Some of the issues facing Malescowski and Lamprey, Inc. are the following: the high cost of labor, being able to compete with competitors, as far as price and the product quality of their goods produced at that particular facility. One of the major issues is that if the company decided to cease operations in Mexico, the town of Oconomo would suffer greatly. With a population of just over 9,000 people, the plant employs 520 local workers.
If Lamprey moves its operations elsewhere, could be because of the following; A new location, as opposed to expansion of an existing plant, can take advantage of changing market conditions or other movements that are taking place. There comes a point when it costs less to start over than to repair the current facilities. Further, there are newer machines, new processes and new plant layouts that improve productivity. All of this can make a new facility look like the best choice.
Still, the tendency of the human mind is to play up current facility’s shortcomings while downplaying the costs of starting up a new facility. It is human nature to idealize how well everything will go at the new site. Some communities, especially large ones, may be able to absorb the closure of a facility easily. There may be jobs in other companies in the area, so there is little effect on local social services. However, in small communities the impact of closing even a fairly small facility may be great.
The economic impact of the move may be very large, leaving many people unemployed at a time when it is hard for the local community services to respond. Working through the move with local leaders takes time but can pay off in helping make the move a smooth one. To ensure that all parties involved had all the information possible to make a sound decision for continuing operations in a given area, the following aspects would have to be considered; Participation is probably the most universally recommended technique for reducing resistance to change.
Allowing affected employees to participate in both the planning and implementation of change can contribute to greater identification with the need for and understanding of the goals of the new strategy. Participation in implementation also helps to counteract the disruption in communication flows, which often accompanies implementation of a change (Harris, 1999). Put yourself in Malescowski’s place and discuss what arguments to present to the union.
If I were in Malescowski’s position, I would continue to attempt to push a lower wage. I would stress the fact that while they may be taking a pay cut today, in the future it could lead to company growth and may lead to future jobs for their community. I would also ask for a freeze to future hiring for a period of time, to allow for the company to continue to stabilize and return to profitability.
It is clear that while some employers will indeed make good on threats to move some production abroad, the great bulk of transnational corporations still concentrate their factories, investment, research, development and sales in their home countries. Thus, of 37,000 transnational corporations, 70 percent are based in the 14 countries of the advanced capitalist world (Smith, 1998). I would relay to them that we understand the importance of our company in this community and is the reason for the request of concessions.
