(Restructuring and outsourcing ! Automakers provide an interesting study in cost management strategies. General Motors often provides a contrast to other U.S. manufacturers. For example, DaimlerChrysler and Ford have opted to outsource many product components, but GM continues to manu¬ facture a much higher percentage of the parts needed to produce its cars.

One of the variables driving GM’s strategy is its high level of unionization. The unions have resisted attempts made by General Motors 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 posi¬ tively 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 re¬ structure and outsource more of its parts manufacturing? LO.1