Case Study Union and Auto Parts Essay

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Negotiation Case Study The purpose of this problem is to familiarize students with the negotiation of a labor contract. The problem is strictly a hypothetical one and does not pertain to any actually management or union. It is designed to test in a practical way the student’s understanding of the issues of collective bargaining studied during the semester and the strategy of the bargaining process. The following constitutes the case on which demands will be based and which provides the framework for the negotiations. Read it very carefully to size up the situation. Base your demands only on the facts given here. Representatives of the Auto Products Corporation of Indianapolis, Indiana, and Local 5000, United Metal Workers of…show more content…
Of the 1,409 bargaining unit employees, there are 175 skilled maintenance employees (electricians, plumbers, carpenters, mechanics, and tool and die makers), and their average hourly earnings are $16.05. The existing contract contains an escalator (COLA) clause providing for the adjustment of wages in accordance with changes in the consumer price index. There is no “cap” on the amount of the increase. It provides for a $.03 increase in wages for each 0.4-point increase in the CPI. The escalator arrangement is reviewed on a semiannual basis. The current hourly rates include the increases generated from the escalator clause and the annual improvement factor. During the term of the 3-year contract, workers received a $.75 increase in wages including a $.40 from the operation of the escalator clause and $.30 from the operation of the annual improvement factor (a $.15 increase on the anniversary date of the contract in each of the past 2 years). The Little Rock plant was built 5 years ago. It started with a modest-sized labor force, but during the past 3 years the southern plant has expanded sharply, and it now employs about 1,500 production and maintenance workers. Efforts to organize the southern plant have so far been unsuccessful. The union lost an NLRB election last year by 300 votes. Of the 1,500 employees, 1,300 cast ballots, with 800 voting against the union and 500 voting for it. The average wage in the Little Rock plant is

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