The Case of the Plant Relocation

THE CASE OF THE PLANT RELOCATION

INTRO TO BUSINESS AND TECHNOLOGY

January 5, 2006

During this day and age when people want it now and want it fast, one can only envision how to make the fast honest buck. Given the situation with shareholders demanding a higher return on their investment, the only feasible solution is to relocate certain facilities to give the company a chance to survive. With unions wanting more money and United States regulations becoming stricter; if there are other alternatives to reduce cost and increase profit companies must make a difficult decision to move operations to another state and possibly another country.

With Electrocorp needing to alleviate rising costs in labor and production, a strategic and well-developed relocation is key to minimize bad publicity and maximize opportunity for a large company that provides on-board electronics of vehicles. The first step in a major reconstruction of production must involve a key step in social responsibility. Bad publicity can really damage a company's image and clients can be lost in the process. Moving operations to Mexico would be out of the question because it will raise suspicion when it is known that people will work for less money and more birth defects happen because there is less strict regulations for business operations in that country.

Since there are a few plants located in the United States, we would close down the smaller facilities and try to consolidate operations into a larger facility. We can then offer a relocation package for employees willing to relocate to another part of the country where a plant will remain open in the United States. This exhibits that Electrocorp shows that they know that a major relocation is difficult and want to accommodate employees as much as they can while considering costs of operation.

This is where relocation of operations to the Philippines would be beneficial. The most costly of operations that have very strict United States regulations should be moved to the Philippines to benefit maximally from the low labor costs and less strict production regulations. Information of what is being relocated should be public information to display that Electrocorp is not trying to hide anything from shareholders and