Leckenby Company

1994 Words20 Pages
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Harvard Business School

70

7

9-186-141
Rev. December 16, 1994

. ,Leckenby . company
Paul Arnold, Regional Representative of the United Ironworkers Union, has firmly announced that the members of his union employed at l..eckenby Company .will go on strike in two days unless their .wage demands are met. Alex Kunzler, President of Leckenby; received the threat without showing any emotion, although be realized the potentially explosive impact of a strike at this particular time.
Sunday, August 4

Leckenby Company

'· ·· · · . .. Leclcenby , Company ·is ·a --small-.: stee! -·fabricating ·firm ·located ·in ·Seattle,· Washington.
Founded in .1945, the company experienced relatively little growth during the forties and fifties.
In 1960,
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They agreed that the costs of a strike would be as follows:
Cost of a Strike

uays on Strike
0
1
2
3
4
5
6
7
8
9
10

11
12
13
14
15
16
17

18
19
20

2

cost to Leckenby
0
115,000
260,000
435,000
640,000
875,000
1,140,000
1,435,000
1,760,000
2,115,000
2,500,000
2,915,000
3,360,000
3,835,000
4,340,000
4,875,000
5,440,000
6,035,000
6,660,000
7,315,000
8,000,000
$

cost to 1ronworke_rs

s

0
55,000
120,000
195,000
280,000
375,000
480,000

595,000
720,000
855,000
1,000,000

1,155,000
1,320,000
1,495,000
1,680,000
1,875,000
2,080,000
2,295,000
2,520,000
2,755,000
3;000,000

Vlllile analyzing the costs of the strike to the respective parties, note that the negotiation is not entirely symmetrical. The costs· to both parties increase geometrically, but Leckenby
Company 's costs escalate more rapidly. The asymmetry is illustrated by the following graph:

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Rules Governing the Negotiation

Arnold and Kunzler will meet on August 4 to search for an agreement about the wage
By this paint in what has been a very lengthy and, at times, a bitter process, the two sides have heard each other 's
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