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GSBS6042 Employment Relations | Suitable Labor Environment

Labor Relations

Case: Locating the New Recreational Vehicle Plant GMFC is planning to expand its U.S. operations by building a new plant that 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 United Auto 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? 
 
Business brief to your professor that provides advice 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. Include a rationale for your answers based on labor relations principles. 

Answer:

As GMFC plans to expand its operations in other countries, it also wants to keep the new plant union-free. The cost of labor plays a huge role in the company especi


ally with the formation of unions that focus on the labor. The cost for labor of unionized workers is higher, and therefore it means a company is making fewer profits which GMFC is trying to avoid. To avoid unionization, it will have to consider the following when employing their 500 staff members. Large companies are hard to manage and organize, and therefore GMFC should keep their size at a medium because it will provide a suitable labor environment and thus avoid unionization (Fossum, 2014).

GMFC should also consider locating its new plant in a rural area in the southern state. This is because the south does not have a strong union presence. Therefore the workers in this area will be unable to compare their wages or benefits with that of unionized workers in other areas.

Also in the southern states, the economy is not as abundant and therefore the labor is not expensive. GMFC will, therefore, be able to get staff at an adequate price. This will avoid unionization since the staffs are paid what they are used to (Hirsch, 2017). To keep the new GMFC plant competitive the company needs to provide competitive wages and benefits. The company needs to ensure that the wages and the benefits of the employees match those of unionized workers. This way the employees will not seek unionization because they are provided with sufficient wages and benefits.

References:

Fossum, J. A. (2014). Labor relations. Mcgraw Hill Higher Education.

 What do unions do for economic performance?. In What do unions do?

Hirsch, B. T. (2017). What do unions do for economic performance?. In What do unions do? (pp. 201-245). Routledge.

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