Southern Discomfort: Wisconsin Specialty Products of Lamprey, Inc. Fair wages vs. outsourcing: What is fair or unfair?

The Wisconsin Specialty Products Division of Lamprey Wisconsin may be forced to close its plant located in the U.S. because its wages and benefits for its unionized workers have become too much of a financial drain upon company finances. It is considering re-locating to Mexico to save money on both wages and benefits.

Changing market conditions

Competitors have already edged out Lamprey on price

Now they are edging out Lamprey on quality as well

Lamprey cannot afford to keep the plant as is. It cannot justify raising prices to consumers and must improve its product.

Slide 3: Analysis

Problem

Unionized workers are resistant to lower wages and to cross-training workers (which would mean fewer employees would be needed to do the same required jobs and result in layoffs -- but fewer layoffs than if the plant closed).

Dialogue between union and management has broken down. Union leaders are 'digging in their heels' and refusing to concede any points.

Slide 4: Analysis

Problem 2

The new global economy (including improved transportation, trade agreements, and technology) has made it feasible to outsource highly skilled manufacturing jobs.

Globalization facilitates outsourcing and fewer skills are needed within manufacturing given improvements in technology. From a business standpoint, shifting operations to Mexico may make sense but there are concerns...

When faced with the alternative, union members may be willing to make concessions.
Currently, there is a crisis of authority and management lacks legitimacy in the eyes of the union. Authority of leaders must be accepted rather than imposed: While "managers have authority because of the positions they hold" ultimately "subordinates comply because they believe that managers have a legitimate right to issue orders" (Daft 2013: 246). Currently, the union leadership does not seem to respect management.

Slide 7: Recommendations

Recommendation 2: Re-frame products

The problems with Wisconsin Specialty Products are not necessarily due to high labor costs alone but may also be rooted in problems with the company's inability to differentiate the product from its competitors. It has long sold itself as a 'quality' rather than a 'cheap' product but has been losing this market advantage in recent…