Labor Relations: Striking a Balance 4th Edition by John Budd

Exercise 8

Suppose you are the HR manager at a small unionized manufacturer of auto parts located in a small town in the South. The production work is repetitive and routine, and there are no particular skills or educational requirements for the production employees. Nearly all the parts produced are sold to one major automaker. This automaker demands a 10 percent price cut. To reduce labor costs, do you use an escape, forcing, or fostering strategy with the union? Why? Now suppose instead that you are the HR manager for a local school district where the teachers are unionized. To balance the state budget, the school district's budget is cut by 10 percent. Do you take the same approach as in the auto parts scenario? Why or why not?