Case G*

Factory Closure Negotiations

Role of Cooperation and Prenegotiations

In 2004 management of Vensys Controls Europe, a division of Vensys Controls worldwide began the process of closing their factory in Cluse, France. The company, which produced electronic controls for the white goods market, faced downward price pressure from strong competition within the market and increasing component costs, which combined led to foreseeable bankruptcy on the near horizon. A plant in Slovakia had been secured and the goal was to transfer manufacturing to this location. Numerous other players within the industry had already moved production to Eastern Europe to take advantage of lower labor costs. Vensys management estimated a 74% saving on labor were ...

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