A large American automotive parts supplier is steadily losing business because of extremely high production costs and legacy costs for its retirees. The averaged unionized hourly worker is making about $27/hour with full health care benefits containing only a 10% copay on everything. Retirees receive very large defined benefit pensions and free health care; there are about 2 ½ retirees for every active worker. Direct labor, benefits, and legacy costs have driven the price of the company’s products to about double that of similar products produced by foreign non-union competitors. Discuss the decision process required in negotiating and retooling defined health and pension benefit policies, as well as the impact of various negotiating scenarios on various stakeholder groups. What would be your strategy for addressing this situation?

These are challenging questions, Michman. Since you're studying for a human resource career, I'm sure you have good ideas for solving these dilemmas.

If you post your answers, we'll be happy to comment on them.