Michigan Manufacturing Corporation

2030 Words Jul 25th, 2013 9 Pages
OPERATIONS STRATEGY

Ist Case Submission

On

Michigan Manufacturing Corporation:

The Pontiac Plant

Submitted on

12th July 2013

Submitted by

Group 13

Nikhil Majhi 1111045

Overview of Michigan Manufacturing Corporation:

Michigan Manufacturing Corporation's Heavy Equipment Division (HED), headquartered in Pontiac is a large scale manufacturer of axles (both on-highway and off-highway applications) and brakes. The division has been underperforming and has been under the corporate radar regarding its long term alignment with the company’s long term business strategy. As of 1987, the division has 9 plants operating on-stream, and 1 (Fremont) under
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• The Plant: The facilities at Pontiac had not undergone any maintenance and upkeep activity during the last many years. It thus had degenerated and still lies under the minimum level of underwriter’s standard. The plant required major mandatory improvements within the next few years. • Labour Issue: The machine operators at the Pontiac plant are skilled and are specialized in operating a particular type of machine. Further the workers are even protected by union. The plant had been following the policy of long term employment for its employees. As per the age profiling of Pontiac employees, there are two groups of employees, The higher (averaging 50 years and above) and the lower (averaging 25 years) But with the present state of the plant partly brought upon by the corporate policy of not releasing enough funds, the company has been underperforming and the employees had turned to absenteeism. • Overhead: The overall maintenance costs have risen owing to the old plants. The pension policy of the plant entitled all the retired workers who have worked in the plant whether the same or transferred to a new plant. The service pension funding expense in 1987 alone stood at $648,000. It was not an obligation for the company however recently; the unions had started to expect it as an obligation on the company. • Product…