A major US engineering firm engaged X-PM to shut down their transformer plant in India and shift the equipment to one of their other facilities. However, after the start of the mission, the Client requested help in selling the factory if they could not agree on a Voluntary Retirement Scheme with the employees.
Situation
X-PM’s Client had experienced declining sales of transformers and wanted to close a large transformer factory in India. To do this, they needed to settle with the over 600 direct and indirect workers.
The Client was faced with a very difficult situation in terms of local politics and the union. The workers had gone on strike to extract compensation equal to 10 years of salary per worker.
The situation was highly ambiguous and dynamic, with multiple players, multiple strategic options, and different payoffs for each move by each of the players.
Solution
X-PM deployed a dynamic, charismatic, experienced manager to negotiate with unions and local government, deal with an issue relating to industrial contamination, etc. in order to implement the action plan.
X-PM’s Manager explored other options, such as selling the factory rather than shutting it down. Two potential buyers had already been identified, and X-PM’s manager engaged with them.
To maintain maximum bargaining power, X-PM’s manager adopted two parallel sets of activities: closing down the facility and negotiating with a buyer to keep the facility open.
Results
The union rejected a generous VRS package, so X-PM’s manager pushed for the decision to accept the buyer’s offer.
X-PM’s Manager engaged with the concerned government department to convince them that it was in their interest to facilitate the transfer of the lease to the buyer so that the factory would continue to operate and provide employment in the region.
X-PM’s Manager led the negotiations with respect to the sale agreement, relying significantly on the legal expertise of the Client’s in-house legal representative and two separate legal firms hired by the Client.