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Shutdown at Eastland

Shutdown at Eastland

When Speedy Motors Company closed its assembly plant in Eastland, Michigan, lobbyists for the organized labor cited the case as one more reason why the federal government should pass a law regulating plant closings. With less than a month's notice, the company laid off nearly 2,000 workers and permanently shut down the facility, which had been in operation more than 20 years. The local union president called the action " a callous and heartless treatment of the workers and of the community."

Company executives defended the decision as inevitable in view of the harsh competitive realities of the automotive industry. "Purchases of the Speedy model produced at Eastland have fallen to almost nothing and there is nothing we can do about changes in consumer preferences," a company spokesman said.

Labor lobbyist insist that instances such as this show the need for a Federal law which would require companies to give as much as two years' notice before closing a major factory, unless they can demonstrate that an emergency exists. The proposed legislation would also require the employer to provide special benefits to workers and the community affected by the shutdown.

"Closing plants needlessly and without warning is an antisocial, criminal act," a union leader said. "Giant corporations don't give a thought to the hardships they are imposing on long-time employees and communities that depend on their jobs. The only thing they consider is their profit."

Opponents of the legislation maintain that the proposed law would strike at the heart of the free enterprise system. "Companies must be free to do business wherever they choose without being penalized," a corporate spokesman argued. "Plant closing legislation would constitute unjustified interference in private decision making. Laws which restrict the ability of management to operate a business in the most efficient manner are counterproductive and in direct conflict with the theory of free enterprise."

What should be the terms?
What notice would you give?
What benefits should be provided?
How should the stakeholders interest be considered?
Who should take responsibility for those laid off as a result of the closing?


Solution Preview

In the enclosed file a plan to close the plant must be proposed.

What should be the terms?

The company cannot file a plan to close the plant if they did not make advance written notice for all employees. Advance notice gives workers and their families some transition time to adjust to the prospective loss of employment, to seek and obtain other jobs and, if necessary, to enter skill training or retraining that will allow these workers to compete successfully in the job ...

Solution Summary

Please see the attached file. This solution is comprised of a detailed explanation to answer the request of the assignment of more than 600 words of text.