Automakers provide an interesting study in cost management strategies. General Motors often provides a contrast to other U.S. manufacturers in that approximately 46,000 of its workers are union-represented American workers. One of the variables driving GM's operational strategy is its high level of unionization. The unions have resisted attempts made by GM to restructure operations and outsource more components.

a. From the perspective of price-based competition, why would GM want the flexibility to outsource more of its parts and components?

b. From the perspective of managing quality, how could outsourcing positively or negatively affect GM's ability to manage quality relative to its competitors?

c. What ethical responsibility does GM bear to the union in seeking to restructure and outsource more of its parts manufacturing?