Conflict Resolution: Case of General Motors - General Motors Essay Example

Conflict Resolution: Case of General Motors

            The case of UAW and GM is considered one example of addressing conflict resolution scenarios - Conflict Resolution: Case of General Motors introduction. Realizing the important process revolving around the parameters of the negotiation is an important component in achieving and creating a middle ground for discussion and resolution. In the end, the success of negotiations and resolution of conflict should beset on the capability of both parties to meet at the middle – bargain and compromise.

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            Pursuing the detail of the negotiations, the issue surrounding UAW and GM are the relevant benefits and guarantees that will ensure monetary compensation package during a qualified GM employee’s retirement. Due to the inability of GM management to listen, more than 73,000 employees stopped working and clamored for changes with regards to their compensation packages and other benefits.

            Seeing this, General Motors addressed the issue with UAW leaders by way of closed door meetings where the issue of both parties can be addressed appropriately. It is through here that each panel showcased their needs and furthered their reasons for such. On one hand, we see General Motors management arguing that the acceptance and creation of such package can prove costly for the company and would require a lot of consideration before applying. On the other hand, United Auto Workers union needs an assurance that their benefits and retirement be ensured by the company.

            Thus, the process of actual negotiations focuses around the issue of creating a new compensation package for GM employees on the presumption of optimum cost-reduction for the company. The issue may seem a challenge especially for the General Motors who continues to suffer from setback of drop of sales and relatively high cost of labor. “The automaker will have to pay tens of billions of dollars of cash, stock and debt into the trust fund to cover those future costs” (Isidore, 2007). Due to this careful negotiations must be facilitated to enhance the outcome suitable and applicable to both members of the party.

            However, if GM would not act promptly, continued loss of profits and income are one of the scenarios the company has to face. Prolonging the process of strike also can dismantle and create difficulty in coming back from GM’s losses. This is in relation to the continued setbacks suffered by the company though not related to the strike. “GM North America returned to the black in the second quarter; it had been expected to lose money once again for the full year in 2007, even without costs associated with the strike.” (Isidore, 2007)

After realizing the importance and depth of such issue, the negotiators were able to address each other’s concern and apply a new set of compensation package for GM employees. This in turn addresses the needed boost and at the same time bridges the gap among employees and management. “The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments” (Isidore, 2007)

            After the completion of negotiations and talks, there needs to be an approval by members of the GM workforce concerning this plan. The initiative should create an appropriate number of “Yes” votes to gain ratification. In the case, the UAW negotiating team that the overall compensation was fair. “We feel very good about this tentative agreement. I think the strike probably helped our side more than theirs.” (Isidore, 2007) In the end, all issues have been addressed and the problems have been solved. Thus, by careful collaboration and bargaining, both GM and UAW benefited in the agreement.

Reference

Isidore, C. (2007) GM-AUW reach deal to end strike in CNNMoney.com. Retrieved April

20, 2008 from http://money.cnn.com/2007/09/26/news/companies/uaw_gm_deal/index.htm?postversion=2007092604

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