Collective Bargaining: The General Motors-United Auto Workers Deal
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Case Details:
Case Code : HROB109
Case Length : 19 Pages
Period : 2005-2008
Pub Date : 2008
Teaching Note :Not Available
Organization : General Motors
Industry : Automotive
Countries : USA
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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A 'Monumental Outcome of Collective Bargaining' Contd...
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The agreement with the UAW put an end to the problems GM had
been facing with regard to the rising healthcare costs for its employees.
GM had been the market leader in the US till 1980, with a market share of 46
percent. However, with the entry of foreign car manufacturers like Honda Motor
Company8 (Honda) and Toyota Motor Corporation9 (Toyota), GM began to face intense
competition and it lost market share to these new players. Analysts felt that GM
had lost its market leadership position because of its sluggishness in designing
new models when compared to its Japanese competitors who kept coming out with
new designs.
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In addition to this, GM's fortunes were severely affected
with under-funded pension liabilities, rising employee and retiree healthcare
costs, and a decreasing market share in the US automobile market.
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The company's US market share fell to less than 25
percent in 2006. Also, for the third quarter that ended September 30,
2007, the company reported losses of US$ 39 billion (Refer to Exhibit I
for GM's financial performance).
These problems had GM teetering on the
brink of bankruptcy in 2005.
The company put a turnaround plan in place in 2005. The plan focused on
reducing costs among other things. The company worked with the UAW to
decrease its healthcare costs and also to facilitate huge job cuts... |
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