Reference no: EM133084835

Step 1: Background 

You work as the lead HR Manager for BWA Enterprises, a company that builds parts for one major car manufacturer. On the organization chart, management, and administrative tasks are represented by rectangles, the union is represented by the ovals.

You are preparing for negotiations for the next CBA. The current, 3-year CBA is set to expire in 12 months.  

At present, there is a new union president that you have found very difficult to deal with; the union is considered antagonistic towards management ideas, proposals and policies. The grievance rate has increased significantly since the last round of negotiations; primarily around issues of safety, overtime requirements (due to not enough workers to cover all of the shifts), non-fulfillment of benefits, and inadequate training when a new product line is introduced.

On the other hand, management is sympathetic towards creating a better working environment around the areas of grievance. The key will be to find a mutual way to address the concerns. However, stakeholders have also drawn a hard line along areas of pay-raises, more benefits, retirement options and years of service increases (such as extra vacation days, salary grids, holidays for birthdays, etc.).

40% of our annual gross profit of $10 million dollars go to employees within the union (80 members) for salary, benefits, and retired employee benefits. 20% goes to administrative and management, 25% goes to inventory, taxes, equipment, and facilities, and other supporting costs. The remainder is stockholders equity.

Financially, BWA enterprises is in the black, but because of recent tariff and trades restrictions across the border, our main customers have already given notice that they will be looking to domestic sources for the parts we produce. Also, our research department has reported that several of the jobs currently being filled by humans has the potential to be automated by AI within a 2 - 5 year timeframe based on new inventions and research. The union is aware of this development.

Step 2: Questions you should be able to answer in your case file

1. How would you comprise a negotiating team? Specifically, decide upon the number of negotiators for management and the departments to be represented. Provide a rationale for each position you choose (their role, responsibility, and expertise supplied).

2. Union objectives 

• Sum up what you believe the union's initial stand will be based upon the current economic, external and internal environments.
• Research recent union demands from negotiations in manufacturing companies, describe how successful they were at getting all of their demands.
• Achart that assumes their demands will always be higher than what your stakeholders are willing to offer. As an example from your chart above:
  • 5-year agreement
  • 4% increase in each year
  • Increases to vacation entitlement
  • Increases to allocations for safety gear
  • Specific language around contracting out union jobs
  • Benefit coverage to continue at age 65 for all employees

3. Strategies to improve union-management relations -

• Describe areas of bargaining that compromise can be achieved.
• Determine strategies that can be used to make negotiations and grievances run more smoothly.
• Review and comment on at least 6 of the following data to support the objectives:
• Compensation per employee including overtime worked
• Paid holidays
• Vacation pay
• Leaves
• Allowances (meal allowance, education allowance, meal allowance, clothing allowance, etc.)
• Accident/incident rates
• Group benefits costs
• Demographics on workforce
• Training spending

4. A strike/lockout plan -

• Create a  lockout plan in case bargaining does not work. You can use research to describe the elements you would neeed to consider and how you, as a manager would prepare for this.
  • Composition of strike/lockout committee;
  • Draft action plan outlining roles and responsibilities of committee members and other management personnel;
  • Consider the use of replacement workers;
  • Prepare notices and identify who the notices should be sent to;

5. Dispute resolution opportunities/procedures 

• Identify what can be done to resolve issues informally;

6. A draft bargaining notice and schedule 

• Prepare a formal notice to the union

7. Reflection -

• Comment on the differences between both sides in the bargaining process given the external environmental factors you have already been given.
  • Why would management want a 2-year CBA while the union would want a 5 year CBA
  • What compromises do you see as being easy for both sides, which will be more difficult?
  • With each negotiation away from the initial offers, there will be compromise; who loses out with each compromise that is given?
  • Describe the scenario above in terms of what would make it win-win, lose-lose and win-lose (for both sides).
• Describe how the proposed changes will affect the bottom line of company profits.