Determining productivity gains

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Reference no: EM1370146

Suppose labor costs are 17.5% of revenue per vehicle for General Motors. In union negotiations throughout the late 1990s, GM attempted to cut its workforce to increase productivity. Together with the job reductions they planned, GM officials hoped to make the company's North American operations fully competitive with its U.S. and Japanese rivals with respect to total costs.Why are productivity gains so important to GM?

Reference no: EM1370146

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