North American Tire Plant Case Studies Examples

Question 1

The pros of the strategy used by North American Tires in hiring replacement workers are as shown below:
Hiring replacement workers enabled the company to increase its production volume which had gone down due to sabotage by the striking workforce.

The company was able to acquire cheaper labor as opposed to its previous workforce (Cramton & Tracy, 1998).

The company was able to show those employees who returned to work that it has the powers to fire them or retain them.
The whole scenario served as a warning for the current employees to desist from challenging the authority of the company (Go2hr, 2014).

The cons of the strategy used by North American Tires in hiring replacement workers are as shown below:

The company violated the legal rules by firing the former workers when their case was underway (Go2hr, 2014).
The company can incur extra costs when the case is settled because it will be required to pay the striking workforce their dues and reinstate them at their workplaces. The amount paid to the striking workers will also include salaries for the months they were on strike.

The reinstatement of workers after the strike can lead to excess employees at the company.

The company may be faced with legal lawsuits for refusing to negotiate with the union about the workers welfare (Go2hr, 2014).
The behavior of the management is unethical because hiring of replacement workers does not solve the problem the company has with the union employees. The hiring of replacement workers is a short term solution to the company’s problem regarding production. The management is unethical because it has ignored the welfare of the previous employees, and is focused more on the progress of the company (Go2hr, 2014). The actions of the management team show that similar situations in future will be handled the same way. Such occurrences instill fear among the employees, and leads to the abuse of their rights.

Question 2

The advantages of breaking the union of workers at North American Tire Plant are as shown below:
Less opposition from workers as they demand for their rights.
The opportunity to incur low labor costs, thus increasing the profits of the company (Cramton et al., 1998).

The benefit of having productive employees who work hard because they do not want to lose their jobs.

The opportunity to promote employees who show high degrees of commitment and are result oriented (Cramton et al., 1998).

Avoiding the salary increment of employees who laze around.

The disadvantages of using the strategy of breaking the Local 974 union of workers at the North American Tires Plant are as shown below:

High employee turnover because the employees become dissatisfied when their working conditions do not change (Mishel & Walters, 2003).

Expert workers can be poached by the other companies that offer better salaries.
The employees can steal from the company so as to afford better lifestyles.
The company will have to rely on workers who do not possess good skills because the skilled workers prefer to work in companies that follow the standard measures set for employees (Mishel et al., 2003).

Question 3

The firm should use industry standards while setting the wage rates. The use of industry standards will enable the company to be competitive like the other companies; therefore, the problem of high employee turnover will not arise. The employees will be happy if they know that they are being paid like other employees in the industry (BS, 2012). Bonuses and incentives can then be offered to motivate the employees to work harder.

References

Go2hr, (2014). Strikes, Lockouts, Picketing and Replacement Workers. Go2hr. Retrieved from: https://www.go2hr.ca/articles/strikes-lockouts-picketing-and-replacement-workers
Cramton, P. C. & Tracy, J. S. (1998). The Use of Replacement Workers in Union Contract Negotiations: The US Experience. Journal of Labor Economics, 16.
Mishel, L. & Walters, M. (2003, Aug 26). How Unions Help all Workers. Economic Policy Institute. Retrieved from: http://www.epi.org/publication/briefingpapers_bp143/
BS, (2012). Setting The Right Pay Rates. Business Scene. Retrieved from: http://www.business-scene.com/resources/setting-right-pay-rates