The company they all work for is Chceling, Inc. This company manufactures flashlights of all sorts. It is one of nine firms that manufactures flashlights. CheeTing, Inc. has a 17% market share (world- widel with the next largest competitor claiming 12% of the market. Currently, CheeTins, Inc. has four factories in the United States and one in Mexico. The company is facing the pressure of anemic profits within the context of fierce competition - both foreign and domestic. Some of CheeTing's domestic competitors have expanded their overseas presence by out- sourcing several company functions as well as relocating plants in low- wage countries. They have also laid off some of their domestic employees. ChecTing is under pressure to do the same thing. The current union contract expired four months ago and the union and management have been in the midst of contentious negotiations for the past nine months. I Current Union Compensation $13.84 to $16.01 average per hourly wage [have not received increase in 4 years) 5 paid holidays 4 paid sick days 2 weeks paid vacation after 1 year 100% Company-paid health care w dental 100% Tuition reimbursement with a 2.0 GPA in job-related courses and a 3.0 average GPA for non-job-related courses. Company matches employee 401K contributions dollar for dollar Management Wants Reduce average hourly wage by 10% 3 paid holidays & paid sick days 1 week paid vacation after 1 year and 2 weeks after 5 years Pay one-half of health care premiums. Employee pay the other half. Eliminate tuition reimbursement for non-job-related courses, 50% tuition reimbursement for job-related courses, GPA must be 3.0 or better Lay off 25% of current union workforce and transfer one-third of production to Vietnam Pay new hires $10.00 per hour for the first two (2) years before being paid the current minimum of $13,84 - with no benefits until after a full year of service 3-year contract Eliminate employer contribution to employee 401K Union Wants 5% increase in the average per hourly wage 5 paid holidays 4 paid sick days 2 weeks paid vacation after 1 year 100% Company-paid health care w dental 100% Tuition reimbursement with a 2.0 GPA in job-related courses and a 3.0 average GPA for non-job-related courses. Keep current US production in the US Hire more labor thereby eliminating mandatory 8 to 15 hours overtime per week Reject the two-tier compensation system for new employees New employees to enjoy benefits immediately 4-year contract Company to match employee 401K contribution dollar for dollar I Compared to its competitors, CheeTing's average hourly wage is about the seventh highest out of nine US competitors but the rest of the benefits are the best of all the competitors. Furthermore, Cheeling's skilled labor force the most skilled of all its competitors, resulting in a failure rate of its products as less than 3.4 defects per 1,000,000 flashlights. FINANCES: CheTing earned a 5.0% profit on sales of 34 billion. The average profit margin of their competitors' firms is 7%. Checling has 2,000 union employees. These figures are down by 10% due to outsourcing some non-core activities. The salaried staff (non-managerial) carns, on average, $650 to $700 per week plus benefits (same benefits as the union workers). This represents a 5% decrease in their salaries. Those in management have not received their regular year-end bonus for the last two years. The salaried staff is not unionized Management believes in order to remain competitive, they must downsize and expand their overseas' presence as well as contain their labor/benefit costs. Management is aware that closing one of its US facilities and opening one overseas would initially be very costly (a loss for the first two years of over $400 million). A strike would also be very costly to the company as it would lose market share as well as income. The relationship between the union and management at each firm is very adversariid hostile The assignment is for union and management to negotiate a new contract. If an agreement is not reached, then the union will go on strike The company they all work for is Chceling, Inc. This company manufactures flashlights of all sorts. It is one of nine firms that manufactures flashlights. CheeTing, Inc. has a 17% market share (world- widel with the next largest competitor claiming 12% of the market. Currently, CheeTins, Inc. has four factories in the United States and one in Mexico. The company is facing the pressure of anemic profits within the context of fierce competition - both foreign and domestic. Some of CheeTing's domestic competitors have expanded their overseas presence by out- sourcing several company functions as well as relocating plants in low- wage countries. They have also laid off some of their domestic employees. ChecTing is under pressure to do the same thing. The current union contract expired four months ago and the union and management have been in the midst of contentious negotiations for the past nine months. I Current Union Compensation $13.84 to $16.01 average per hourly wage [have not received increase in 4 years) 5 paid holidays 4 paid sick days 2 weeks paid vacation after 1 year 100% Company-paid health care w dental 100% Tuition reimbursement with a 2.0 GPA in job-related courses and a 3.0 average GPA for non-job-related courses. Company matches employee 401K contributions dollar for dollar Management Wants Reduce average hourly wage by 10% 3 paid holidays & paid sick days 1 week paid vacation after 1 year and 2 weeks after 5 years Pay one-half of health care premiums. Employee pay the other half. Eliminate tuition reimbursement for non-job-related courses, 50% tuition reimbursement for job-related courses, GPA must be 3.0 or better Lay off 25% of current union workforce and transfer one-third of production to Vietnam Pay new hires $10.00 per hour for the first two (2) years before being paid the current minimum of $13,84 - with no benefits until after a full year of service 3-year contract Eliminate employer contribution to employee 401K Union Wants 5% increase in the average per hourly wage 5 paid holidays 4 paid sick days 2 weeks paid vacation after 1 year 100% Company-paid health care w dental 100% Tuition reimbursement with a 2.0 GPA in job-related courses and a 3.0 average GPA for non-job-related courses. Keep current US production in the US Hire more labor thereby eliminating mandatory 8 to 15 hours overtime per week Reject the two-tier compensation system for new employees New employees to enjoy benefits immediately 4-year contract Company to match employee 401K contribution dollar for dollar I Compared to its competitors, CheeTing's average hourly wage is about the seventh highest out of nine US competitors but the rest of the benefits are the best of all the competitors. Furthermore, Cheeling's skilled labor force the most skilled of all its competitors, resulting in a failure rate of its products as less than 3.4 defects per 1,000,000 flashlights. FINANCES: CheTing earned a 5.0% profit on sales of 34 billion. The average profit margin of their competitors' firms is 7%. Checling has 2,000 union employees. These figures are down by 10% due to outsourcing some non-core activities. The salaried staff (non-managerial) carns, on average, $650 to $700 per week plus benefits (same benefits as the union workers). This represents a 5% decrease in their salaries. Those in management have not received their regular year-end bonus for the last two years. The salaried staff is not unionized Management believes in order to remain competitive, they must downsize and expand their overseas' presence as well as contain their labor/benefit costs. Management is aware that closing one of its US facilities and opening one overseas would initially be very costly (a loss for the first two years of over $400 million). A strike would also be very costly to the company as it would lose market share as well as income. The relationship between the union and management at each firm is very adversariid hostile The assignment is for union and management to negotiate a new contract. If an agreement is not reached, then the union will go on strike