Background Kramer Tool Coating Company (KTC) is a high technology firm that coats cutting tools by bombarding them with ions of a patented substance. Because of the high cost of the ion chambers needed for this process, KTC has yet to make a profit in its 10 years of existence. Forecasts project, however, that KTC will make money next year, and by 10 years from now (barring drastic changes in cutting tool technology) will boast a return after taxes of $30 million. KTC is unionized by an independent union, comprising workers who used to be employed at a nearby company unionized by the United Auto Workers. When that company went bankrupt, KTC hired 20 of its most skilled individuals. These people are now key members in the independent union. Remembering the bankruptcy, these employees have been reluctant to press for too much, too fast, lest history repeat itself. But it is evident now that the company is past its danger point. The new contract will be the first to include any but the bare minimum of benefits. The old package included the legally required benefits (e.g., workers' compensation, unemployment insurance, Social Security) and a relatively low-cost health care package. The Situation The union insists that the next package include a substantial growth in employee benefits. Hard negotiation has determined that the union is willing to forgo substantial wage increase demands in exchange for some gains in the following areas: (1) life insurance, (2) dental insurance, (3) package of short-term (sick days) and long-term disability coverage, and (4) a contributory 401K pension plan. Life insurance and dental insurance coverage as proposed by the union cost approximately the same amount. Similarly, the disability package and the pension package are about equally expensive. You believe the union will settle for one of the two insurance packages and either the pension or disability coverage. Basically, you are indifferent in terms of costs. Questions: 1. Based on The Situation" presented in the case study, write a recommendation to guide the labor lawyer in negotiations. Include in your recommendation how current and long-term corporate goals might influence decisions on the provision of benefits. ( 14 marks)