Steer negotiations between labor and management

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Reference no: EM132284593

Case study -

All 305 employees of Mott’s apple juice plant have been on strike for more than three months. They are protesting the fact that the company wants to make severe cuts in pay and benefits—a reduction of wages by $3,000 per year, a pension freeze, a reduction in 401(k) contributions, and a decrease in the health insurance subsidy.

While cuts in pay and benefits are nothing new during recessions, what is unusual in this case is that Mott’s parent company, Dr. Pepper Snapple Group, is more profitable than ever. In the last year, its net income was $550 million, a dramatic improvement from the previous year when it lost $312 million. Because of this success, employees are accusing the company of being greedy. The company meanwhile, defends the cuts by arguing that its current labor costs are considerably higher than those of other local companies. The average pay at the Mott’s plant is $21 per hour, while other factories and transportation companies in the area pay closer to $14 per hour.

Questions:

1. How could you help steer negotiations between labor and management so that the conflict between them is healthy and productive? Is that even possible??

2. Is the company justified in trying to cut costs even when it has made a huge profit? Are the employees justified in not working to protest what they perceive as unfair cuts?

Reference no: EM132284593

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