The management of The Hershey Company has asked union workers in two of its highest cost Pennsylvania plants to accept higher health insurance premiums and take a wage cut. The workers’ portion of the insurance cost would double from 6% of the premium to 12%. In addition, workers hired after January 2000 would have their hourly wages cut by $4, which would be partially off set by a 2% annual raise.
Management says that the plants need to be more cost competitive. Management has indicated that if the workers accept the proposal, the company would invest $30 million to modernize the plants and move future projects to the plants. Management, however, has refused to guarantee more work at the plants if the workers approve the proposal. If the workers reject the proposal, management implies that it would move future projects to other plants and that layoffs might be forthcoming. Do you consider management’s actions ethical?
Source: Susan Govzdas, \Hershey to Cut Jobs or Wages," Central Penn Business Journal, September 24, 2004.