Closing Down the Oconomo Plant

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Established and operated since 1921, Oconomo plant of the Lamprey Inc. has been the workplace of about 520 people. This plant is important to the society because it has created employment opportunities to local residents. However, the plant is in the verge of shut down. Jack Ripon , Chief Executive officer of Lamprey Inc. is concerned about higher cost of operation which has decreased profit for the company. The plan is to close down the Oconomo plant and establish a new plant in Mexico. Jack wants Jim Malesckowski, President of Wisconsin Speciality Products Division of Lamprey Inc. to find out about the operational costs of establishing a new plant in Mexico and submit the report to him. Jim thinks that the action to shut down the Oconomo plant might be wrong as long as there were chances to lower the costs. But he also thinks that Jack is right because all the avenues for decreasing costs at the plant have been closed. Besides money, there are other underlying factors that have led the management to bring some changes in the company. We will look at some of the forces that drive Oconomo plant to anticipate for change,changes that are required to be made, and the reasons why union leaders are reluctant to change. 1.What forces for change are evident at the Oconomo plant?

The greatest force that drives the company to look for change is its high operational cost. The plant has so high operational costs that the company has been incurring losses instead of making profits. The management is anticipating changes so that the company will make profits in the future. In order for a company to run successfully, it should realize some returns from the investment made at the plant. Having invested in the company, shareholders also expect return for their investment. It is important for the company to make enough money for the satisfaction of shareholders and the existence of the company in the market. By any means, Lamprey Inc. should reduce its operational cost to...
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