Rubber and Foams Manufacturer
Imus Institute
College Department
Case Study Number 1
Bautista, Ralph Ephraim I.
Mr. Eulogio T. Catalan
June 29, 2012
Rubatex Corporation manufactures rubber and foams for different types of products. This corporation was bought by American Industrial Partners (AIP). After 3 months of acquisition, the company lost $2 million on $68 million sales.
The plant of Rubatex Corporation is located in Bedford, Virginia. The plant was hot, dirty and crumbling. In short, the plant is not good for the products and employees. The employees also exposed in different chemicals used to create rubber and foams. Only $11.50 an hour is the salary of each worker. Each worker only has 40 minutes break in total. 20 minutes for lunch break and two ten minute breaks each 8-hour shift. They spend their whole day in lifting and loading heavy bags of compounds into mixer.
Rubatex’s plant was built since 1924 and its equipments and machines were purchased in 1940s. So what do you expect with this plant and equipments? Obviously, problems or conflicts cannot be avoided in this kind of company. Other major problem is the Labor-Management Relationship. The management states that they pays their employees well and expects a very high performance from their workers.
If the company’s productivity doesn’t increase very soon, they have no choice but to lay-off or fire 1/3 of its employees. To improve the company’s physical assets, they need another $6 million of investment. But the owner of the company didn’t want to invest on this plant anymore unless their workers ensure their commitment to improve the productivity of the plant.
The company decided to set goals to increase its sales by 30 percent. They require all the workers to work longer than the regular shift to increase output. They also reduce health care benefits for retirees to save costs.
After these changes, workers
College Department
Case Study Number 1
Bautista, Ralph Ephraim I.
Mr. Eulogio T. Catalan
June 29, 2012
Rubatex Corporation manufactures rubber and foams for different types of products. This corporation was bought by American Industrial Partners (AIP). After 3 months of acquisition, the company lost $2 million on $68 million sales.
The plant of Rubatex Corporation is located in Bedford, Virginia. The plant was hot, dirty and crumbling. In short, the plant is not good for the products and employees. The employees also exposed in different chemicals used to create rubber and foams. Only $11.50 an hour is the salary of each worker. Each worker only has 40 minutes break in total. 20 minutes for lunch break and two ten minute breaks each 8-hour shift. They spend their whole day in lifting and loading heavy bags of compounds into mixer.
Rubatex’s plant was built since 1924 and its equipments and machines were purchased in 1940s. So what do you expect with this plant and equipments? Obviously, problems or conflicts cannot be avoided in this kind of company. Other major problem is the Labor-Management Relationship. The management states that they pays their employees well and expects a very high performance from their workers.
If the company’s productivity doesn’t increase very soon, they have no choice but to lay-off or fire 1/3 of its employees. To improve the company’s physical assets, they need another $6 million of investment. But the owner of the company didn’t want to invest on this plant anymore unless their workers ensure their commitment to improve the productivity of the plant.
The company decided to set goals to increase its sales by 30 percent. They require all the workers to work longer than the regular shift to increase output. They also reduce health care benefits for retirees to save costs.
After these changes, workers