need to answer questions 1 &2 and share the thoughts on the perspective that is
ID: 426099 • Letter: N
Question
need to answer questions 1 &2 and share the thoughts on the perspective that is posted above.
See "HR Perspective: Labor Agreement Takes lght teaine o tract negotiations at Boeing HR Labor Agreement Takes Flight The threa ists union t of a work stoppage by the machin concessions on wages, seniority, and retire- at Boeing did not stop the company ment benefits. A number of high-profile local from demanding a labor contract that allows it to and state civic leaders weighed in and urged reduce costs and improve productivity Boeing the union members to accept the deal. Af was determining where to produce the new ver ter several additional rounds of proposals and sion of its 777 long-range jet at the time of labor counterproposals, the labor agreement was rat- negotiations with its union workers in Everett, ified in a 51% to 49% vote. The contract will run Washington. Company officia's told workers that for eight years, giving both sides a long-term production of major sections of the new aircraft assurance of certainty. Likewise, the state also 6 ght be assigned to its facility in South Carolina, a rght-to-work state, or possibly at a not-yet-es- tablished facility in the U S. Southwest. Several states were wooing the company with tax incen- tives and other economic rewards to set up op- erations. The Washington State production facility onally been the hub of manufacturing. But high labor costs offered several financial incentives for Boeing to keep the work in Washington. The final contract delivered a critical element to the company, re- placing an expensive defined benefit pension plan with a defined contribution 401(k) plan Despite the ability to withhold labor by striking against an employer, this tactic is rarely used because it is costly to employees as weli as the company. Unions take to the streets only under circumstances that cannot be resolved in any other way. Boeing and the IAM can now work more cooperatively until the next contract in several years,59 Answer the following ques- tions about Boeing's business decision regard- ing the location of its operations e making alternate locations more attractive The company's threats to move production friendly location played against d hit the picket lines. Striking is the union's most potent weapon to convince management that its demands are serious. The 32,000 employ- ees represented by the International Associa tion of Machinists (AMI have had a contentious relationship with Boeing for many years. Labor eace is critical in an industry with lang lead times and significant capital investments. Both to a more labor- the union's threat to reject a contract offer an How much weight do you think companies should put on tax and other incentives to locate their operations in a particular state or city? Is it a good thing for taxpayers? 1. the company and union understand the impor 2. If you were a member of the IAM, how tance of good relations, yet somehow they manage to come to terms only after each side would you feel about the company's threats to move the jobs elsewhere? After settling the contract disputes, what would be your has wielded its power Initially, the union workers rejected the proposed contract, which included deep level of loyalty and commitment to the comparyExplanation / Answer
1. While running a business, the tax component can be a necessary evil. It cuts in to the revenue generated, reduces profitability and impacts the balance sheets. Naturally lower taxation is always welcome by organizations. Taxations and other incentives eventually contribute to the overall growth and sustainability of the company. However, there are usually reasons why a certain state or a region would provide tax breaks for new companies. Such areas usually have a low skilled employee market. So these factors needs to be considered. With that in mind, if there a scenario between location A and location B where both provides same quality of workforce and A provides tax benefits over B, then location A becomes an obvious choice.
Since taxation directly impacts a company’s net profits, it is natural to put a lot of weight on the tax breaks that you can get.
When the question boils down to tax payers it does not really impact the tax paying individuals. The tax benefits provided are usually to large organizations such as Boeing. However, the individual tax payers are still required to abide by the same tax system in the state.
2. Given the details of the case (the union and the management have had such issues in the past), if I was a member of IAM, I would not worry much. I would consider it to be a regular muscle flexing session between the union and the management of the company. This would not impact my loyalty or commitment to the company even after settling the contract disputes.
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