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Wisconsin Specialty Products Division of Lamprey, Inc.

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by

luis lopz

on 7 January 2014

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Transcript of Wisconsin Specialty Products Division of Lamprey, Inc.

Introduction
Wisconsin Specialty Products Division of Lamprey, Inc.

Manufacturing plant has been located in Oconomo since 1921.

Issues of high labor costs in the United States manufacturing plant and outsourcing.

The plant has a long meaningful relationship with the surrounding community.
Jim Malesckowski
President of the specific division
Controls Oconomo plant

Jack Ripon-
CEO of the entire company.
Final say over all decisions

Main
major problem present:

The labor costs in the Oconomo plant are too high which is keeping the company from making a profit.

There is an opportunity available to outsource to a mexican plant.
Moving the plant would benefit the company but hurt the workers of Oconomo.
Alternatives
Attempt to renegotiate with the union to accept lower wages in order to keep their current jobs.
Lower labor costs to help save the company money.
Keep the plant in Oconomo, Wisconsin and try to compete as best we can.
Attempt to reason with union
Move to mexico
Do nothing
Mexico
Workers at the Oconomo plant are being paid and hourly wage of $16.

Mexican workers would work the same jobs for around $1.60 hourly rate.

Lower labor costs would save the company around $15 million a year.

Laying off 520 loyal hard working American employees would devastate Oconomo,
Attempt to re-negotiate their current wages to lower labor costs.

Cut down on the number of employees and cross train remaining employees.
Pay cuts:

altering pay from $16 to $12 per hour would save the company roughly $4.5 million dollars a year.
Talk to Union
Promote company as being American made.

Win over employees

Keep customers loyal

Most likely will only be a temporary fix to the problem.
Do nothing
Meet with the Union and try to renegotiate with them in order to lower labor costs.
Open to different ways of lowering the cost.
Let them know that this is really their only option.
Explain to them that an opportunity has presented itself which would benefit the company in a huge way.
Set up a series of negotiations with the union representatives.

Hopefully, after a deal has been made we would begin the evaluation process.

Monitor new savings to determine its sufficiency .
If the Union does not accept deal.

Plant moves to Mexico
Build up facilities and train new employees
Shut down Oconomo plant

Make sure newly established workers have a sustainable income and the care they need.
Implement and Evaluate
CASE 10-2 Southern Discomfort
Action
Full transcript