ALL PARTS PLESEEEEEE

E-1. You are the Chief Executive Officer of Batteries, Inc. (the "Company"), a Delaware corporation located in Worcester, Massachusetts. The Company is 20 years old and employs 1,000 employees 900 of whom are hourly wage earners and work on the production lines with average hourly wages ranging from $18 to $35 an hour. Most of the hourly wage earners are high school graduates. The Company provides health insurance benefits equal to 80% of the cost of such insurance with the employees paying the balance, about $8,000 per employee annually. The Company's share of healthcare insurance is over $7 million annually. The Company also has a 401(k) retirement plan for its employees. The Company matches all employee contributions up to 3% of each employee's wages or salary. The Company's contribution exceeds $12 million annually. COVID-19 has put a real dent in the Company's sales, which continues to this day. The Company will lose over $10 million in fiscal 2022 . The gross revenues of the Company exceed \$300 million annually. Competitors have outsourced some or all of their U.S. manufacturing to Mexico with substantial labor cost, healthcare and pension savings. You have been approached by Mr. Yang, a Chinese businessman, who would like you to consider outsourcing all of the Company's manufacturing to Szechuan, China. Chinese employees with similar educational experience to Batteries' employees earn Users RPL/WPIA8017368.DOC 1 approximately $4 an hour without any health insurance or pension expenses because China, a quasi-communist or socialist country, provides those benefits to all of its citizens. Women and children in Szechuan earn substantially less than $4 an hour and work 12 to 15 hours a day, six days a week. Mr. Yang, the nephew of a high government official has indicated he will be able to expedite his proposal through China's complex regulatory system. He has requested a $1,000,000 consulting fee for his personal services in this regard. You have reviewed Mr. Yang's financial proposal to (1) either build or buy a factory in China to be owned by the Company employing Chinese men or women under the Company's management control or (2) to contract with an existing Chinese manufacturer who will build the batteries to the Company's specifications, but using Chinese employees under Chinese management. Each of the proposals would appear to save the Company millions of dollars in manufacturing costs, healthcare costs and retirement costs. The Company has several patented processes for its batteries for electric cars which it needs to protect. As you weigh the consequences of outsourcing, you realize that there are a number of business, legal and ethical issues which must be considered before making the decision to outsource to China. You have scheduled a meeting with your board of directors, who have asked you to provide a written report to the board examining the pros and cons for each of the following five (5) questions. You have taken the course The Legal Environment of Business Decisions and should be well equipped to write this report using your textbook and outside readings as source materials. You do not have to go beyond course reading requirements. Your report should have significant detail and cross referencing to the textbook and other required readings for the course. Each of the issues in items (a) through (e) deserve approximately a one-half (1/2) page to one (1) full page, double spaced, typed answer. (a) Should Batteries, Inc., a U.S. company, consider outsourcing all of its manufacturing to China? Why or why not? What are the legal issues raised by Mr. Yang's request for a consulting fee? (b) Should Batteries, Inc. outsource to a Chinese owned manufacturer or should it buy or build its own facility in China and hire Chinese nationals for employees, train them and manage them with U.S. or Chinese managers as a foreign subsidiary owned by Blue Batteries? Give me your reasons for your advice and the risk profile for each. (c) Using both a Kantian analysis and Utilitarian ethical analysis, discuss whether either proposal is an ethical choice for the company in the current U.S. business and (c) Using both a Kantian analysis and Utilitarian ethical analysis, discuss whether either proposal is an ethical choice for the company in the current U.S. business and COVID-19 environment. (d) Are the savings which Batteries, Inc. will experience from not having to pay health insurance or 401(k) contributions worth moving the company's business to China? (e) What are the legal and ethical ramifications of laying off most of its U.S. work force for the Company to consider? What is your recommendation? E-1. You are the Chief Executive Officer of Batteries, Inc. (the "Company"), a Delaware corporation located in Worcester, Massachusetts. The Company is 20 years old and employs 1,000 employees 900 of whom are hourly wage earners and work on the production lines with average hourly wages ranging from $18 to $35 an hour. Most of the hourly wage earners are high school graduates. The Company provides health insurance benefits equal to 80% of the cost of such insurance with the employees paying the balance, about $8,000 per employee annually. The Company's share of healthcare insurance is over $7 million annually. The Company also has a 401(k) retirement plan for its employees. The Company matches all employee contributions up to 3% of each employee's wages or salary. The Company's contribution exceeds $12 million annually. COVID-19 has put a real dent in the Company's sales, which continues to this day. The Company will lose over $10 million in fiscal 2022 . The gross revenues of the Company exceed \$300 million annually. Competitors have outsourced some or all of their U.S. manufacturing to Mexico with substantial labor cost, healthcare and pension savings. You have been approached by Mr. Yang, a Chinese businessman, who would like you to consider outsourcing all of the Company's manufacturing to Szechuan, China. Chinese employees with similar educational experience to Batteries' employees earn Users RPL/WPIA8017368.DOC 1 approximately $4 an hour without any health insurance or pension expenses because China, a quasi-communist or socialist country, provides those benefits to all of its citizens. Women and children in Szechuan earn substantially less than $4 an hour and work 12 to 15 hours a day, six days a week. Mr. Yang, the nephew of a high government official has indicated he will be able to expedite his proposal through China's complex regulatory system. He has requested a $1,000,000 consulting fee for his personal services in this regard. You have reviewed Mr. Yang's financial proposal to (1) either build or buy a factory in China to be owned by the Company employing Chinese men or women under the Company's management control or (2) to contract with an existing Chinese manufacturer who will build the batteries to the Company's specifications, but using Chinese employees under Chinese management. Each of the proposals would appear to save the Company millions of dollars in manufacturing costs, healthcare costs and retirement costs. The Company has several patented processes for its batteries for electric cars which it needs to protect. As you weigh the consequences of outsourcing, you realize that there are a number of business, legal and ethical issues which must be considered before making the decision to outsource to China. You have scheduled a meeting with your board of directors, who have asked you to provide a written report to the board examining the pros and cons for each of the following five (5) questions. You have taken the course The Legal Environment of Business Decisions and should be well equipped to write this report using your textbook and outside readings as source materials. You do not have to go beyond course reading requirements. Your report should have significant detail and cross referencing to the textbook and other required readings for the course. Each of the issues in items (a) through (e) deserve approximately a one-half (1/2) page to one (1) full page, double spaced, typed answer. (a) Should Batteries, Inc., a U.S. company, consider outsourcing all of its manufacturing to China? Why or why not? What are the legal issues raised by Mr. Yang's request for a consulting fee? (b) Should Batteries, Inc. outsource to a Chinese owned manufacturer or should it buy or build its own facility in China and hire Chinese nationals for employees, train them and manage them with U.S. or Chinese managers as a foreign subsidiary owned by Blue Batteries? Give me your reasons for your advice and the risk profile for each. (c) Using both a Kantian analysis and Utilitarian ethical analysis, discuss whether either proposal is an ethical choice for the company in the current U.S. business and (c) Using both a Kantian analysis and Utilitarian ethical analysis, discuss whether either proposal is an ethical choice for the company in the current U.S. business and COVID-19 environment. (d) Are the savings which Batteries, Inc. will experience from not having to pay health insurance or 401(k) contributions worth moving the company's business to China? (e) What are the legal and ethical ramifications of laying off most of its U.S. work force for the Company to consider? What is your recommendation