Michigan pontiac case

THE MICHIGAN CASE

Evaluate the different choices regarding the future of the Pontiac Plant- what are the advantages and disadvantages of each alternative?

1.         How should Michigan Manufacturing Corporation deal with the problem of grim peck product?

The alternatives:

a.         Close the make as soon as possible and transfer its products to another engraft.

Disadvantages:

        Products with growth potential would be transferred to new embeds.

        Loss in investment and loss in management talent.

        Completion cost would reach 3 million

        The Pontiac plant has the responsibility to benefit three divisions of the product line and low volume products, whatll happen with the actual costumers?

        Labor relations at Pontiac were described as good

        Training cost is low, operators can determine on one type of machine.

        Pontiac was a long service employer

        Pontiac has skilled workers with expertise

        Union concerns

Advantages:

        Allen believed that the plant is workable on the shortsighted run

        The plant had not an acceptable level of profitability

        Allen felt that the plant had lost its spirit

        The Pontiac plant could not compete for funds of investment because it did not have a positive return of assets.

         demoralize cost of manufacturing at other modern plants

        Actual specie flow very tight

        The HED`s product line had spread out inexorably for the past two decades.

b.



        Invest in a plant tooling in an attempt to develop a viable operation for at least 5 - 10 yr period.

Disadvantages:

        High cost facilities

        The plant is not viable in the long run, investment is then worthless, because time and money would be lost.

Advantages:

        Would not give competitors any entries in the heavy axle market

        Avoids confronting the situation right away

        Avoid driving customers to seek for alternative sources of product

c.          twist a New Plant

Disadvantages:

        Building a new plant for low volume products...

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