Read The Case Study On Harley And Sub Zero Below And Answer

Read The Case Study On Harley And Sub Zero Below And Answer The Three

Read the case study on Harley and Sub-Zero below and answer the three questions at the end of the case. Then, use the internet to identify one other company that has frozen pay or benefits, why they had to do so, and how it affected the company or employee relations. Remember to cite sources using APA format, and your paper should be approximately 3 pages long.

Workers at Harley and Sub-Zero Accept Pay Freezes and Cuts to Keep Their Jobs from Moving: At Harley-Davidson, the company that makes the iconic motorcycle, union workers in Wisconsin agreed to an unusually long contract of seven years. During that seven-year period, the company has the right to freeze wages. There will also be higher health care expenses for workers. The company will also be allowed to use more casual workers who receive lower wages and probably will not receive health or retirement benefits. Why did workers accept this contract? Harley said that it needed to cut millions of dollars in costs to be profitable in an industry where sales have weakened and the timing of a recovery is unknown. Harley lost $55 million in the past year.

One way to cut costs would be to move production to other states with lower labor costs or to move production to lower-cost countries. Harley put on the table the possibility that it would completely close its Wisconsin factories without the worker concessions and resulting labor cost savings. By voting to accept the concessions, workers received a verbal commitment that the factories would stay open, but no written guarantee. Some jobs will still be moved out of Wisconsin despite the concessions. But, some workers saw little alternative. As one put it, “I am too young to retire and too old to start over.”

A similar situation took place at Sub-Zero/Wolf, an appliance manufacturer. The company threatened to move jobs from Wisconsin to a lower-cost plant in Kentucky if workers did not agree to concessions. The unionized workers ended up agreeing to a 20% pay cut, followed by a freeze of wages and benefits for the following four years. As a result, the company will still move some jobs to other locations, but most jobs will now remain in Wisconsin.

Paper For Above instruction

The dynamics of wage and benefit negotiations between employers and employees have been profoundly affected by economic pressures, globalization, and shifting industry standards over the past few decades. Companies typically request wage and benefit concessions from workers during periods of financial distress or when facing increased competition, cost pressures, or declining profitability. This desire to reduce labor costs is often driven by the need to maintain operational viability, remain competitive in global markets, or facilitate restructuring efforts. While such measures are sometimes viewed as necessary from a corporate perspective, their ethical implications and long-term impacts on employee morale and trust are complex and multifaceted.

In the case of Harley-Davidson, the decision to implement a seven-year contract with wage freezes and increased healthcare expenses was driven primarily by financial necessity. The company faced a significant loss of $55 million, primarily due to declining motorcycle sales amid economic downturns and changing consumer preferences. To remain afloat, Harley sought to reduce costs significantly, including the possibility of relocating production to lower-cost regions or countries. Workers agreed to these concessions largely because of their limited alternatives: many felt trapped by their age and career circumstances, with some too young to retire and too old to start anew. Their acceptance was also influenced by the hope, albeit verbal, that the factories would remain open in Wisconsin, although no concrete guarantee was provided.

Similarly, at Sub-Zero/Wolf, the threat of relocating jobs to Kentucky compelled unionized workers to accept a substantial pay cut of 20%, followed by a wage and benefit freeze. Such concessions were deemed necessary by management to prevent a complete shift of manufacturing jobs from Wisconsin. Workers’ acceptance was driven by the threat of job loss and the economic necessity to continue earning employment and income. These examples highlight how economic insecurity and the threat of job relocation diminish workers’ bargaining power, making them more likely to accept unfavorable terms.

Over time, workers’ bargaining power has diminished due to various factors. Globalization has increased competitive pressures, encouraging companies to seek cheaper labor markets and outsource production. The decline of labor union influence in many regions has also weakened workers’ ability to resist wage and benefit reductions effectively. Additionally, the shift toward gig and casual work arrangements has contributed to a less secure workforce, with many employees lacking the leverage or institutional support to negotiate favorable terms. Technological advancements and the flexibilization of labor markets have further eroded traditional negotiating power, transforming employment relationships into more transactional interactions.

The future prospects for manufacturing workers are uncertain and vary significantly by region and country. In developed nations like the United States, manufacturing jobs are increasingly under threat from automation, offshoring, and the migration of operations to countries with lower labor costs. As a result, union strength and employee bargaining power are often weaker compared to the past, and wage stagnation or concessions may persist. Conversely, in some emerging economies, manufacturing remains a vital growth sector, with workers often retaining more bargaining leverage due to limited labor protections and developing industrial policies. Therefore, workers’ prospects depend heavily on regional economic policies, labor laws, and the extent of globalization’s influence.

Overall, while companies justify wage and benefit concessions as necessary for survival and competitiveness, these measures pose significant challenges for worker security and morale. Moving forward, policy debates about fair wages, labor protections, and the global distribution of manufacturing jobs will continue to shape employment landscapes worldwide.

References

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