CASE STUDY 2 Read the case below/ scenario and answer the questions that follow: Paul Cilliers, the General Manager, sat at his desk staring at the recent financial statements. The information was shocking! Savimbi Textiles (Pty) Ltd was literally losing money daily. Since the South African Reserve Bank has increased the rates in the last couple of months, South Africans have cut back on buying clothing. The company barely managed to survive the last recession, and now tough times are here again. Sales have decreased by 25% during the last quarter - at this rate the company will have to introduce short time. "Hey, why are you looking so worried?", asked James Mohammed, the Production Manager, while taking a seat opposite Paul. "Have you seen these sales figures? It is terrible!", Paul replied. "Ah! Come on now, you and I have been through tough times before-just cut our greatest expense and things will become normal again. You should just leave the selection process to me. I have a few troublemakers live been dying to get rid of in any case. Actually, this situation is a blessing in disguise!". laughed James. Paul just stared at James and shook his head. "You are amazing! Some of our employees have given this company the best years of their lives and you are suggesting that we should just stab them in the back." James reacted by stating: "Okay. I give in, sensitivity is not one of my strengths, but face reality - what is more important, keeping on a workforce that we won't be able to afford in a couple of months in any case, or getting rid of them now?" -But, what about the unions? They will never support retrenching employees. They will argue that 25% drop in sales doesnt justify such drastic action on our part". Paul responded. "For a general manager, you can sometimes really act stupid - don't tell them it is 25% - inflate the figures. You and I know it is not going to get any better - at least not for the next 18 months. Believe me, you are doing them a favour! Besides last year I did Sipho Ngema, the regional union officer a big favour. I employed almost his whole family - four sons and two uncles - he owes us and now it is payback time!?" James replied. Question 1 Is there a need for Savimbi Textiles' management team to consult with the union? Explain. Question 2 Identify and explain three (3) alternatives that the employees can propose for the company to consider before retrenching the employees. Question 3 Assist the company in advising them on four (4) considerations that they should keep in mind when selecting employees that will be retrenched