Read the article and answer the questions below…

Screen shot 2013-02-09 at 11.43.32 AM

1. In your own words, briefly summarise what has led to Goodyear’s decision to close the plant in Amiens.

2. Which stakeholders can be identified in this article? What do you think are the objectives of each group you identify?

3. “We are fully aware of the impact of the announcement we are making today and the plan’s heavy consequences for staff, their families and local communities.” Explain this statement by referring to the consequences for the groups mentioned.

4. Goodyear is a multinational company (it has operations around the world). Do you think multinationals – in general – pose a risk to the wellbeing of local economies?


10 thoughts on “Read the article and answer the questions below…

  1. 1. The plant was costing the business losses, reputation, and the ability to compete competitively. So after five years of unsuccessful negotiations with the worker’s representatives, Goodyear, for the good of the entire company, closed the plant in Amiens.

    2. Goodyear, making a profit and retaining competitiveness;
    representatives, earning salaries and representing workers;
    workers, earning salaries;
    socialist government, gaining support of the workers and control of the company;
    environment, surviving and praising the Creator

    3. The consequences to the staff would be loss of jobs and thus salaries; to families, they would be loss of half or all the bread-winning; to the community, they would be a sharp increase in unemployment and probably a decrease in expenditures.

    4. No, because they are governed by the same basic principals as the smaller businesses.

    • A good answer overall, Alison! Just a few comments:

      1. The root cause of the closure seems to be a “a weaker demand for autos” and thus tyres as well.

      2. Also bear in mind workers as well as their families. The environment is not really a stakeholder, although we could consider environmental groups – but these are not dealt with in the article. Another stakeholder group to consider is customers.

      4. Multinationals can be negatively viewed and seen as potentially disadvantageous to economies. See the section in your textbook about possible disadvantages of multinationals. Also check out this link for some further info:

  2. 1) it was decided to close the plant in Amiens because of loss making. the plant did not make enough profit and thus sufferded loss.

    2) Managers- they want high salaries, status and control.
    Owners-they want profit from the capital they invested into the business.
    Workers- they want consistant incomes, job security and satisfying work
    Government- they want employment and increase in national output
    Community- they want jobs and safe products

    3) The staff will be unemployed and will have no work and income
    If some of the workers are the only person who makes an income for their families and they loose their job their whole family will suffer because of this or the family will now have to live on half the saliry that was always avalable.
    The local community will have a higher rate of umemployment and the community will no longer have the goods produced by the company closeing.

    4) No, they will rather help advance the wellbeing of a local economy.

  3. 1) Goodyear tyre plant was facing great los making because demand was constantly declining. This was because of a decreasing demand for autos AND tyres in that area. Goodyear also had to stay competitive in other sectors of industry and this just could not lead them to profit making. Great competition from asian countries also influenced their decision to close the plant.

    2) a. the employees (managers and workers) who’s objective is most likely that the plant should not close down, because their jobs are at stake.
    b. the local community. Their objectives will be that the business still provide the jobs, and the tyres they are producing, but IF the business is causing pollution, some of the community might be glad that the business is closing down because pollution will be reduced.
    c. Government. They would not want the plant to close down because it will increase unemployment in the country, and reduce the countries’ total output.
    d. The consumers (those who set the demand for a product). they would still want the goods that are provided by the plant.
    e. The owners (if the chairman was a owner). They would want the plant to close down because their share of the profit is either nothing of very small as they are the original risk takers of the business.
    f. Question: Could the competing companies also be a stakeholder?

    3) The consequence of the business closing down, will follow in the unemployment of the staff: this will possibly cause a lower living standard for the families of the staff and the local com-
    munity. The local community will also now have less products to choose from.

    4) Yes, because they will not be so heavily effected by government action in a specific country, because they have other companies to fall back on in other countries. Thus they will might not be so heavily concerned about laws made against them by that country and this could mean employees from this company have a greater risk to lose their jobs.

  4. 1. The plant was operating at a loss for a long time because there was less demand for cars and therefore tyres. Closing the plant was a way of cutting those losses. Goodyear also wanted to remain competitive in the sector.

    2. Workers: job security ,good salary , safe work.
    Worker’s families: high standard of living.
    Communities:safe,quality products, choice of products, low pollution.
    Owners:profit, market share, good reputation.
    Government:high output, low unemployment.

    3. The communities will have less product choice and will suffer more unemployment. The workers will lose their jobs and therefore their incomes, the families of the workers will have a lower standard of living. If the laid off worker was the only working family member, the family will lose their entire income.

    4. Yes, they are not as dependent on the community for survival as local businesses, and can easily close a branch of their business because they have many other branches in other countries to fall back on.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s