Southern Discomfort

Southern Discomfort

Summary: Jim Malesckowski received a call from his boss, who wanted him to go to Mexico and determine some figures for their manufacturing company. Their present plant is in Oconomo, Wisconsin, where they employ 520 people. Oconomo is a small town of just under 10,000 people and jobs are limited, so the company provides some help to their poor economy. Jim’s boss is thinking about moving the plant into Mexico where he could cut costs dramatically, saving the company millions of dollars each year. The workers of the company are part of a labor union that negotiates wages and duties with the company. The union does not want its workers to earn lower wages or become cross trained to do many different jobs. Jim is stuck between a rock and a hard place because his boss wants him to report the findings in Mexico yet Jim knows if he does then the plant will most likely move into Mexico. The company will save a lot of money in production and labor costs if they move but it will take away 520 full time jobs from the people of Oconomo. Jim needs to figure out what to tell his boss when he meets with his boss the next day.

Assumptions:
It is assumed that this is a very difficult decision for Jim to make. Businesses are faced with this problem all the time. If the business moves to Mexico then surely they will save money and have more money to invest with. It is assumed that Jim doesn’t want to be the bearer of bad news in the town of Oconomo where he would have to tell the workers that they are going to be laid off because the company is moving its plant to Mexico. Both sides of the situation must be heavily thought out as no quick decision can be made here.

Main Concern:
The main concern is for Jim to figure out what he is going to tell his boss. Jim needs to make a decision as to what he will report to his boss on the situation in Mexico.

Vantage Points:
The first vantage point is that Jim will tell his boss about the cheap labor costs in Mexico and in turn the company will move its plant. Jim may not want to do this but his job is on the line in what he reports to his boss. The second vantage point is for Jim to lie to his boss about Mexico and say that it’s not a good idea for the company to move its plant into Mexico. By doing this Jim would be saving the jobs of 520 full time employees in the town of Oconomo. The next option for Jim would be to tell his boss about the opportunity in Mexico but say the timing is not right and offer to move the plant in a couple of years. This would give the employees of the plant in Oconomo enough time to find other jobs in the surrounding areas so they are not just thrown out with nothing.
Diagnosis:
The first option of Jim telling his boss about the cheap costs of Mexico has a lot of positives aspects. If the company moves the plant into Mexico they will no doubt save millions of dollars each year in production and labor costs. The company would then have more money to invest with, possibly in another plant somewhere else, more money to invest in a bank, or more money to pay dividends to stakeholders. After all, the goal of just about every business is to make money in order to pay back its stakeholders. So by moving the plant to Mexico, the company would be achieving its main goal. The problem with moving the plant would be that many people would lose their full time income by getting laid off by the company. Over 520 people would no longer be employed in the town, and many families would have no source of income because the town is small and the jobs are scarce. The plant offers many jobs and opportunity to the town because the plant is the center piece of the town where many of its residence hold jobs. So if the company left for Mexico, the town and its people would be negatively affected by the move.
The next option for Jim to tell his boss is to not move the company to Mexico and stay put in the town of Oconomo. Jim feels bad for the employees of the company if the plant was to move down to Mexico and almost wants to protect them. Jim has to decide is he thinks the move to Mexico is ethically correct. Some think that outsourcing to other countries is wrong and shouldn’t be done but big businesses argue that it’s fine in order to cut costs. But, if the company stays put then they will be spending way more money then necessary on labor costs because the union won’t cut prices. So the business has to argue why spend more money if they can do it for cheaper somewhere else. It just like if you could buy the same car from Japan for cheaper then you could in Detroit you would be crazy not to buy it in Japan. The business has the same mentality because their main goal as a company is to turn as much revenue as possible.
If Jim was to tell his boss that the move was not a good idea at the present time but should be reevaluated at a different time, then this would give the employees enough time to find jobs elsewhere. Jim doesn’t want to lay off his workers but doesn’t want to disappoint his boss at the same time so by telling his boss to wait, he is satisfying both of his parties. Cheap labor will most likely always be available in other countries so the company will not miss that opportunity. By waiting a few years to move the plant into Mexico, the employees will have plenty of time to deal with the coming change.