Reference no: EM132968488

Moving Production Overseas 

After analyzing relative production, distribution, and tariff costs, AllStar decides to build a plant in Peru where costs are significantly lower than in the home U.S. plant (e.g., 20% lower to produce a small economy tube of toothpaste). Previously 200 million units for Latin America had been produced at the manufacturing facility in the U.S. (home plant). However, after the Peru plant is completed, AllStar begins supplying all of Latin America from the local plant. As such, the 200 million units no longer need to be produced at the U.S. plant. As a result of moving Latin America-bound production overseas, AllStar has too much excess capacity in the U.S., and decides to close a manufacturing facility in U.S. While you now employee hundreds of manufacturing workers in Peru, you have laid off roughly the same amount in U.S.

• What are AllStar's responsibilities in the U.S. when shifting production overseas?
• How should AllStar manage its community relations activities in Peru?
• What might be some "unintended consequences" of moving production overseas?

Please provide 3 to 5 supporting points for each question. For additional reading please see the following articles.

(https://hbr.org/1988/09/manufacturing-offshore-is-bad-business)

(https://www.thebalance.com/how-outsourcing-jobs-affects-the-u-s-economy-3306279)