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Keeping a car plant union-free and competitive

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GMFC is planning to expand its U.S. operations by building a new plant. They will employ about 500 production workers. This new plant will manufacture motorized recreational equipment including all-terrain vehicles, personal watercraft, and snowmobiles. The equipment will assemble mechanical components produced in other GMFC operations or purchased from suppliers. The new plant will fabricate fiberglass body parts and complete the final assembly process.

GMFC would like to operate the new plant union-free. It's likely that the Untied Automobile Workers (UAW), and perhaps other internationals, will attempt to organize the workforce within a year after start-up. You are a member of a planning committee for the new plant. Your primary area of responsibility involves issues related to potential unionization and labor costs.

What advice would you provide to the company on size, location, staffing, wages and benefits, and other employee relations issues that would help GMFC keep the new plant union-free and competitive?

Need 2 pages of double-spaced information on the questions at the end of the case. Please also provide references.

Thanks in advance!!

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Solution Preview

Step 1
Since the company wants to make motorized recreational equipment including all-terrain vehicles, personal watercraft, and snowmobiles and the plant is required to have 500 persons, United Automobile Workers or other unions will try to unionize the workforce within a year of startup. Since, I have been entrusted the responsibility of avoiding unionization and keeping labor costs at reasonable levels, there are several recommendations.

Step 2
The size of the plant is influenced by the engineering design and is required to achieve economies of scale. It is recommended that the plant be located in South Carolina. The selection of this state has been done because unionization is relatively low in that state.

Step 3
The other practices that will keep the facility union free are to provide competitive wages and benefits. My department will survey the marketplace to make sure that our compensation packages are competitive and comparable with unionized companies. ...

Solution Summary

This solution explains the steps taken by a firm to keep its car plant union free. The sources used are also included in the solution.