You are the CEO of Cog Company, a mid-sized corporation that is publicly traded. Cog Co. is one of a very few manufactures of cogs. Cogs are a major component used in the engines of all cars, trucks, and many other pieces of heavy equipment. Cog Co. in recent years has only been marginally profitable, and the company has not paid dividends to shareholders in ten years. Low profits are attributed to rising costs in parts, labor, employee benefits, and governmental regulation (OSHA and EPA). The net profits of the company in the last ten years have been re-invested in capital expenditures. Cog Co. is located in the State of Union. Cog Co. is a unionized employer, and the State of Union is not a "right to work" state. This year the union has demanded a huge increase in employee pay, medical insurance, dental insurance, and paid time off. These demands, if met, would bankrupt Cog Co. The company has tried for four months to bargain with the union to no avail. Company representatives have made it clear to the union that the company is only marginally profitable. However, given the recent corporate scandals such as Enron, the union is naturally skeptical, and it believes that the executives are hiding profits using unethical accounting practices in order to avoid meeting its demands. The union's suspicions are not true, but the company's information is unverifiable according to the union. Most of Cog Co.'s competitors have already left the United States, and are now enjoying huge profits by employing child labor, and providing less than safe working environments in third-world countries around the globe. Cog Co. has the option of closing the plant in Union and moving to a third world country, or a Newly Industrialized Country (NIC) such as Mexico. Mexico is particularly attractive given the fact that the United States is a partner in the North American Free Trade Agreement. As CEO, you must decide what to do. Should Cog Co. continue to try to work with the union? If so, how much longer? Should Cog Co. move? If it does move, what conditions should it abide by in employing people in the lesser developed country?

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answer Cog Co will have to make a loss and choose to close in order to make a margi... View the full answer