plant had a more flexible union contract;and the newest technology. The international Association of Machinists and Aerospace Workers;however, persuaded the company to negotiate a new arrangement that would allow some of the;unions workers to retain their jobs.;Under terms of the new agreement, which took effect in February 2010, about half of the;plants 2000 jobs would be eliminated. The number of job classification would also be cut from;60 to five, and Harley would have considerable flexibility to move workers from one to another.;Moreover, any new employees hired after February 2010 would start at an hourly rate of $;19.28, about 20 percent less than the previous starting rate of $ 24.10. Finally, the 1000 or so;workers who retained their jobs would be divided into two groups. About 750 first-tier production;workers would retain their full time jobs with current wages and benefits. The other 250 or so;would be classified as casual workers, these workers would take a wage cut about 30 percent;and would only work on an as-needed basis.;For its part, Harley agreed to invest $ 90 million to modernize the plant with the goal of;allowing the York factory to be the first one to create new jobs when demand for motorcycles;begins to increase. The State of Pennsylvania also agreed to chip in $ 15 million to support both;plant upgrades and new training programs for workers. Finally, Harley also agreed that the 750;first-tier production workers would have their jobs guaranteed for the duration of the 7 year deal.;Many observers saw this new contract as one-sided in favor of Hurley Davidson. One;expert, Professor Gary Chaison at Clark University, commented, This is tying the hands of the;Union for a long time. In contrast to similar renegotiations, the union does appear to have given;up a lot. For instance, the UAW renegotiated its labor contract with General Motors during the;automakers recent financial problems. Under terms of the new agreement, GM would be;allowed to eliminate one-third of its job and reduce its retiree health-care obligations by funding;a portion of its obligations with stock rather than cash. In exchange, the UAW received job;guarantees for two-thirds of the GM workforce, a large equity stake in GM, and a seat on GMs;board of directors.;Answer;1. Do you think the Harley deal was too one-sided? Why or why not?;2. If you were a Harley or GM employee and union member, would you have voted for the;new deal? Why or why not?;3. Do you think it is appropriate for a government entity (such as the state of Pennsylvania);to take an active role in union-management negotiations? Why or why not?;This another article can help.;MILWAUKEE Some motorcycle enthusiasts feared Keith Wandell might be the outsider who;drove Harley-Davidson into the ground. Instead, he may be remembered as the guy who kept;the motorcycle maker on the road.;Wandell grabbed the handlebars at the motorcycle maker in the heart of the economic crisis in;2009. Harley lost $55 million that year, as buying a motorcycle stopped being an option for;many consumers.;We had to make, quickly, some big, bold, decisions, he said in a recent interview.;Wandell was the first CEO from outside Harley, so those decisions were watched closely. Not all;were well-received. He got the unions approval to use temporary workers, which enabled;Harley to time its production closer to the peak bike-buying season, saving time and money. He;relied less on middle-aged men in the U.S. to buy the bikes. And he focused the company on;doing what many say it does best: making big, powerful, premium-priced Harleys. But that;meant getting rid of some popular secondary brands.;The company made $624 million last year, the best annual profit since 2008. It also boosted;profit by 30 percent in this years first quarter, compared to the same period in 2012. With lower;costs and more efficient production, analysts say Harley is in a good position to grow as the;global economy improves and in better shape to weather any future downturn.;Weve just got an awesome future, Wandell summed up in a recent interview.;Its a far cry from when he started. The recession and credit crisis sent shockwaves through;Harley, a company that had done so well for so long that there was little incentive to innovate. In;the early 2000s, many dealerships had waiting lists of buyers, and sales and profit grew year;after year. Then, in one year, bike shipments dropped about 25 percent and the company laid;off hundreds of workers.;The rapid change left employees stunned, and the introduction of Wandell, who didnt even own;a motorcycle at the time, was another blow.;You can just imagine. This was like, for the company, everything was upside down, said the;63-year-old Wandell, who came from car battery and building ventilation systems maker;Johnson Controls Inc., also based in Milwaukee. I mean, how can they bring in somebody from;the outside? What the hell is going on? The economys in the tank. Sales are down. Its this;that. People were just churning.;Harley had many of the same problems as the Detroit automakers: a big union labor force, old;manufacturing processes and strong competition from Japanese companies with cheaper;models on the market. It also had one additional, major disadvantage.;A luxury motorcycle, for most people, isnt necessarily a commuting tool, said Rommel;Dionisio, an industry analyst and senior vice president of equity research at Wedbush.;Under Wandells direction, Harley angered many riders when it pruned popular divisions. Fans;of Buell racing bikes were as avid as Harley enthusiasts, an
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